THE EFFECT OF ACCOUNTING CONSERVATISM IN THE RELATIONudBETWEEN CURRENT EARNINGS AND FUTURE CASH FLOWS ONudINDONESIAN LISTED MANUFACTURING COMPANIES

摘要

This study aims to test the effect of accounting conservatism to current udearnings in predict future cash flows. Accounting conservatism is measured by udnonoperating accruals, this model is develop by Givoly and Hayn (2000). Samples udin this study are manufacturing companies listed in Indonesia Stock Exchange udfrom 2000 until 2010 which meets the sample criteria. udThis study used t-test approach to test the hypothesis. The result of this udresearch shows that null hypothesis is accepted and supported. This finding means udaccounting conservatism affects the relation between current earnings and future udcash flows. The result of t-test shows that accounting conservatism positively udaffects the relation between current earnings and future cash flows. It is said when udthe numbers of accounting conservatism increase, the relation between current udearnings and future cash flows will increase as well. This could happen because udseveral positive impact brought by the application of accounting conservatim.