Enterprise Resource Planning Implementation and Accounting Information Quality

Abstract

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. The study finds
that the implementation of ERP system increase the absolute
discretionary accrual, thus the faithful representation of the
accounting information decreases. 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.