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The Effects of Corporate Governance on Earnings Management

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Meningkatnya kasus kebangkrutan yang terjadi pada korporasi besar menuntun kepada perhatian yang lebih dalam terhadap penerapan corporate governance. Paper ini menganalisis pengaruh komite audit, jumlah komisaris, komposisi dewan komisaris, struktur kepemilikan dan keterbukaan, serta ukuran perusahaan terhadap manajemen laba. Sampel mencakup 26 bank yang berasal dari beragam tingkatan aset, terbuka maupun tertutup, pada kurun waktu 2007-2011. Dengan menggunakan Jones Model yang dimodifikasi (1995) dan regresi linear berganda, kami menemukan bahwa hanya komite audit serta komposisi dewan komisaris yang secara signifikan mempengaruhi manajemen laba.

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The Effects of Corporate Governance on Earnings Management

  1. 1. THE EFFECTS OF CORPORATE GOVERNANCE ON EARNINGS MANAGEMENT (CASE STUDY OF INDONESIAN BANKING INDUSTRY 2007-2011) By Ali Mutasowifin Tutut Ida Hardiati Wibowo
  2. 2. Background  Economic crisis  Banking industry potential in development.  Low market penetration.
  3. 3. audit committee (AC) board of commissioners size (BCS) ownership and disclosure status (ODC) board of commissioners composition (BCC) company size (CS) Earnings Management
  4. 4. Population and Sample This research population is Indonesian banks (2007-2011). Sampling techniques by purposive sampling in order to obtain representative samples in accordance with specified criteria.
  5. 5. Population and Sample Total Banks (2011) 120 Islamic banks (11) Mixed banks (12) Foreign banks (10) Banks with invalid data (26) Banks with incomplete data (35) Sample banks 26
  6. 6. Data Analysis Methods The method used to detect earnings management is Modified Jones Model (1995). The model estimates the expected accrual rate (non- discretionary accrual) as a function of the difference between the change in revenue, accounts receivable, and fixed assets.
  7. 7. Processing and Data Analysis
  8. 8. Regression Assumption Test 1. Normality Test 2. Multicollinearity Test 3. Autocorrelation Test 4. Heteroscedasticity Test
  9. 9. Hypothesis Test 1. F Test 2. t Test 3. Coefficient of Determination
  10. 10. Multiple Linear Regression Test Based on the table, the multiple regression equation as follows:
  11. 11. CONCLUSION  Audit committee affect earnings management.  Board of commissioner size does not affect earnings management.  Ownership and disclosure structure does not affect earnings management.  Board of commissioner composition affect earnings management.  Company size does not affect earnings management.
  12. 12. THANK YOU

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