Research Paper
Year: 2023 | Month: February | Volume: 10 | Issue: 2 | Pages: 156-167
DOI: https://doi.org/10.52403/ijrr.20230221
The Influence of Good Corporate Governance on a Company's Financial Performance with Earning Management as a Moderating Variable in Construction and Building Sub-Sector Companies Listed on the Indonesia Stock Exchange Period 2013-2021
Yusmulianto1, Erlina2, Abdhy Aulia3
1,2,3Department of Accounting, Faculty of Economics and Business Universitas Sumatera Utara, Indonesia
Corresponding Author: Yusmulianto
ABSTRACT
This study aims to determine the effect of good corporate governance (managerial ownership, institutional ownership, number of board of commissioners, and audit committees) on the company's financial performance in construction and building sub-sector companies listed on the Indonesia Stock Exchange. In addition, this research also aims to determine whether earnings management can be used as a moderation variable for managerial ownership relationships, institutional ownership, the number of board of commissioners, and audit committees with the company's financial performance.
The research design conducted is a causal relationship research with a quantitative approach. The sample in this study was ten construction and building sub-sector companies listed on the Indonesia Stock Exchange from 2013 to 2021. The type of data used in this study was secondary data. Sample determination techniques using purposive sampling. Data analysis techniques use multiple linear regression analysis and residual tests for moderation variables conducted with the help of EViews software 10.
The results in this study indicate that partially managerial ownership has a positive and significant effect on the company's financial performance, institutional ownership has a negative and significant impact on the company's financial performance, the number of the board of commissioners has a positive but not significant effect on the company's financial performance, and the audit committee has a negative but not significant impact on the company's financial performance as well as other results show that earning management needs to moderate the influence of managerial ownership, institutional ownership, or the number of boards of commissioners and audit committees on the company's financial performance in the construction and building sub-sector companies listed on the Indonesia Stock Exchange.
Keywords: Good Corporate Governance, Managerial Ownership, Institutional Ownership, Number of Commissioners, Audit Committees, Company Financial Performance, and Earning Management.
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