THE EFFECT OF COMPANY SIZE, LEVERAGE, AND CORPORATE GOVERNANCE MECHANISM ON EARNINGS MANAGEMENT IN MANUFACTURING COMPANIES OF FOOD AND BEVERAGE SUB SECTOR LISTED ON IDX 2014-2016

Abstract

This research aims to analyze the effect of Company Size, Leverage, Independent Boards of Commissoner, Audit Quality, and Managerial Ownership on Earnings Management in Manufacturing Companies of Food and Beverage Sub Sector listed on IDX 2014-2016 partially and simultaneously. This research was a causal study research. Population of this research were Food and Beverage Companies listed on IDX 2014-2016. The research used purposive sampling method and 13 companies were selected as sample of the research. The data analysis techniques were simple and multiple linear regression analysis. The results of the research show that Company Size has no effect on Earnings Management (significance value 0.616). Leverage has no effect on Earnings Management (significance value 0.855). Managerial Ownership has no significant effect on Earnings Management (significance value 0.119). Independent Boards of Commissioner has a positive and significant effect on Earnings Management (significance value 0.009). Audit Quality has a positive and significant effect on Earnings Management (significance value 0.011). Meanwhile, Company Size, Leverage, Independent Boards of Commissoner, Audit Quality, and Managerial Ownership simultaneously have a significant effect on Earnings Management (significance value 0.029).

Keywords: Earnings Management, Company Size, Leverage, Independent Boards of Commissoner, Audit Quality, Managerial Ownership