The effect of financial characteristics on earnings management moderated by corporate governance

Article Sidebar

PDF (Spanish)
Published: 2022-05-23
DOI: https://doi.org/10.22395/seec.v24n57a7
Keywords:
Leverage, profitability, free cash flow, earnings management, self-assessment

Main Article Content

Anny Widiasmara
Universitas PGRI Madiun
Feby Andika Endah Saputri
Universitas PGRI Madiun

Abstract

The case for earnings management has often been made by companies that aim to improve company performance. The concept of Good Corporate Governance is applied to reduce various risks in earnings management, therefore, this study aims to empirically test whether there is an effect of profitability leverage and free cash flow on earnings management, as well as whether good corporate governance approached by self-assessment can moderate the effect of leverage, profitability, and free cash flow on earnings management in state-owned enterprises. The data used is secondary data from the Indonesian stock exchange and the company’s website. The population of this study is stateowned companies listed on the Indonesian Stock Exchange in 2013-2019. The data analysis technique used moderated regression analysis. The results showed that leverage and free cash flow influenced earnings management, while profitability has no effect on earnings management and self-assessment can moderate the effect of leverage on management and self-assessment cannot moderate the effect of profitability and free cash flow on earnings management.

Downloads

Download data is not yet available.

Article Details

Issue

Vol. 24 No. 57 (2021): Julio-diciembre

Section

Articles

Los artículos que se aprueban para publicación en la revista Semestre Económico deben acogerse a las siguientes condiciones:

a)    Los autores ceden a la revista Semestre Económico los derechos patrimoniales (copy right), para lo cual debe entregar el formato de originalidad y derechos de autor debidamente diligenciado y con firmas originales.

b)    Los artículos que se publican en la revista Semestre Económico se pueden usar, reproducir, transmitir y exponer con fines académicos siempre y cuando se cumplan las siguientes condiciones:

  • Se cite la referencia bibliográfica de Semestre Económico (autores, revista, editorial, edición,…)
  • No se use con fines comerciales
  • El uso con fines diferentes o la publicación en otro sitio electrónico requiere de la autorización por escrito del editor de la revista.

Author Biographies

Anny Widiasmara, Universitas PGRI Madiun

Bachelor of economics, STIE Malangkucecwara Malang, Indonesia. Master of Accounting Science. Universitas Sebelas Maret. Surakarta. Indonesia. Lecturer and researcher at the Faculty of Economics and Business, Universitas PGRI Madiun, Indonesia. Fundamental research group member. E-mail: anny.asmara@gmail.com.

Feby Andika Endah Saputri, Universitas PGRI Madiun

Student at the Universitas PGRI Madiun, Indonesia. Researcher at the Accounting Study Program, Faculty of
Economics and Business, Universitas PGRI Madiun, Indonesia. Member of the fundamental research group.
E-mail: febyandika267@gmail.com

How to Cite

Widiasmara, A. ., & Endah Saputri, F. A. . (2022). The effect of financial characteristics on earnings management moderated by corporate governance. Semestre Económico, 24(57), 151-170. https://doi.org/10.22395/seec.v24n57a7

References

Alonso, P. D. A., Iturriaga, F. J. L., & Sanz, J. A. R. (2005). Financial decisions and growth opportunities: A Spanish firms panel data analysis. Applied Financial Economics, 15(6), 391-407.

Amelia, W., & Hernawati, E. (2016). Pengaruh Komisaris Independen, Ukuran Perusahaan, dan nProfitabilitas terhadap Manajemen Laba. NeO~Bis.

Ardison, K. M. M., Martinez, A. L., & Fernando Caio Galdi. (2012). The effect of leverage on earnings management in Brazil. Advances in Scientific and Applied Accounting 5(3).

Basir, S. I. & Muslih, M. (2019). Pengaruh Free Cash Flow, Leverage, Profitabilitas Dan Sales Growth Terhadap Manajemen Laba. Jurnal Aksara Public. 3(2), 104-111.

