Determinant Factors Affecting the Accounting Method Choices and Reported Profits of Big Industrial Companies in Indonesia

This study aims to find out the determinant factors affecting the choice of accounting methods and the reported profit of big industrial companies in Indonesia. The results showed: (1) Total assets of big industrial companies, DER and bonus managers simultaneously had a significant influence on the choice of Accounting Methods which increase profit of the companies. This was supported by Nagel R Square of 0.558 or it could be interpreted that the model could give an effect to change variations of the choice of accounting methods by 58.80%. (2) The debt of big industrial companies which is represented by debt to equity ratio has a significant effect on the choice of Accounting Methods. It means that the greater the company's debt, the greater the tendency of the company to select the accounting methods that increase reporting of company’s profit. (3) Big industrial companies that have a bonus managers have significant effect on the choice of the Accounting Method because the Wald test value is 59,356> 2 or p-value 0,00 <alpha 0,05. This means that the greater the bonus manager of the company, the greater the tendency of the company to select accounting methods that increase reported profit. (4) Sales volume, Debt to Equity Ratio, and Bonus managers simultaneously have significant effect on the reporting of company’s profit of big industrial companies in Indonesia. This was stated by Fa which was greater than Ftable or 377.82 > 1.96 at ( = 0.05; k-1; Nk) or P value 0,000 <0.05 and supported by Adjusted R Square of 0.641 or 64.10% or it can be interpreted that this model can influence the change variations of reported profit of companies 64.10%. (5) Companies with a greater sales volume have a significant effect on reporting of company’s profit. This was indicated by ta > t-table at (= 0.05; N-k) or 33,642> 1.96 (= 0.05; N-k) or with a significance level of P value 0,000 <0.05. This means that the greater the company's sales volume, the greater the company's profit will be.

there are several accounting methods offered, including; inventory method consisting of 3 alternative choices of accounting method, depreciation method consisting of 8 choices of accounting method, and capitalization method consisting of 3 alternative choices of accounting method.
Indonesia Stock Exchange (IDX) has grown rapidly in the past ten years, as seen from the number of companies that go public, or companies listed on the IDX to sell their shares. In 1987, it was only 24 listed companies sold their shares, and by the end of 2018, the company that had registered was 633 companies and parts of them are industrial companies.
From the above research background, it appears that the principal study in this research is financial accounting using an approach of positive accounting research in which it is also based on the agency theory. accounting methods. Other accounting methods are not mentioned above are classified as specific accounting methods according to the business type.
In line with the understanding of the accounting method, it is the procedures for carrying out accounting principles. Choices of using accounting methods are common things to be done, it is meaning that these actions are common as long as the choices are made in accordance with applicable financial accounting standards (SAK).
The numbers in a company's financial statements can be influenced by: economic factors, spending decisions, industry factors, and decision making on the choice of accounting methods used. That Foster's opinion showed that the use of accounting methods is one factor that also determines the numbers in the company's financial statements.

2.2.1.
Inventory Accounting Method The term of Inventory is goods held for sale in the normal condition of a company. In the case of industrial companies, the inventory also includes goods that are in the process of production or that will be included in the production process.
From the definition of inventory above, it can be concluded that inventory is goods intended for sale in the normal condition of a company operation, and what is also included in inventory are raw materials that will be used for production, raw materials that are in the process of production, and raw materials that have been finished being produced which is ready for sale.

Capitalization Accounting Method
The decision whether an expenditure is to be capitalized or to become expensed requires considerations. If an expenditure will provide benefits for the coming period then the expenditure is must be capitalized or used as an asset. If an expenditure only provides benefits in the current period, then the expenditure will be an expense in that period.

Decision Making
Making a choice between two or more alternatives is a decision. before a decision is taken by an individual or by a manager in the company, of course, there is a process, and the process is a decision-making process.

Company's Total Asset and Sale Volume
Total assets, is the total assets owned by the company at a certain time. Sales volume, is the volume of sales of a company in a certain period, for example. The fact that the big companies prefer to select alternative accounting methods that can minimize their profit. Conversely, small companies are often interested in selecting accounting methods that provide greater or higher their profit.

