PENGARUH FREE CASH FLOW, FINANCIAL DISTRESS, KEBIJAKAN DIVIDEN, DAN UKURAN PERUSAHAAN TERHADAP MANAJEMEN LABA

Abstract

Earnings management is the financial statement fabrication carried out by management, especially in
manipulating company profits to attract the attention of investors. This research aimed to examine the effect of
free cash flow, financial distress, dividend policy, and firm size on earnings management. The research was
quantitative with secondary data taken from the annual report and the company’s financial statements in the
energy sector listed on the Indonesia Stock Exchange (IDX) during 2018-2022. Furthermore, the data collection
technique used purposive sampling. In line with that, 32 data samples were taken. In total, there were 160 data
with 5 years of observation. Moreover, the data analysis technique used multiple linear regression. The result
showed that both free cash flow and firm size had a positive effect on earnings management. This meant the first
and the fourth hypotheses were accepted. However, the dividend policy did not affect on earnings management. In
contrast, financial distress had a negative effect on earnings management. It meant the second and third hypotheses
were rejected.