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The Effect of Good Corporate Governance (GCG) Mechanism on Earnings Management Practices of The Stubben Model (Study Case on Mining Sector Companies Listed on The Indonesia Stock Exchange 2014-2019)

Author

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  • Muhammad Fairus

    (Mercu Buana University, Indonesia)

  • Pardomuan Sihombing

    (Mercu Buana University, Indonesia)

Abstract

This study was prepared with the intention of analyzing the impact of the Good Corporate Governance (GCG) Mechanism on the Stubben Model of Profit Management (analysis of Mining Sector Companies on the Indonesia Stock Exchange for the period 2014-2019). The population used in the study is the mining sector companies on the IDX. The sample selection method used purposive sampling technique. To process data after sample selection, compile a research model, determine the variables analyzed in the study, and propose a hypothesis, the next step is to carry out data processing procedures through regression analysis with panel data. The results of the analysis conclude that (1) Institutional Ownership has a negative and significant impact on Earnings Management, (2) Managerial Ownership has a negative and significant impact on Earnings Management, (3) The Independent Board of Commissioners has a negative and significant impact on Earnings Management, (4) The Audit Committee has a negative and significant impact on Earnings Management, and (5) Audit Quality has a negative and significant impact on Earnings Management.

Suggested Citation

  • Muhammad Fairus & Pardomuan Sihombing, 2020. "The Effect of Good Corporate Governance (GCG) Mechanism on Earnings Management Practices of The Stubben Model (Study Case on Mining Sector Companies Listed on The Indonesia Stock Exchange 2014-2019)," European Journal of Business and Management Research, European Open Science, vol. 5(6), November.
    • Handle: RePEc:epw:ejbmr0:v:5:y:2020:i:6:id:50602
    DOI: 10.24018/ejbmr.2020.5.6.602
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