PENGARUH STRUKTUR MODAL, INVESTMENT OPPORTUNITY SET (IOS), DAN PERTUMBUHAN LABA TERHADAP KUALITAS LABA

Abstract

This research aimed to examine the effect of capital structure, Investment Opportunity Set (IOS), and profit growth on the profit quality. While, capital structure was measured by leverage, Investment Opportunity Set (IOS) was measured by market value of book to asset value and profit growth was measured by profit growth ratio. Meanwhile, the profit quality was measured by discretionary accrual. The research was quantitative. In line with, there were 20 samples from 45 LQ 45 companies which were listed on Indonesia Stock Exchange 2014-2018. In addition, the data analysis technique used multiple linear regression. The research result concluded capital structure had negative effect on the profit quality. This happened as the higher the debt, the more supervision by principal would give. In contrast, Investment Opportunity Set (IOS) had positive effect on the profit quality. It occurred since developing companies were considered positive by the investor. Consequently, the management was encouraged to have profit management in order to maintain its profit growth and quality which low in presentation. On the other hand, profit growth had insignificant effect on profit quality. It happened as the profit growth was considered in low category. Thus, the management was discouraged to have profit management.
Keywords: capital structure, Investment Opportunity Set (IOS), profit growth, profit quality.