The Impacts of Off-Balance Sheet Types and Investment Positions on Investors’ Ability in Correcting Off-Balance Sheet Financing

Abstract

The objective of this research is to examine the effect of off-balance sheet financing types and investment position on investors’ correction ability. This research use experimental research approach. The research provides evidence that (1) off-balance sheet types significantly influenced the investors’ ability to correct the off-balance sheet financing transactions, given the investors’ knowledge of creative accounting (2) the investment position did not influence investors’ correction ability (3) investors’ knowledge of creative accounting is positively correlated with their correction ability.