<![CDATA[Earnings management has predominantly been examined in profit-oriented organizations, while its meaning and practice in savings and loan cooperatives remain relatively underexplored. Unlike investor-owned firms, cooperatives are member-oriented organizations in which Surplus of Cooperative Operations (Sisa Hasil Usaha/SHU) functions not only as an indicator of financial performance but also as a mechanism for distributing economic benefits to members. This study aims to understand how earnings management is interpreted and practiced by managers and board members of savings and loan cooperatives, particularly in relation to accounting discretion, members’ interests, SHU distribution, and stewardship. The study employs a qualitative approach using a case study design. Data were collected through in-depth interviews with six informants from two savings and loan cooperatives, referred to as Cooperative A and Cooperative B, and analyzed using thematic analysis with the support of NVivo. The findings indicate that earnings management is not necessarily perceived as opportunistic manipulation but may be understood as responsible accounting discretion, particularly in managing member receivables, establishing loan loss provisions, and recognizing revenue. Such discretion is closely associated with stewardship responsibilities, accountability to members, financial prudence, and cooperative sustainability. Differences between the two cooperatives further demonstrate that accounting discretion is shaped by organizational context and considerations regarding SHU distribution and members’ welfare. The study recommends strengthening transparency and accountability in cooperative financial reporting and governance to ensure that accounting discretion remains aligned with members’ interests, prudent financial management, and long-term cooperative sustainability.]]>
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