Research Paper
Year: 2019 | Month: June | Volume: 6 | Issue: 6 | Pages: 402-408
An Analysis of the Effect of Profitability, Company Size, Institutional Ownership and Leverage on Earnings Management With Financial Difficulties as a Moderating Variable
Riris Pasaribu1, Erwin Abubakar2, Murni Daulay3
1,2,3Postgraduate Program of Accounting, Faculty of Economics and Business, University of North Sumatra, Medan, Indonesia.
Corresponding Author: Riris Pasaribu
ABSTRACT
The aim of this study was to analyze the effect of profitability, company size, institutional ownership and leverage on earnings management with financial difficulties as a moderating variable. This study was a descriptive quantitative study using secondary data. The populations in the study were manufacturing companies listed on the Indonesia Stock Exchange in 2014-2016, totaling 144 companies. Sample selection was done by proportional random sampling method and obtained a sample of 315 companies, resulting 315 sample companies. The analysis technique used to test the hypothesis was multiple regression analysis with SPSS application tools. Based on the results of testing simultaneously, the independent variables, company size, institutional ownership and leverage had a significant influence on earnings management in the manufacturing companies listed on the Stock Exchange in 2014-2016. Partially, the variable profitability, company size and institutional ownership had a significant positive effect on earnings management, while the leverage variable had a significant negative effect on earnings management. Financial difficulties were not variables that can moderate the relationship between profitability, company size, institutional ownership and leverage with earnings management.
Key words: Earnings Management, Profitability, Company Size, Institutional Ownership, Leverage
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