The Effect Of Good Corporate Governance Mechanism On Earning Management
Keywords:
Board of Directors , Independent of Commissioner , Audit Committee , Type of Auditor , Earnings ManagementAbstract
Earning management activities are often an alternative carried out by company officials to show the performance of their company's financial statements. One such phenomenon occurred at PT Tiga Pilar Sejahtera (TPS) Food Tbk in 2018 and resulted in two boards of directors being punished in this case. The purpose of this study is to test and analyze the effect of good corporate governance mechanisms on earning management actions. The mechanism of good corporate governance in this study consists of the size of the board of directors, the size of independent commissioners, the frequency of audit committee meetings, audit committee expertise, and the type of auditor as well as Leverage and Profitability as control variables. This research method was carried out using a quantitative approach with multiple linear regression analysis techniques and hypothesis testing. The sample in this study is 70 manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the 2019-2021 period using purposive sampling techniques. The results showed that the size of the board of directors, frequency of audit committee meetings, audit committee expertise, and type of auditor had a negative influence on earning management, while the size of independent commissioners had no effect on earning management.
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