FAKTOR-FAKTOR YANG MEMPENGARUHI PRAKTIK INCOME SMOOTHING DENGAN GOOD CORPORATE GOVERNANCE SEBAGAI PEMODERASI

Abstract

The practice of income smoothing is a common phenomenon to reduce reported profit fluctuations. This research aimed to examine and find out the result of investment decisions, intellectual capital, and financial leverage on income smoothing which was moderated by Good Corporate Governance. Furthermore, the data were secondary, in the form of annual financial statements taken from the Indonesia Stock Exchange (IDX) during 2017-2021. The data collection technique used purposive sampling, in which the sample was based on the criteria given. In line with that, there were 24 companies during 2017-2021 which suited as the sample. The result of the logistic regression analysis test showed that investment decisions had a negative effect on income smoothing. However, intellectual capital had a positive effect on income smoothing. On the other hand, financial leverage had a negative effect on income smoothing. Likewise, Good Corporate Governance had a negative effect on income smoothing. Additionally, Good Corporate Governance moderated the effect of investment decisions on income smoothing. In contrast, Good Corporate Governance did not moderate the effect of intellectual capital on income smoothing. Similarly, Good Corporate Governance did not moderate the effect of financial leverage on income smoothing.