Company Characteristics, Corporate Governance, Audit Quality Impact on Earnings Management

Friska Firnanti ()
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Friska Firnanti: Accounting, Trisakti School of Management, Indonesia Author-2-Name: Kashan Pirzada Author-2-Workplace-Name: Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia, Kedah, Malaysia Author-3-Name: Budiman Author-3-Workplace-Name: Trisakti School of Management, Kyai Tapa No. 20, 11440, Jakarta, Indonesia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:

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Abstract: Objective - The purpose of this research is to empirically examine how company characteristics, corporate governance and audit quality affect earnings management. Methodology/Technique - The population used for this research is manufacturing companies listed on the Indonesian Stock Exchange between 2013 and 2015. The sampling method used in this research is purposive sampling. 64 companies are examined, with 192 items of data being obtained. Finding - This research also uses statistical testing through a multiple regression. The results show that return on assets, financial leverage, free cash flow, and sales growth all have an influence on earnings management. Meanwhile, other variables such as managerial ownership, institutional ownership, board size, the presence of an audit committee, firm size, and audit quality have no significant effect on earnings management. Novelty - In this research, company characteristics are proxied with the return on assets, financial leverage, firm size, free cash flow, and sales growth, while corporate governance is proxied with managerial ownership, institutional ownership, board size, and the presence of an audit committee. Type of Paper - Empirical.

Keywords: Company Characteristics; Corporate Governance; Audit Quality; Earnings Management; Agency Theory. (search for similar items in EconPapers)
JEL-codes: M40 M41 M49 (search for similar items in EconPapers)
Pages: 7
Date: 2019-07-12
New Economics Papers: this item is included in nep-acc, nep-cfn and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Accounting and Finance Review, Volume 4, Issue 2

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