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The Influence of Information Asymmetry, Profitability and Company Size on Earnings Management in Companies in the Goods and Consumption Industry Sector Listed on the Indonesian Stock Exchange for the 2016-2020 Period

Author

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  • Magdalena Judika Br. SIRINGORINGO

    (HKBP Nommensen University, North Sumatera, Indonesia)

  • Jadongan SIJABATB

    (HKBP Nommensen University, North Sumatera, Indonesia)

Abstract

This study aims to determine the effect of information asymmetry, profitability and company size on earnings management in companies listed on the Indonesia Stock Exchange for 2016-2020 period. Several previous studies on earnings management have shown different results. Therefore, other studies need to be conducted to re-test the theory of earnings management. The population of this study were 53 companies in the consumer goods industry sub-sector. The sampling method used is the purposive one, so that 22 sample companies are obtained for the five years of monitoring with 86 results (observations). Research data were obtained from sample companies downloaded from the Indonesia Stock Exchange website. The data analysis techniques used are descriptive statistical analysis and multiple regression analysis. The data analysis processes carried out first are descriptive statistics, classical assumption test, multiple regression analysis and then hypotheses testing. The results of this study partially show that only profitability has a significant effect on earnings management, while information asymmetry and company size have no effect on it. The results of this study simultaneously show that information asymmetry, profitability and company size have a significant effect on earnings management.

Suggested Citation

  • Magdalena Judika Br. SIRINGORINGO & Jadongan SIJABATB, 2023. "The Influence of Information Asymmetry, Profitability and Company Size on Earnings Management in Companies in the Goods and Consumption Industry Sector Listed on the Indonesian Stock Exchange for the ," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 4(1), pages 58-72, January.
    • Handle: RePEc:ahd:journl:v:4:y:2023:i:1:p:58-72
    DOI: 10.37945/cbr.2023.01.07
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    More about this item

    Keywords

    information asymmetry; profitability; company size; earnings management;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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