 Institutional Ownership, External Auditor Reputation, and Income Smoothing: Evidence from IndonesiaSinta Setiana (), I Nyoman Agus Wijaya () and Hansel Octavius Rinaldy () Asian Business Research Journal, 2025, vol. 10, issue 5, 101-105 Abstract: This study investigates how institutional ownership and external auditor reputation affect the income smoothing of the LQ45 index non-financial firms with firm size as the control variable. Because of the consistency of the companies shaping this index between 2017 and 2022, this study utilizes the population and samples of 18 and 15 as the total. Then, this investigation applies the multiple regression model to analyze the data. Based on the statistical testing outcome, this study infers the negative tendency of institutional ownership and external auditor reputation toward income smoothing. It indicates that institutions and reputable external auditors can cut this earning smoothing. Hence, it practially suggests that the company should utilize the Big Four auditor to overcome this smoothing, leading to the trust of public shareholders to buy the stocks. Also, these shareholders should select companies with a high share portion of institutions to obtain trusted earning reporting. Keywords: Earnings management; External auditor reputation; Income smoothing; Institutional possession. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ajn:abrjou:v:10:y:2025:i:5:p:101-105:id:450 Access Statistics for this article More articles in Asian Business Research Journal from Eastern Centre of Science and Education |
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