Impact of ifrs 9 applications and earnings management; The new expected loss models

Resumen

Various criticisms of International Accounting Standard 39 have demanded that the IASB develop IFRS 9, which is considered better at recognizing credit losses, by changing the incurred loan loss model to expected credit loss so that credit risk can be calculated at the outset. This research investigates the impact of implementing IFRS 9 on earnings management using financial data of banks listed on the Indonesian stock exchange from 2017 to 2022. Regression analysis is used to assess earnings management using LLP, compare IFRS 9 adoption and assess the role of Big4 auditors and gender diversity. The research results describe that management carries out accrual earnings management using LLP, especially income smoothing. The adoption of IFRS 9 has been proven to improve earnings management because IFRS 9 provides management discretion in recognizing expected credit losses. Furthermore, Big4 audit companies can reduce the potential for earnings management, as with gender diversity, because female directors have higher ethical standards.