Good corporate governance moderates the effect of corporate social responsibility disclosure, financial distress and managerial ability on earnings management with variable

Ni Putu Anindya Sarasija Prameswari; I Gusti Agung Ngurah Suaryana; I Ketut Sujana; Ni Ketut Rasmini

doi:10.21744/ijbem.v5n4.2038

Authors

Ni Putu Anindya Sarasija Prameswari
anindyasarasija@gmail.com
Faculty of Economics and Business, Udayana University, Bali, Indonesia
I Gusti Agung Ngurah Suaryana Faculty of Economics and Business, Udayana University, Bali, Indonesia
I Ketut Sujana Faculty of Economics and Business, Udayana University, Bali, Indonesia
Ni Ketut Rasmini Faculty of Economics and Business, Udayana University, Bali, Indonesia

Keywords:

corporate social responsibility, earnings management, financial distress, good corporate governance, managerial ability

Abstract

The purpose of this study is to empirically examine the effect of corporate social responsibility disclosure, financial distress, and managerial ability on earnings management and empirically test good corporate governance in moderating the effect of corporate social responsibility disclosure, financial distress, and managerial ability on earnings management. The population in this study are all manufacturing companies listed on the IDX in 2017-2021. The sampling method used in this study was non-probability sampling with purposive sampling technique and 70 samples were obtained. This research technique is Moderated Regression Analysis (MRA) using the SPSS program. The results of the study show that the corporate social responsibility disclosure has no significant effect on earnings management. Financial distress has a significant positive effect on earnings management, meaning that the higher the company's level of financial distress, the earnings management will increase. Managerial ability has no significant effect on earnings management. Good corporate governance is not able to moderate the corporate social responsibility disclosure on earnings management. Good corporate governance is able to weaken financial distress in earnings management, meaning that the higher the good corporate governance, the weaker the relationship between financial distress and earnings management.

Downloads

Download data is not yet available.

References

Aksak, E. O., Ferguson, M. A., & Duman, S. A. (2016). Corporate social responsibility and CSR fit as predictors of corporate reputation: A global perspective. Public Relations Review, 42(1), 79-81. https://doi.org/10.1016/j.pubrev.2015.11.004

Alexander, N., & Palupi, A. (2020). Pengaruh Corporate Social Responsibility Reporting Terhadap Manajemen Laba. Jurnal Bisnis Dan Akuntansi, 22(1), 105–112.

Ardiani, N. L. N., & Sudana, I. P. (2018). Pengaruh Corporate Social Responsibility Pada Manajemen Laba. E-Jurnal Akuntansi, 24(3), 2333-2359.

Buertey, S., Sun, E. J., Lee, J. S., & Hwang, J. (2020). Corporate social responsibility and earnings management: The moderating effect of corporate governance mechanisms. Corporate Social Responsibility and Environmental Management, 27(1), 256–271.

Cornaggia, K. J., Krishnan, G. V., & Wang, C. (2017). Managerial ability and credit ratings. Contemporary Accounting Research, 34(4), 2094-2122.

Dechow, P. M., Hutton, A. P., Kim, J. H., & Sloan, R. G. (2012). Detecting earnings management: A new approach. Journal of accounting research, 50(2), 275-334.

Dimitropoulos, P. E. (2022). Corporate social responsibility and earnings management in the EU: a panel data analysis approach. Social Responsibility Journal, 18(1), 68–84.

Dokas, I., Leontidis, C., Eriotis, N., & Hazakis, K. (2021). Earnings management. An overview of the relative literature. Bulletin of Applied Economics, 8(2), 25-55.

Falck, O., & Heblich, S. (2007). Corporate social responsibility: Doing well by doing good. Business horizons, 50(3), 247-254. https://doi.org/10.1016/j.bushor.2006.12.002

García?Sánchez, I. M., Hussain, N., Khan, S. A., & Martínez?Ferrero, J. (2020). Managerial entrenchment, corporate social responsibility, and earnings management. Corporate Social Responsibility and Environmental Management, 27(4), 1818-1833.

Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of management review, 9(2), 193-206.

