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Factors Affecting Earnings Management in the Indonesian Stock Exchange

Author

Listed:
  • Nico Alexander

    (Trisakti school of Management, Indonesia. Author-2-Name: Hengky Author-2-Workplace-Name: Trisakti school of Management, Indonesia.)

Abstract

"Objective � The purpose of this research is to analyze the effect of growth, leverage, fixed asset turnover, profitability, firm size, firm age, industry, audit quality, and auditor independence toward earnings management. Methodology/Technique � The population of this research consist of various sectors of non-financial companies that were listed on the Indonesian Stock Exchange (IDX) between 2013 and 2015. The research uses three recent years of data and tests variables that have not been used by prior research. The sample was chosen by using a purposive sampling method. The hypothesis is tested using multiple regression with an SPSS program to investigate the influence of each independent variable to earnings management. Findings � The research results show that return on assets influences earnings management and growth, leverage, fixed asset turnover, profitability, firm size, firm age, industry, audit quality, and auditor independence do not influence earnings management. Novelty � The study supports that the manager in a company will engage in earnings management to receive a bonus from investors because they have received a higher profit."

Suggested Citation

  • Nico Alexander, 2017. "Factors Affecting Earnings Management in the Indonesian Stock Exchange," GATR Journals jfbr124, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:jfbr124
    as

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    References listed on IDEAS

    as
    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Sharif Mohammad Aqabna & Mehmet Aga & Huthayfa Nabeel Jabari, 2023. "Firm Performance, Corporate Social Responsibility and the Impact of Earnings Management during COVID-19: Evidence from MENA Region," Sustainability, MDPI, vol. 15(2), pages 1-20, January.
    2. Ahmad Almashaqbeh & Hasnah Shaari & Hijattulah Abdul-Jabbar, 2019. "The Effect of Board Diversity on Real Earnings Management: Empirical Evidence From Jordan," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(5), pages 495-508, August.
    3. Boachie, Christopher & Mensah, Emmanuel, 2022. "The effect of earnings management on firm performance: The moderating role of corporate governance quality," International Review of Financial Analysis, Elsevier, vol. 83(C).

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    More about this item

    Keywords

    Earnings Management; Growth; Leverage; Fixed Asset Turnover; Profitability; Firm Size; Firm Age; Audit Quality; Auditor Independence; Industry;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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