Capital Structure
The capital structure used in this study is Debt to Equity Ratio (DER) which is the relationship between long-term debt and it owner's capital, like this formula: DER = ratio of Long-term Debt to Owner's Capital The behaviour of the company's management relating to the choice of accounting methods is also influenced by the company's capital structure, this is due to the limitations in the credit agreement between the companies and its bankers or creditors.
2) The company's total assets, company's sales volume, company's capital structure, and the manager's bonus (partially) influence significantly on the choice of the company's accounting methods. 3) To analyze the effect of the company's total assets, company's sales volume, the company's capital structure, and the manager's bonus (simultaneously) influence significantly on reported earning (profit) of the companies. 4) To analyze the effect of the company's total assets, company's sales volume, the company's capital structure, and the manager's bonus (partially) influence significantly on reported earning (profit) of the companies.

III. RESEARCH METHOD 3.1. Research Object
The object of this research is industrial companies listed on the Indonesia Stock Exchange (IDX) for the 2014 to 2018 period. The number of industrial companies registered or that have gone public on the IDX is 127 industrial companies or with pooling 5 years periode of the research there will be 635 companies.

Research Method
In this study, the research method used is the survey method, which is collecting data (information) from several companies included in the research object. Data collection is carried out using Questionnaire (see Appendix-2). While, the data used are primary and secondary data, that is, both directly taken from company as the object of research and data from other relevant institutions.

Population and Sample
The population of this study is industry companies listed on the Public List of the Indonesia Stock Exchange (IDX) until the end of 2018 in which there are 164 industrial companies. The population of this study took company data 5 years in a row which id from 2014 -2018. While the sample of this study used a purposive sampling method (meaning; the samples selected according to criteria established and needed for the purpose of this study). From the 164 industrial companies, it was selected to be samples 127 industrial companies or with pooling 5 years periode of the research there will be 635 companies.

Operationalization of Variables
The independent variables discussed in the study are limited to four main variables: total asset variable (X1), sales volume variable (X2), Debt to Equity ratio or DER variable (X3), and bonus variable (X4).
The dependent variable of this study consists of two main variables, namely the accounting method variable (Y1), and the other dependent variable is corporate earnings reporting (Y2) in which it is earnings reporting after tax (EAT). Further explanation regarding each variable is as follows: (1) Company Total Asset (X1) and Sales Volume (X2) The scale of the company is measured by measuring tools as follows:  Total assets (in rupiah) as of December 31, 2014 to December 31, 2018. Symbolized with X1  Sales volume (in rupiah) from 2014 to 2018. Symbolized with X2 (2) Capital Structure Variable or Leverage. (X3) The capital structure variable in this study is the ratio of long-term debt to equity or the ratio of long-term debt to equity.it is also known as Debt to Equity Ratio (DER).

(3) Manager Bonus Variable (X4)
The manager bonus is determined through a contract between the owner and managers and calculated based on earnings (profits) obtained by the company.
In this study, the intended bonus is an agreement to get a bonus at the end of the year to Top Manager/President Director/Principal Director which is a reward for his success in achieving certain targets..

(4) Accounting Methods Variable (Y1)
Accounting methods are procedures is used for implementing accounting principles to prepare financial statement. The writer realizes that the current accounting methods in Indonesia are numerous. There are accounting methods that can be generally applied to all companies, and there are also accounting methods that can only be applied to certain types of companies.

(6) Company's Earning Reporting Variable (Y2).
The intended profit reporting is a substitute term for the Profit that has been reported in the Company's Financial Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.10, No.20, 2019 Statements. Corporate earnings reporting variable (Y2), which is the reporting of earnings after tax or Earning After Taxes (EAT) or Profit after Taxes.

