GCG Role and Audit Quality in Reducing Earnings Management Action in Indonesian Manufacturing Firms

Abstract

All elements in the financial statements were responsibility of the management, however investors more pay attention on profit information so that this will trigger the management to do earnings management. This study was intended to analyze the effect of managerial ownership, institutional ownership, independent board of commissioners, audit committee, and the audit quality toward the earnings management. This study is using data 35 manufacturing companies listed on Indonesia Stock Exchange 2013-2015, determination of samples in this study using purposive sampling method. The data of the managerial ownership, institutional ownership, independent board of commissioners, audit committee and audit quality were gathered from the company's annual report. Hypotheses testing using multiple regression analysis. The outcome of the hypotheses testing shows that the managerial ownership, institutional ownership, audit committee and audit quality will give a significant negative effect on earnings management while the independent board of commissioners has no effect on earnings management. ABSTRAK Semua elemen dalam laporan keuangan merupakan tanggung jawab manajemen, namun investor lebih memperhatikan informasi laba sehingga hal ini akan memicu manajemen untuk melakukan manajemen laba. Penelitian ini bertujuan untuk menganalisis pengaruh kepemilikan manajerial, kepemilikan institusional, dewan komisaris independen, komite audit, dan kualitas audit terhadap manajemen laba. Penelitian ini menggunakan data 35 perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia 2013-2015, penentuan sampel dalam penelitian ini menggunakan metode purposive sampling. Data kepemilikan manajerial, kepemilikan institusional, dewan independen, komite audit dan kualitas audit dikumpulkan dari laporan tahunan perusahaan. Uji hipotesis menggunakan analisis regresi berganda. Hasil pengujian hipotesis menunjukkan bahwa kepemilikan manajerial, kepemilikan institusional, komite audit dan kualitas audit akan memberikan pengaruh negatif yang signifikan terhadap manajemen laba sedangkan dewan komisaris independen tidak berpengaruh terhadap manajemen laba.