Effect of Foreign Ownership, Audit Committees, Leverage, And Information Asymmetry on Earnings Management with ESG Disclosures as a Moderating Variable

Vinola Herawaty(1), Faisal Reza Mahendra(2*),

(1) Universitas Trisakti
(2) Universitas Trisakti
(*) Corresponding Author

Abstract


This study explores the influence of foreign ownership, audit committee presence, leverage, and information asymmetry on earnings management, with Environmental, Social, and Governance (ESG) disclosure considered as a moderating variable and firm size treated as a control variable. The analysis utilized panel data regression, drawing from a sample of companies listed on the main board of the Indonesia Stock Exchange (IDX) between 2020 and 2023. A purposive sampling method was applied, and outlier cases were excluded, resulting in 115 valid observations. The results indicate that information asymmetry has a significant positive relationship with earnings management. However, this relationship is weakened when moderated by ESG disclosure. In contrast, foreign ownership, audit committee composition, leverage, and standalone ESG disclosure show no significant individual impact on earnings management. Moreover, ESG disclosure does not serve as a mediating factor between foreign ownership, audit committee presence, or leverage and earnings management. These findings highlight the critical role of ESG transparency in curbing earnings management practices that may be detrimental to stakeholder interests.

Keywords


audit committee, foreign ownership, earnings management, ESG disclosure, information asymmetry

References


Astuti, M. A. (2010). Fixed Effect Model Pada Regresi Data Panel. Beta Vol. 3 No. 2 (Nopember) 2010, 134-145.

AL-Duais, S. D., Malek, M., Abdul Hamid, M. A., & Almasawa, A. M. (2022). Ownership structure and real earnings management: evidence from an emerging market. Journal of Accounting in Emerging Economies, 12(2), 380–404. https://doi.org/10.1108/JAEE-01-2021-0008.

Almubarak, W. I., Chebbi, K., & Ammer, M. A. (2023). Unveiling the Connection among ESG, Earnings Management, and Financial Distress: Insights from an Emerging Market. Sustainability (Switzerland), 15(16). https://doi.org/10.3390/su151612348.

Budi, A., & Anggraeni, R. (2023). Determinan Asimetri Informasi Terhadap Praktik Manajemen Laba. Dynamic Management Journal ISSN, 7(1), 2580–2127. http://dx.doi.org/10.31000/dmj.v7i1.7329.

Citrajaya dan Gozali (2020). Pengaruh Corporate Social Responsibility Dan Aktivitas Csr Dalam Dimensi Tata Kelola, Lingkungan, Dan Sosial Terhadap Manajemen Laba (Studi Empiris Pada Perusahaan Non Keuangan Yang Terdaftar Di Bursa Efek Indonesia Pada Tahun 2017-2018). Diponegoro Journal of Accounting Volume 9, Nomor 2, Tahun 2020, 1-14. http://ejournal-s1.undip.ac.id/index.php/accounting.

Dai, Y., Kong, D., & Wang, L. (2013). Information Asymmetry, Mutual Funds And Earnings Management: Evidence From China. China Journal of Accounting Research, 6(3), 187–209.

Donaldson, T. & Preston, L.E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Acad, Manag 20, 65–91.

Ekananda, Mahyus. (2016). Analisis Ekonometrika Data Panel.

Fatimah, N. (2019). Pengaruh leverage dan kepemilikan manajerial terhadap manajemen laba. Universitas Islam Negeri Sunan Ampel.

Feronika, D. C. A., Merawati, L. K., & Yuliastuti, Ayu, I. N. (2021). Pengaruh Asimetri Informasi, Corporate Governance, Net Profit Margin (NPM), Dan Kompensasi Bonus Terhadap Manajemen Laba. Jurnal Kharisma Vol. 3 No. 1.

Fitri, V., & Siswantoro, D. (2021). Can corporate governance mechanisms reduce earnings-management practices in Islamic banks?. Journal of Islamic Accounting and Business Research, 13(1), 16–31. http://dx.doi.org/10.1108/JIABR-04-2019-0081.

