Analysis of Governance, Leverage and Financial Distress Conditions on Earnings Management in the Banking Services Sector in Indonesia

Authors

  • Puspita Rama Nopiana STIE Galileo
  • Rusmiati Salvi STIE Galileo

DOI:

https://doi.org/10.54099/aijb.v1i1.69

Keywords:

Governance, Leverage, Financial Distress, Earnings Management

Abstract

This research is motivated by the existence of information asymmetry and the tendency of investors to pay more attention to earnings information as a parameter of company performance, which will encourage management to manipulate earnings which is called earnings management. The purpose of this study was to identify the effect of governance, leverage and financial distress conditions on earnings management in companies listed on the Indonesia Stock Exchange (IDX) focused on the banking sector. The method used is a quantitative descriptive method, with 35 data samples from 5 companies that have met the research sample criteria in the banking services sector for the period 2013-2019. The results of this study were analyzed and processed by statistical tests showing that leverage has a positive and significant effect on earnings management,

 

References

Dharsono, & Ashari. (2010). Practical Guidelines for Understanding Financial Statements (1st ed.). CV. Andi Offset.

Febriyanti, W., Putri, NK, & Suyono, E. (2016). Relationship of Good Governance and Earnings Management: Quality Accrual Approach. Journal of Accounting Science, 9, 195–206.

Iskamto, D., & Ghazali, PL (2021). Framework of Mediating Role of MSEs Performance On The Relationship Between Entrepreneur Environment and Entrepreneur Satisfaction. The Journal of Management Theory and Practice (JMTP), 71–73. https://doi.org/10.37231/jmtp.2021.2.2.118

Iskamto, D., Ghazali, PL, & Aftanorhan, A. (2019). Effect Contextual Factor Toward Entrepreneurial Intention Among Young Educated. International Conference on Industrial Engineering and Operations Management Riyadh, 7. Saudi Arabia.

Iskamto. (2015). Market Anomalies on the Indonesia Stock Exchange. Journal of Business Management Tpak, VII(3).

Jao, R. (2011). Corporate Governance, Company Size, and Leverage on Profit Management of Indonesian Manufacturing Companies. Journal of Accounting & Auditing, 8, 1–94.

Krisnauli, PBH (2014). The Effect of Corporate Governance Mechanisms and Ownership Structure on Agency Costs (Empirical Study on Manufacturing Companies Listed on the IDX 2010-2012), 3(2), 669–681.

Melinda, & Widyasari. (2019). Factors Affecting Earnings Management of Manufacturing Companies Listed on the IDX. Journal of Multiparadigm Accounting, 1, 452–359.

Natalia, D., & Pudjolaksono, E. (2013). The Effect of Good Corporate Governance Mechanisms on Earning Management Practices of Banking Sector Business Entities on the IDX 2008-2011. University of Surabaya Student Scientific Journal, 2, 1–18.

Praditya, OR (2010). analysis of the effect of corporate governance mechanisms on earnings management and firm value in companies listed on the IDX. Diponegoro University.

Setiawati. (2021). Analysis of the Effect of Capital Structure and Dividend Policy on Firm Value in Manufacturing Companies on the IDX. Husnayain Business Review, 1(1), 17–27. https://doi.org/10.54099/hbr.v1i1.10

Sukmadewi, R. (2021). Analysis of the Effect of Current Ratio, Working Capital, Debt Ratio on the Performance of Various Industrial Companies Listed on the IDX. Husnayain Business Review, 1(1), 51–59. https://doi.org/10.54099/hbr.v1i1.25

Downloads

Published

2022-01-23

How to Cite

Rama Nopiana, P., & Rusmiati Salvi. (2022). Analysis of Governance, Leverage and Financial Distress Conditions on Earnings Management in the Banking Services Sector in Indonesia. Asean International Journal of Business, 1(1), 34–42. https://doi.org/10.54099/aijb.v1i1.69

Issue

Section

Articles