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The Influence Of Earning Management To Firm Value In Indonesia Manufacturing Companies

Author

Listed:
  • Mitha FILANDARI

    (Sarjana Ekonomi,Faculty of Economic, Gunadarma University, Jakarta, Indonesia)

  • Susy SUHENDRA

    (Professor, PhD,Faculty of Economic, Gunadarma University, Jakarta, Indonesia)

Abstract

Firm value is one of the indicators in determining whether the company is in health state and deservesto invest in it. This makes the manager to act appropriately by performing earnings management practicesto increase the firm value but with the implementation of GCG it is expected to reduce the earningsmanagement practices. This study aimed to examine the effect of GCG mechanisms (independentcommissioner, managerial ownership, institutional ownership, and audit quality) as moderating variablesin the relationship between earnings management and firm value. The object in this study is a manufacturingcompany listed in Indonesia Stock Exchange period in 2010-2014. This study uses purposive samplingmethod so that 31 companies were obtained as study sample. Data used in this study are secondary whichare financial statement and annual report. Data analysis in this study uses multiple linear regressionanalysis and Moderated Regression Analysis with SPSS 21. The results show that GCG mechanisms whichcan be moderating variable between earnings management and firm value are independent commissionerand audit qualities whereas managerial ownership and institutional ownership cannot moderate therelationship between earnings management and firm value.

Suggested Citation

  • Mitha FILANDARI & Susy SUHENDRA, 2017. "The Influence Of Earning Management To Firm Value In Indonesia Manufacturing Companies," Economy and Sociology, The Journal Economy and Sociology, issue 3, pages 28-36.
    • Handle: RePEc:aat:journl:y:2017:i:3:p:28-36
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    References listed on IDEAS

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    1. Ammann, Manuel & Oesch, David & Schmid, Markus M., 2011. "Corporate governance and firm value: International evidence," Journal of Empirical Finance, Elsevier, vol. 18(1), pages 36-55, January.
    2. 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.
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