Data Analysis Method
In this study, quantitative analysis methods are used. Both descriptively and inferentially. Descriptive analysis is done by making a direct tabulation of the data of the variables to be analyzed, then comparing the percentage values and the average. Furthermore, inferential analysis to see the effect of independent variables on the accounting method used Multiple Logistic Regression Analysis because of its conformity with the measurement scale of the independent variables and the measurement scale of the accounting method. The choice of multiple logistic regression or logit model is considered suitable because the dependent variable of this study is nominal or dichotomic. In addition, multiple logistic regression is quite widely used by researchers in the choice of previous accounting methods.
Specifically, to see the effect of independent variables on company earnings reporting, multiple regression analysis is used because the scale of measurement of independent variables and the dependent variable (earnings reporting) is ratio. Thus, for this study, the regression model can be formulated as follows: 1. To determine the effect of the manager's bonus (X4), total assets (X2), scale -sales volume (X3), capital structure of the company (X3) to The accounting method (Y1) and to reported profit (Y2), the model is as follows: a. Logistics transformation: Logit P (Y1i) ) = o + 1 X1 + 2 X2 + 3 X3 + 4 X4 + i b. The logistic regression model: To find out the influence of manager bonus plan variables, company scale, and company capital structure (individually) on the accounting method, the model is as follows:

Analysis on the Effect of Assets, DER and Bonus of Manager toward Accounting Methods
Testing the influence of independent variables on the accounting method for 5 years data from 2014 to 2018 used Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.10, No.20, 2019 Multiple Logistic Regression Analysis. In initial step, the autocorrelation test will be performed using the Durbin Watson-test, collinearity testing using the coefficient of determination R2, and heteroscedasticity testing using the co-variance matrix.
Based on the test results of the 2014 to 2018 period data, it can be stated that there is no significant autocorrelation, because the Durbin Watson test value is close to 2 (see Appendix-20) namely; D-W = 2,112. It is also known that there is no collinearity of the relationship between the independent variable and the dependent variable, because the adjusted R2 value is 0.641 which means that it is quite high and which shows that many independent variables individually have an influence on the dependent variable. Noting the results of the tests above, the data analysis can be continued. a) The first hypothesis testing is to determine the effect of independent variables on the accounting method (Y1).
From the calculation results, the estimation of the Multiple Logistic Regression equation is obtained (see Appendix-4) as follows: Accounting Method (Y1) = 0.670 + 0.000 X1 + 0.715 X2 + 3.967 X4 The results of calculating of the logistical effects of the independent variables individually on the choice of the Accounting Method P (Y1) can be seen in the following 5-1:  Vol.10, No.20, 2019 98 This means that the greater the bonus manager of the company will be more likely to select accounting methods that increase company earnings reporting.  Companies with a greater sales volume have a significant effect on corporate earnings reporting (Profit). This is indicated by tcount > ttable at ( = 0.05; N-k) or 33,642> 1.96 ( = 0.05; N-k) or with a significance level of P value 0,000 <0.05. This means that the greater the company's sales volume will cause the company's earnings to increase as well.The results of the above studies are consistent and in accordance with the size hypothesis (Watts and Zimmerman: 1986), with the results of research Cahan (1988), Trombley (1989), and Pourjalali (1992.Contrary to the results of research by Bathke, Lorek, and Willinger (1989), and Ali and Kumar (1994).,  Companies with greater debt or corporate DER do not have an influence on company earnings reporting. 

Analysis on the Effect of Sales, DER, and Bonus of Manager toward Company Earning
Companies with more manager bonus plans do not have a significant effect on the earnings reporting of big industrial companies listed on the Indonesia Stock Exchange.

V. CONCLUSION AND SUGGESTION
Companies with a greater sales volume have a significant influence on corporate earnings reporting (Profit). This is indicated by ta > ttable at ( = 0.05; N-k) or 33,642> 1.96 ( = 0.05; N-k) or with a significance level of P value 0,000 <0.05. This means that the greater the company's sales volume will cause the company's profits to increase as well. (7) Debt to Equity Ratio does not have a significant effect on earnings or corporate earnings reporting. (8) Big industrial companies that have a bonus plan for their managers do not have a significant effect on earnings or company earnings reporting.

Suggestion
(1) Factors that influence the choice of the accounting method are sales volume, total debt, and manager's bonus. Its meant that; part of hypothesis of Watt and Zimmerman is still valid untill today.
(2) Understanding the factors influencing the choice of accounting methods is carried out by having to pay attention to whether there is a change (up or down) in the value or unit of measure of the variable and pay attention to the causal relationship, namely whether a positive or negative relationship to the choice of accounting methods which raises company earning reporting.