Does Accounting Quality Still Matter for Stock Price Crash Risk? Evidence from a High-Uncertainty Industry
DOI:
https://doi.org/10.55606/ijemr.v5i2.780Keywords:
Accounting Quality, Bad News Hoarding, Information Asymmetry, Panel Data Regression, Stock Price CrashAbstract
This study examines the influence of accounting quality on stock price crash risk and investigates whether this relationship is conditioned by information asymmetry. Using a quantitative approach, this study utilizes secondary data derived from annual reports and stock price history of coal mining firms listed on the Indonesia Stock Exchange over the 2021–2024 period. Stock price crash risk is measured using negative conditional skewness (NCSKEW), accounting quality is proxied by discretionary accruals based on the Kothari model, and information asymmetry is captured through bid–ask spread. Panel data regression and moderated regression analysis (MRA) are applied to test the proposed relationships. The results indicate that accounting quality exhibits a negative but statistically insignificant association with stock price crash risk in the baseline specification. The moderated regression results further reveal a marginal moderating effect of information asymmetry, suggesting that the influence of accounting quality is conditional upon the firm’s informational environment. These findings highlight the context-dependent nature of accounting quality in explaining crash risk within high-uncertainty industries. This study contributes to the crash risk literature by providing evidence that accounting quality does not operate as a uniformly robust determinant of crash risk, while emphasizing the importance of broader informational conditions.
References
Adityaningsih, A., & Hidayat, I. (2024). Pengaruh ukuran perusahaan, umur perusahaan, leverage, dan profitabilitas terhadap manajemen laba: Studi pada perusahaan pertambangan yang terdaftar di Bursa Efek Indonesia periode 2018–2020. Jurnal Kajian Ekonomi & Bisnis Islam, 5(2), 899–917. https://doi.org/10.47467/elmal.v5i2.5527
Alverina, J. C., Rudiawarni, F. A., & Harindahyani, S. (2025). Earnings quality and stock crash risk: A study in Indonesia. Folia Oeconomica Stetinensia, 25(2), 1–23. https://doi.org/10.2478/foli-2025-0020
Andien, L. A. G., & Husaini. (2022). The influence of accounting quality on the risk of falling stock prices. International Journal of Social Science and Business, 6(1). https://doi.org/10.23887/ijssb.v6i1
Ayagi, S. R., & Salisu, M. (2023). Financial reporting quality and information asymmetry: A review of empirical literature. FUDMA Journal of Accounting and Finance Research (FUJAFR), 1(3), 19–29. https://doi.org/10.33003/fujafr-2023.v1i3.51.19-29
Callen, J. L., & Fang, X. (2015). Short interest and stock price crash risk. Journal of Banking & Finance, 60, 181–194. https://doi.org/10.1016/j.jbankfin.2015.08.009
Cao, T., Nguyen, H., Nguyen, K., & Nguyen, L. (2023). Information asymmetry on the link between corporate social responsibility and stock price crash risk. Cogent Economics & Finance, 11(2). https://doi.org/10.1080/23322039.2023.2230727
Chen, C., Kim, J. B., & Yao, L. (2017). Earnings smoothing: Does it exacerbate or constrain stock price crash risk? Journal of Corporate Finance, 42, 36–54. https://doi.org/10.1016/j.jcorpfin.2016.11.004
Chen, J., Hong, H., & Stein, J. C. (2001). Forecasting crashes: Trading volume, past returns, and conditional skewness in stock prices. Journal of Financial Economics, 61(3), 345–381. https://doi.org/10.1016/S0304-405X(01)00066-6
Fatimah, S. Z., & Sartika, D. (2024). Analisis kinerja keuangan menggunakan metode economic value added dan market value added. Jurnal Ilmiah Riset Akuntansi, 11(1). https://doi.org/10.53494/jira.v11i1.868
Gregoriou, A., Ioannidis, C., & Skerratt, L. (2005). Information asymmetry and the bid–ask spread: Evidence from the UK. Journal of Business Finance & Accounting, 32(9–10), 1801–1824. https://doi.org/10.1111/j.0306-686X.2005.00648.x
Habib, A., & Hasan, M. M. (2017). Business strategy, overvalued equities, and stock price crash risk. Research in International Business and Finance, 39, 389–405. https://doi.org/10.1016/j.ribaf.2016.09.011
Haider, M. J., Awan, T., & Khan, W. (2022). The effect of earnings management on stock price crash risk: A comparative study of developing and developed Asian economies. International Research Journal of Management and Social Sciences, 3(2), 38–54. https://doi.org/10.53575/irjmss.v3.2.4(22)38-54
Hutton, A. P., Marcus, A. J., & Tehranian, H. (2009). Opaque financial reports, R², and crash risk. Journal of Financial Economics, 94(1), 67–86. https://doi.org/10.1016/j.jfineco.2008.10.003
Jin, L., & Myers, S. C. (2006). R² around the world: New theory and new tests. Journal of Financial Economics, 79(2), 257–292. https://doi.org/10.1016/j.jfineco.2004.11.003
Kim, J. B., & Zhang, L. (2016). Accounting conservatism and stock price crash risk: Firm-level evidence. Contemporary Accounting Research, 33(1), 412–441. https://doi.org/10.1111/1911-3846.12112
Kothari, S. P., Leone, A. J., & Wasley, C. E. (2005). Performance-matched discretionary accrual measures. Journal of Accounting and Economics, 39(1), 163–197. https://doi.org/10.1016/j.jacceco.2004.11.002
Neifar, S., & Utz, S. (2019). The effect of earnings management and tax aggressiveness on shareholder wealth and stock price crash risk of German companies. Journal of Applied Accounting Research, 20(1), 94–119. https://doi.org/10.1108/JAAR-11-2016-0106
Park, S. Y., & Park, H. Y. (2020). Do statutory internal auditors influence stock price crash risk? Firm-level evidence from Korea. Managerial Auditing Journal, 35(2), 207–237. https://doi.org/10.1108/MAJ-09-2018-1992
Ross, S. A. (1977). The determination of financial structure: The incentive-signalling approach. The Bell Journal of Economics, 8(1), 23–40. https://doi.org/10.2307/3003485
Salehi, M., Zimon, G., Hashim, H. A., Jędrzejczak, R., & Sadowski, A. (2022). Accounting quality and audit attributes on stock price crashes in an emerging market. Risks, 10(10), Article 195. https://doi.org/10.3390/risks10100195
Shin, Y. Z., & Jeon, K. (2021). Transparency of accruals quality and stock crash risk. Academy of Accounting and Financial Studies Journal, 25(6), 1–12.
Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355–374. https://doi.org/10.2307/1882010
Suharti, E., & Saftiana, I. I. (2021). Reaksi pasar dan implikasinya terhadap harga saham. Journal MONEX, 10(1). https://doi.org/10.30591/monex.v10i1.2346
Wang, B., Ho, K. C., Liu, X., & Gu, Y. (2022). Industry cash flow volatility and stock price crash risk. Managerial and Decision Economics, 43(2), 356–371. https://doi.org/10.1002/mde.3387
Wang, Q., Zhai, A., Pang, Q., Wang, H., & Chu, X. (2023). Information disclosure quality, earnings management and stock price crash risk: Evidence from China. In Advances in Economics, Business and Management Research (pp. 622–633). https://doi.org/10.2991/978-94-6463-054-1_68
Xiao, D. (2023). A literature review of stock price crash risk: Evidence from its influencing factors. SHS Web of Conferences, 169, 01072. https://doi.org/10.1051/shsconf/202316901072
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 International Journal of Economics and Management Research
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
