The Effect of Audit Quality, Corporate Governance and CSR on Real Earning Management: Indonesian Evidence

Document Type : Original Article

Authors

• Mahmudi Mahmudi
• Arief Bahtiar
• Afvia Diyun Duhita

Accounting Department, Faculty of Business and Economics, Universitas Islam Indonesia, Indonesia

10.22067/ijaaf.2024.45131.1452

Abstract

This study investigates the effect of audit quality, corporate governance, and Corporate Social Responsibility (CSR) on real earnings management. This study proxies corporate governance by audit committee size, independent commissioner proportion, managerial ownership, and institutional ownership. The population in this study is the manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2019-2021. The sampling method was carried out using a purposive sampling approach. This study obtained 236 observation data from 82 companies in Indonesia. The data was analyzed using regression analysis. The results of this study indicate that audit quality, managerial ownership and institutional ownership positively affect real earnings management. At the same time, the audit committee has a negative significant effect on real earnings management. However, the proportion of independent boards of commissioners and Corporate Social Responsibility disclosure does not affect real earnings management. This research shed light on the role of corporate governance mechanisms and CSR in real earnings management practices of Indonesian public companies.

Keywords

• Earnings Management
• Audit
• Governance

Main Subjects

• Accounting

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©2024 The author(s). This is an open access article distributed under Creative Commons Attribution 4.0 International License (CC BY 4.0)

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