PENGARUH GOOD CORPORATE GOVERNANCE, FREE CASH FLOW DAN FIRM SIZE TERHADAP EARNINGS MANAGEMENT

Abstract

This research aimed to examine the effect of good corporate governance, free cash flow, and firm size on earnings management. The good corporate governance mechanism consisted of institutional ownership, managerial ownership, board of directors, board of commissioners, and audit committee. While, the earnings management is measured by discreationary accruals which used Modified Jones Model. The researsh was quantitative. Moreover, the sampling collection technique used purposive sampling in which the sample was taken baed on criteria given. In line with, there were 156 samples form 39 companies at manufacturing companies which were listed on Indonesia Stock Exchange for 4 years (2014-2017). Iin addition, the data analysis technique used multiple liniear regression with SPSS version 20. The research result concluded the board of directors and board of commissioners had positive effect on the earnings management. On the other hand, the free cash flow and firm size had negative effect on the earnings management. Moreover, the institutional ownership, managerial ownership, and audit committees did not effect on the earnings management.
Keywords: Good Corporate Governance, Free Cash Flow, Firm Size, Earnings Management