Financial Factors, Corporate Governance and Earnings Management: Evidence from Indonesian manufacturing industry

DOI

10.2991/icebef-18.2019.154How to use a DOI?

Keywords

profitability; firm size; financial distress; corporate governance; earning management

Abstract

This research aims to analyze and find empirical evidence about the effect of financial factors on earnings management by using corporate governance variables as a moderating variable. Sampling techniques in this study is purposive sampling and acquired 105 manufacturing companies listed on the Indonesian Stock Exchange during the period of 2014 to 2016. The total observed data is 315 firm-years. Financial factors are Profitability, firm size and financial distress. Earnings management is measured by discretionary accrual that uses Modified Jones Model. Corporate governance variables are measured based on the organization's efficiency by comparing the input and output. The data is obtained from Indonesian Capital Market Directory, Indonesian Stock Exchange database, and from company annual statements. The result shows that the implementation of good governance weakens the relationship between financial distress and earnings management. Meanwhile, Profitability and firm size variables do not support the suggested hypothesis.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Supardi Supardi
AU  - Eka Noor Asmara
PY  - 2019/05
DA  - 2019/05
TI  - Financial Factors, Corporate Governance and Earnings Management: Evidence from Indonesian manufacturing industry
BT  - Proceedings of the 1st International Conference on Economics, Business, Entrepreneurship, and Finance (ICEBEF 2018)
PB  - Atlantis Press
SP  - 727
EP  - 736
SN  - 2352-5428
UR  - https://doi.org/10.2991/icebef-18.2019.154
DO  - 10.2991/icebef-18.2019.154
ID  - Supardi2019/05
ER  -