Brigham, E. F. and Houston, J. F. (2010). Dasar-dasar Manajemen Keuangan (Essential of Financial Management). Ke-11 Buku.

Brigham, E. F. and Houston, J. F. (2009). Fundamentals of Financial Management. 12th Edition. Mason: South-Westtern Cengage Learning.

Chung, R., FIRTH, M., KIM, Jeong _ Bon.CHUNG, R., FIRTH, M., & KIM, J. B. (2005). Earnings management, surplus free cash flow, and external monitoring. Journal of Business Research, 58(6), 766-776.

Puspitasari, E. P., Diana, N. and Cholid D. M, (2019). Pengaruh Faktor Good Corporate Governance, Free Cash Flow, dan Leverage terhadap Manajemen Laba pada Perusahaan Batubara. E-JRA, 08(03), 87-100.

Cardoso, F.T., Martinez A. L. and Teixeira, A.J.C. (2014). Free Cash Flow and Earnings Management in Brazil: The Negative Side of Financial Slack. Global Journal of Management and Business Research: D Accounting and Auditing Research Journal Publisher: Global Journals Inc. (USA). 14(1), 86-96.

Herlambang, & Roy., A. (2017). Pengaruh Free Cash Flow dan Financial Leverage Terhadap Manajemen Laba dengan Good Corporate Governance Sebagai Variabel Moderasi. Journal Online Mahasiswa 4(1), 15-29.

Jogiyanto, & Hartono (2013). Teori Portofolio dan Analisis Investasi. Yogyakarta: BPFE. Kasmir. (2019). Analisis Laporan Keuangan (Edisi Revi). PT Raja Grafindo Persada.

Mahawyahrti, P. T. & Nyoman, I. G. A. (2016). Asimetri informasi, leverage, dan ukuran perusahaan pada manajemen laba. Jurnal Ilmiah Akuntansi Dan Bisnis, 11(2).

Mawati, Rufiyad, E., Hardiningsih, Pancawati, Srimindarti, & Ceacilia. (2017). Corporate governance memoderasi earnings management dan profitabilitas terhadap nilai perusahaan. Prosiding seminar nasional multi disiplin ilmu & call for papers unisbank ke-3(SENDI _ U 3) 2017 ISBN: 9-789- 7936-499-93. https://www.unisbank.ac.id/ojs/index.php/sendi_u/article/view/5023

McConnell, J., & Servaes, H. (1995). Equity ownership and two faces of debt. Journal of Financial Economics, 39 (1), 131-157.

Nekhili, M., Ben, I.F., Chtioui, T. and Lakhal, F. (2016). Free Cash Flow And Earnings Management: The Moderating Role Of Governance And Ownership. The Journal of Applied Business Research, 32(1), 255-268.

Oktasari, D. P. (2020). Effects of capital structure, profitability and firm size towards earning management in manufacturing companies. EPRA International Journal of Research and Development (IJRD), Volume 5(5), 74-83.

Rusmin, R., Astami, E. W., & Hartadi, B. (2014). The impact of surplus free cash flow and audit quality on earnings management: The case of growth triangle countries. Asian Review of Accounting, 22(3), 217-232.

Setiawati, E., Mujiyati, M., & Rosit, E. M. (2019). Pengaruh free cash flow dan leverage terhadap manajemen laba dengan good corporate governance sebagai variabel moderasi. AKUNTABILITAS 13(1), 69-82. https://doi.org/10.29259/ja.v13i1.9481

Sochib. (2016). Good Corporate Governance, Manajemen Laba & Kinerja Keuangan. Yogyakarta: deepublish.

Subramanyam, K. (2017). Analisis Laporan Keuangan Financial Statement Analysis (ke-11). Salemba Empat. Sulistyanto, H. S. (2008). Manajemen Laba Teori Dan Model Empiris. PT Grasindo.

Widyaningrum, R., Amboningtyas, D., & Fathoni, A. (2018). The effect of free cash flow, profitability,

and leverage to earnings managemet with good corporate governance as a moderating variable. Journal of Management 4(4).