Factors affecting earnings management: manufacturing companies in Indonesia
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Abstract
Proving whether profitability, managerial ownership and firm size influence earnings management were the objectives of this study. All manufacturing companies listed on the Indonesia Stock Exchange in the 2014-2018 period were made the population in this study. The sample selection technique used was purposive sampling, the sample used amounted to 34 companies for 5 years. So, the observation data amounted to 170 data. Data analysis using Structural equation modeling (SEM) with Warp PLS 4.0. From the test results prove that the profitability variable affects earnings management, while managerial ownership and company size do not affect earnings management. Therefore, the recommendations for future research is to add another variable because there may be other variables not included in this study, which may affect earnings management such as good corporate governance, auditor reputation, company age, leverage, and so on.
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