Freeman, R.E. (1994). The politics of stakeholder theory: Some future directions. Bussiness Ethics Q. 1994, 4, 409–421.

Ghozali, Imam. (2018). Aplikasi Analisis Multivariate dengan Program IBM SPSS 25.

Gujarati, D. N., & Porter, D. C. (2009). Basic Econometrics (5th ed.).

Handayani, Y. D., & Ibrani, E., Y. (2020). The Effect Of Audit Committee Characteristics On Earnings Management And Its Impact On Firm Value. International Journal of Commerce and Finance (Vol. 6, Issue 2).

Hong, K., Kim, J., & Kwack, S. Y. (2022). External Monitoring, ESG, and Information Content of Discretionary Accruals. Sustainability (Switzerland), 14(13). https://doi.org/10.3390/su14137599.

Hutauruk, M. R., Yanti, N., & Nurjannah, R. (2022). Kepemilikan Manajerial, Kepemilikan Institusional, dan Kepemilikan Asing terhadap Manajemen Laba. Organum: Jurnal Saintifik Manajemen Dan Akuntansi, 5(1), 73–84.

Ikatan Akuntan Indonesia. 2015. Standar Akuntansi Keuangan.

Indriani, A. D., & Pujiono, P. (2021). Analysis of Earnings Management Practices Using the Modified Jones Model on the Industry Company Index Kompas 100. The Indonesian Accounting Review, 11(2), 235–243. DOI 10.14414/tiar.v11i2.2383.

Jensen, M.C. & Meckling, W.H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. J. Finance. Econ, 3, 305–336.

Katmon, N., & Farooque, O. A. (2017). Exploring the impact of internal corporate governance on the relation between disclosure quality and earnings management in the UK listed companies. Journal of Business Ethics, 142, 345-367. DOI 10.1007/s10551-015-2752-8.

Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2018). Intermediate accounting: IFRS edition,3rd Edition.

Kusumawati (2019). Determinan Manajemen Laba: Kajian Empiris Pada Perusahaan Manufaktur Go Publik Di Bursa Efek Indonesia. Jurnal Riset Akuntansi dan Keuangan Indonesia, Vol. 4 No. 1. http://journals.ums.ac.id/index.php/reaksi/index.

Laudza, K. D., & Nindiasari, A. D. (2022). Determinan manajemen laba perusahaan manufaktur di Indonesia. Proceeding of National Conference on Accounting & Finance, Volume 4, 2022, 433-439. http://journals.ums.ac.id/index.php/reaksi/index.

Liyanto, L. W., & Anam, H. (2019). Proporsi Komisaris Independen, Dewan Komisaris, Kompetensi Komite Audit, Frekuensi Rapat Komite Audit Terhadap Konservatisme Akuntansi. Jurnal GeoEkonomi, 130-147.

Nathasa dan Intan. (2018). Pengaruh Asimetri Informasi, Kepemilikan Manajerial Terhadap Manajemen Laba. Jurnal Ekonomi dan Keuangan Vol 4, No 14.

Nguyen, A.H., Nguyen, L.H. and Doan, D.T. (2020), Ownership structure and earnings management: empirical evidence from vietnam real estate sector. Real Estate Management and Valuation, Vol. 28 No. 2, 37-51.

Nugroho, A. C., Firdaus, M., Andati, T., & Irawan, T. (2018). Investment decision in the agency theory framework. Mix: Jurnal Ilmiah Manajemen, 8(1), 16-32.

Peraturan Otoritas Jasa Keuangan Nomor 55/POJK.04/2015 tentang Pembentukan dan Pedoman Pelaksanaan Kerja Komite Audit.

Pradana, F. A. (2021). Determinan Manajemen Laba Pada Perusahaan Publik Di Bursa Efek Indonesia. Jurnal Ilmiah Ekonomi Bisnis, 26(2), 143–154. https://doi.org/10.35760/eb.2021.v26i2.3268.

