DOI: 10.5176/2251-1997_AF13.25
Authors: Y Anni Aryani, Krismiaji
Abstract:
Recently, enterprise resource planning (ERP) system has become a main choice for the majority of publicly listed companies and has radically changed the way accounting
information is processed, prepared, audited, and disseminated. This study investigates the effect of ERP system implementation on accounting information quality of firms listed in Indonesian Stock Exchange. The accounting information quality proxies are relevance and faithful representation. Relevance is measured with time lag between fiscal year-end and earnings announcements date, whereas faithful representation is measured with absolute discretionary accrual. Sample in this study is companies listed in Indonesian Stock Exchange which implemented ERP system. The hypotheses are tested with regression analysis method using panel data ranges from three years before and three years after the firm implemented ERP system. The study finds that the implementation of ERP system increase the absolute discretionary accrual, thus the faithful representation of the accounting information decreases. Moreover, this study finds positive relationship between the number of ERP module being implemented and the level of faithful representation. With respect to relevance, firms with incentive to increase the timeliness of earning release date experience a decrease in reporting lag after implementing ERP system.
Keywords: ERP system; discretionary accruals; implementation; relevance; faithful representation
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