THE IMPACT OF CGPI, COMPANY SIZE, AND LEVERAGE ON EARNINGS MANAGEMENT AND THEIR IMPLICATIONS TO THE INTEGRITY OF FINANCIAL STATEMENTSTLE

Henny Wira, Muhyarsyah Muhyarsyah, Eka Nurmala Sari

Abstract


In accordance with the problems raised in the study, the purpose of this study is to find out, test, and analyze the effects of CGPI (corporate governance perception index), company size, and leverage on earnings management and their implications for the integrity of financial statements, both partially and simultaneously.The research method used is quantitative data analysis. Sampling using purposive sampling method that result to be eight companies which consistently followed CGPI programs respectively from 2011-2017 and listed  on  the  Indonesia  Stock  Exchange.  Data  analysis  technique  is  path analysis  and  data  is  processed  using  SPSS  statistic  software.The  results showed that, in sub-structure 1, CGPI partially had no significant effect on earnings management. While company size and leverage have a significant effect on earnings management. CGPI, company size, and leverage simultaneously have a significant effect on earnings management. In sub- structure 2, CGPI, company size, leverage, and earnings management partially and   simultaneously   have   a   significant   effect   on   integrity   of   financial statements. Earnings management is not an intervening variabel among the relationship of CGPI, company size, and leverage with integrity of financial statements.

Keywords: CGPI, company size, leverage, earnings management, integrity of financial statements.

Full Text:

PDF

References


A., R., JR., O., & Sorkin, A. R. (2001). Enron Admits to Overstating Profits by about $600million. Diambil 5 Desember 2018, dari https://www.nytimes.com/2001/11/09/business/enron-admits-to- overstating-profits-by-about-600-million.html

Ang. (2015). Saham Dibekukan 4 Bulan, Inovisi Diduga Manipulasi Laporan Keuangan. Diambil 5 Desember 2018, dari https://finance.detik.com/bursa-dan-valas/d-2917244/saham- dibekukan-4-bulan-inovisi-diduga-manipulasi-laporan-keuangan

Ardison, K. M. M., Martinez, A. L., & Galdi, F. C. (2008). The Effect of Leverage on Earnings Management in Brazil. Advances in Scientific and Applied Accounting, 5(3), 305–324.

Beaver, W. H., & Ryan, S. G. (2000). Biases and Lags in Book Value and Their Effects on the Ability of the Book-to-Market Ratio to Predict Book Return on Equity. Journal of Accounting Research, 38(1), 127–148.

Budi, K., & Aprianto, A. (2006). Laporan Keuangan Kereta Api Diduga

Salah. Diambil 5 Desember 2018, dari https://bisnis.tempo.co/read/81332/laporan-keuangan-kereta-api-diduga-salah

Carslaw, C. A. P. N., & Kaplan, S. E. (1991). An Examination of Audit Delay: Further Evidence from New Zealand. Accounting and Business Research, 22(85), 21–32.

Cornett, M. M., McNutt, J. J., & Tehranian, H. (2009). Corporate Governance and Earnings Management at Large US Bank Holding Companies. Journal of Corporate Finance, 15, 412–430. https://doi.org/10.1016/j.jcorpfin.2009.04.003

Dewi, N. H. U. (2012). Corporate Governance in the Effort of Increasing the Company’s Value. Journal of Economics, Business, and Accountancy Ventura, 15(2), 331–342.

Fajaryani, A. (2015). Analisis Faktor-Faktor yang Mempengaruhi Integritas Laporan Keuangan (Studi Empiris pada Perusahaan Pertambangan yang Terdaftar di Bursa Efek Indonesia Periode 2008-2013). Jurnal Nominal, IV(1), 67–82.

Ghozali, I. (2011). Aplikasi Analisis Multivariat dengan Program IBM SPSS 19. Semarang: Badan Penerbit Universitas Diponegoro.

Hamdan, A. M., Abzakh, M. H., & Al-Ataibi, M. H. (2011). Factors Influencing the Level of Accounting Conservatism in the Financial Statements. International Business Research, 4(3), 145–155.

Haque, A., Mughal, A., & Zahid, Z. (2016). Earning Management and the Role of Accounting Conservatism at Firm Level. International Journal of Economics and Finance, 8(2), 197–205.

Jao, R., & Pagalung, G. (2011). Corporate Governance, Ukuran Perusahaan, dan Leverage terhadap Manajemen Laba Perusahaan Manufaktur Indonesia. Jurnal Akuntansi dan Auditing, 8(1), 43–54.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm: Managerial Behaviour, Agency Cost, and Ownership Structure. Journal of Financial Economics, 3, 305–360.

Kootanaee, A. J., Seyyedi, J., Nedaei, M., & Kootanaee, M. J. (2013).

Accounting Conservatism and Corporate Governance’s Mechanisms: Evidence from Tehran Stock Exchange. International Journal of Economics, Business and Finance, 1(10), 301–319.

Lee, B. B., & Choi, B. (2002). Company Size, Auditor Type, and Earnings

Management. Journal of Forensic Accounting, 27(2), 27–50.


Refbacks

  • There are currently no refbacks.