The role of earnings management, family firms in the value relevance of earnings and book value of equity, before and after IFRS adoption

This study examines the impact of earnings management and family firms on the value relevance of earnings and the book value of equity before and after IFRS adoption. The samples were manufacturing companies listed on the Indonesia Stock Exchange (IDX). Based on panel data analysis, the results show that before IFRS adoption, when family firms engage in earnings management, there is no reduction of the value relevance of earnings and there is no increase in the value relevance of book value. After IFRS adoption, when family firms engage in earnings management, there is a reduction of the value relevance of earnings but there is no increase in the value relevance of book value. This result indicates that the entrenchment effect dominates family firms in Indonesia after IFRS adoption