<![CDATA[The purpose of this research is to empirically test the theory of litigation hypothesis is whether the company will make earnings management policy in the financial statements during the court dispute as research conducted by Hall and Stammerjohan (1997). The sample of this study using purposive sampling technique and tested with multiple linear regression as well as Indonesian companies object to all non-banking companies in the Jakarta Stock Exchange (JSE) in 1993 to 2006, obtained a sample of 15 companies. This research concluded that firstly, there is no influence of claims for compensation against earnings management during the company period of the dispute relative to the that period not as a defendant. Secondly, there is no effect of compensation claims against earnings management during the company dispute period relative to other companies that do not as a defendant. This litigation hyphotesis research prove that litigation event does not effect earnings management.]]>
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