Research Paper
Year: 2023 | Month: February | Volume: 10 | Issue: 2 | Pages: 730-741
DOI: https://doi.org/10.52403/ijrr.20230289
The Effect of Good Corporate Governance, Leverage, and Profitability on Earning Management with Firm Size as a Moderating Variable in Banking Companies Listed on the Indonesian Stock Exchange
Kevin Benika Putra1, Erlina2, Rujiman3
1,2,3Department of Accounting, Faculty of Economics and Business Universitas Sumatera Utara, Indonesia
Corresponding Author: Kevin Benika Putra
ABSTRACT
This study aims to determine the effect of good corporate governance (managerial ownership, institutional ownership, number of commissioners, and audit committees), Leverage, and Profitability on Earnings Management in banking sub-sector companies listed on the Indonesia Stock Exchange. In addition, this study also aims to determine whether firm size can be used as a moderating variable for the relationship between managerial ownership, institutional ownership, number of commissioners, audit committees, leverage, and profitability with earnings management.
The research design carried out is a causal relationship research with a quantitative approach. The sample in this research is 30 banking sub-sector companies listed on the Indonesia Stock Exchange from 2017 to 2021. The type of data used in this research is secondary data. The technique of determining the sample using purposive sampling. The data analysis technique used multiple linear regression analysis and the residual test for the moderating variable, which was carried out with the help of Eviews 10 software.
The results in this study indicate that partially Managerial Ownership has a negative but not significant effect on Earnings Management, Institutional Ownership has a negative but not significant impact on Earnings Management, the number of the Board of Commissioners has a positive but not significant impact on Earnings Management and the Audit Committee has a negative but not significant effect on Profit Management, Leverage has
a negative but not significant impact on Earnings Management, and Profitability has a negative but not significant effect on Earnings Management. As well as other results show that firm size cannot moderate the impact of managerial ownership, institutional ownership, number of commissioners and audit committees, leverage, and profitability on company financial performance in banking sub-sector companies listed on the Indonesia Stock Exchange.
Keywords: Good corporate governance, managerial ownership, institutional ownership, number of commissioners, audit committee, Leverage, Earnings Management Profitability, and Firm Size
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