Good Corporate Governance Mechanism and Earnings Management: Study on Manufacturing Companies in Indonesia Stock Exchange
Good Corporate Governance Mechanism and Earnings Management: Study on Manufacturing Companies in Indonesia Stock Exchange

Summary/Abstract: The main objective of this study is to obtain empirical evidence regarding the impact of good corporate governance mechanism (GCG) on the earnings management (EM) of the manufacture companies listed in Indonesia Stock Exchange (IDX) year 2009- 2012. The samples are collected through purposive sampling method in which, 58 companies are selected as they met the inclusion criteria. This study used Friedlan Model to measure the discretionary accruals (DA). The independent variables in this study are remuneration disclosure (RD), size of board commissioners (SBC), meeting frequency meeting board of commissioners (FMBC), frequency meeting of shareholders (FMS), managerial ownership (MO), and institutional ownership (IO). Multiple regression analysis is used to analyze the data. The results show that simultaneously, the independent variables do not have a significant impact on the EM, when tested separately, the FMS has a positive and significant effect on the EM the manufacturing companies listed in IDX.

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