Accounting and Profit Management Records in Banking Companies During the COVID-19 Pandemic


A company’s management team is responsible for measuring its financial performance and assessing the operational needs for utilizing the company resources based on its ability to generate profits. The ongoing COVID-19 pandemic made it imperative for the banking sector to implement effective profit management strategies so that their financial position remains stable, considering that there are several government policies regarding the other types of funds. This study intended to examine the accounting and profit management practices applied by the banking sector companies in Indonesia during the COVID-19 pandemic. Using a qualitative descriptive method, the researchers extracted data from the online Indonesia Stock Exchange (IDX). A sample of 13 banking companies was selected. Data analysis was done using narrative study techniques based on theoretical assumptions by analyzing existing documents. The majority of banks studied in this research applied accrual-based accounting records because of their relationship to income recognition. Profit management was implemented to maintain financial performance and tax savings.

Keywords: accounting record-keeping, profit management

[1] Supriyono RA. Akuntansi keperilakuan. Yogyakarta: Gajah Mada; 2018.

[2] Hamdani H. Good corporate governance: Tinjauan etika dalam praktik bisnis. Jakarta: Mitra Wacana Media; 2016.

[3] Jensen MCW. Meckling. Theory of the firm: Managerial behavior, agency cost and ownership structure. Journal of Finance Economic. 1976;3:305-360.

[4] Scott WR. Financial accounting theory. 7th ed. United States: Canada Cataloguing; 2015.

[5] Ittonen K. A theoretical examination of the role of auditing and the relevence of audit reports. Proceedings of the University of Vaasa. Vassa University. 2010.

[6] Healy, Paul M, Wahlen JM. A review of the earnings management literature and its implications for standard setting. Accounting Horizons. 1999;13:365-383.

[7] Scott W. Financial accounting theory. 7th ed. Toronto: Prentice Hall; 2000.

[8] Scott W. Financial accounting theory. 3rd ed. Toronto: Prentice Hall; 2003.

[9] Irham F. Pengantar manajemen keuangan. Bandung: Alfabeta; 2018.

[10] Leaven L, Ratnovski L, Tong H. Bank size and systemic risk. Journal of Banking & Finance.International Monetery Fund. May 2014. 4-23.

[11] Arnold PJ. Global financial crisis: The challenge to accounting research. Accounting Organizations and Society. 2009;34(6):803-809.

[12] Ozili PK, Arun TG. Income smoothing among European systemic and non-systemic banks. The British Accounting Review. 2018;50(5):539-558.

[13] Moleong LJ. Metode penelitian kualitatif. Bandung: Remaja Rosdakarya; 2009.

[14] Laux C, Leuz C. Did fair value accounting contribute to the financial crisis? Journal of Economic Perspectives. 2010;24(1):93-118.

[15] Veron N. Fair value accounting is the wrong scapegoat for this crisis. 2008;5(2):63- 69.

[16] Hope OK, Wang J. Management deception, big bath accounting and information asymmetry: Evidence from linguistic analysis. Accounting Organizations and Society. 2018;70:33-51.

[17] Ozili PK. Bank earnings smoothing, audit quality in Africa. Review of Accounting and Finance. Review of Accounting and Finance. 16(2) 2017.