Purnama, Y. M., & Taufiq, E. (2021). Pengaruh Profitabilitas, Leverage, Firm Size, dan Earnings Power Terhadap Manajemen Laba Pada Perusahaan Sektor Properti Yang Terdaftar di Bursa Efek Indonesia Periode 2017-2019. Journal of Accounting, Finance, Taxation, and Auditing (JAFTA), 3(1), 71–94.

Rankin, M., Ferlauto, K., McGowan, S. C., & Stanton, P. A. (2018). Contemporary issues in accounting second edition.

Ridwan, M. Rafli, & Suryani, E. (2021). Pengaruh Kebijakan Dividen, Kompensasi Eksekutif Dan Asimetri Informasi Terhadap Manajemen Laba. Jurnal Ilmiah MEA (Manajemen, Ekonomi, dan Akuntansi) Vol. 5 No. (3), 2021.

Rizki (2021). Pengaruh Asimetri Informasi, Leverage, Ukuran Perusahaan Dan Profitabilitas Terhadap Manajemen Laba (Studi Empiris Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia Periode 2016-2018). Ajar Vol. 04 No.02 (Agustus) 2021, 187-204.

Ross, S.A. (1973). The economic theory of agency. The American Economic Review, Vol. 63, 134-139.

Santoso, B. A., & Junaeni, I.. (2022). Pengaruh Profitabilitas, Leverage, Ukuran Perusahaan, Likuiditas, dan Pertumbuhan Perusahaan Terhadap Nilai Perusahaan. Owner:Riset Dan Jurnal Akuntansi, 6(2), 1597-1609.

Stubben, S. R. (2010). Discretionary revenues as a measure of earnings management. Accounting Review, 85(2), 695–717. DOI: 10.2308/accr.2010.85.2.695.

Surjandari, D. A., Minanari, & Nurlaelawati, Lela. (2021). The Effect Of Good Corporate Governance, Leverage, Firm Size On Earning Management Evidence From Indonesia. International Journal of Commerce and Finance (Vol. 7, Issue 2).

Tangngisalu, Jannati & Jumady, Edy. (2020). Good Corporate Governance Sebagai Pemoderasi: Hubungan Asimetri Informasi Terhadap Manajemen Laba Pada Perusahaan Lq 45. Jurnal Ilmiah Manajemen Bisnis Dan Inovasi Universitas Sam Ratulangi Vol.7 No.1 Maret 2020, 81 – 9.

Tran, T. T., Thi Do, Y. H., & Kim Vo, N. (2023). The impact of foreign ownership, corporate governance on earning management: Fuzzy-set qualitative comparative analysis. Cogent Business and Management, 10(3). https://doi.org/10.1080/23311975.2023.2247869

Velte, P. (2019). The bidirectional relationship between ESG performance and earnings management – empirical evidence from Germany. Journal of Global Responsibility, 10(4), 322–338. http://dx.doi.org/10.1108/JGR-01-2019-0001.

Wahyuni, W., Maulidianti, A., Yulianto, Y., & Dosinta, N. F. (2023). Determinan Manajemen Laba pada Sektor Transportasi Saat Pandemi COVID-19. Jurnal Akuntansi Dan Keuangan, 11(2), 119. https://doi.org/10.29103/jak.v11i2.11666.

Watts, Ross L., & Jerold L. Zimmerman. (1986). Positive Accounting Theory.

Yangklan, P., & Sincharoonsak, T. (2021). Corporate Social Responsibility Reporting Affecting Earning Management and Operational Performance of Companies Listed in the Stock Exchange of Thailand. In Turkish Journal of Computer and Mathematics Education (Vol. 12, Issue 12).




DOI: http://dx.doi.org/10.33019/ijbe.v10i1.1261

Article Metrics

Abstract view : 0 times

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Creative Commons License

Integrated Journal of Business and Economics is licensed under a Creative Commons Attribution 4.0 International License.