Indonesia Conference Directory

This study aims to detect indications of bond defaults by conducting a thorough analysis from published financial statement. Published financial statement of the firm have roles to give value added information for investors and creditors in making investment decision. Those roles can be failed when management do creative accounting to mislead users of the financial statement. PT Trikomsel Oke, Tbk (TRIO)s financial statements show that the companys revenue and profits increased during 2009-2014. However, the Indonesia rating agency (PEFINDO) declared default on both bonds issued by TRIO in November 2015, even though the signal TRIO gave to its financial statements was an unqualified opinion from one of the big four Public Accountants (KAP) for six consecutive years, and got PEFINDOs investment grade. The financial statement is analyzed with financial ratio and financial shenanigans indicators. Evidences show that there are some red flags of creative accounting and shenanigans action before the bonds declared a default in 2015. The profitability ratio that is not in line with cash flow from operation is the main concern of shenanigans indicators and also the highlight from all respondents. This result suggests investors and creditors to be more vigilant in analyzing the published annual report