Handayani, M., & Hariyani, D. S. (2019, September). Analisa Pengaruh Financial Distress Terhadap Earnings Management (Studi Pada Perusahaan Manufaktur yang Terdaftar di BEI Tahun 2014-2017). In SIMBA: Seminar Inovasi Manajemen, Bisnis, dan Akuntansi (Vol. 1).

Hapsoro, D., & Hartomo, A. B. (2016). Keberadaan Corporate Governance Sebagai Variabel Moderasi Pengaruh Financial Distress Terhadap Earnings Management. Jurnal Ekonomi Dan Bisnis, 19(1), 91.

Henryawan, E. (2018). Pengaruh Good Corporate Governance Sebagai Pemoderasi Kecakapan Manajerial Terhadap Manajemen Laba. Jurnal Ilmu Dan Riset Akuntansi, 7(9), 1–20.

Hickman, L. E., Iyer, S. R., & Jadiyappa, N. (2021). The effect of voluntary and mandatory corporate social responsibility on earnings management: Evidence from India and the 2% rule. Emerging Markets Review, 46, 100750. https://doi.org/10.1016/j.ememar.2020.100750

Hidah, M., & Sedana, I. B. P. (2021). The role of corporate social responsibility and earning management in mediation of the effect of corporate governance on corporate performance. International Research Journal of Management, IT and Social Sciences, 8(5), 322-332.

Huang, X. S., & Sun, L. (2017). Managerial ability and real earnings management. Advances in accounting, 39, 91-104. https://doi.org/10.1016/j.adiac.2017.08.003

Irawan, S., & Apriwenni, P. (2021). Pengaruh Free Cash Flow, Financial Distress, Dan Investment Opportunity Set Terhadap Manajemen Laba. Jurnal Akuntansi Bisnis, 14(1), 24–37.

Istiqomah, I., & Fitriana, V. E. (2018). Pengaruh Kecakapan Manajerial Dan Kinerja Keuangan Terhadap Manajemen Laba. JRAK: Jurnal Riset Akuntansi Dan Komputerisasi Akuntansi, 9(2), 204–221.

Kim, S. H., Udawatte, P., & Yin, J. (2019). The effects of corporate social responsibility on real and accrual?based earnings management: Evidence from China. Australian Accounting Review, 29(3), 580-594.

Kinasih, H. W., Oktafiyani, M., & Yovita, L. (2018). Keterkaitan Antara Corporate Social Responsibility Terhadap Manajemen Laba?: Sebuah Perspektif Teori Agency. Jurnal Penelitan Ekonomi Dan Bisnis, 3(2), 101–109.

Kjærland, F., Haugdal, A. T., Søndergaard, A., & Vågslid, A. (2020). Corporate governance and earnings management in a Nordic perspective: Evidence from the Oslo stock exchange. Journal of Risk and Financial Management, 13(11), 256.

Kodriyah, K., & Putri, R. F. (2019). Pengaruh Perencanaan Pajak Dan Kecakapan Manajerial Terhadap Manajemen Laba. Jurnal Akuntansi?: Kajian Ilmiah Akuntansi (JAK), 6(1), 55.

Kristyaningsih, P., Hariyani, D. S., & Sudrajat, M. A. (2021). Financial Distress Terhadap Manajemen Laba. Business Innovation and Entrepreneurship Journal, 3(3), 151–156.

Li, Y., Li, X., Xiang, E., & Geri Djajadikerta, H. (2020). Financial distress, internal control, and earnings management: Evidence from China. Journal of Contemporary Accounting and Economics, 16(3), 100210.

Lindawati, A. S. L., & Puspita, M. E. (2015). Corporate Social Responsibility: Implikasi Stakeholder dan Legitimacy Gap dalam Peningkatan Kinerja Perusahaan. Jurnal Akuntansi Multiparadigma, 157–174.

Liu, H., & Lee, H. A. (2019). The effect of corporate social responsibility on earnings management and tax avoidance in Chinese listed companies. International Journal of Accounting and Information Management, 27(4), 632–652.

López-González, E., Martínez-Ferrero, J., & García-Meca, E. (2019). Does corporate social responsibility affect earnings management? Evidence from family firms. Revista de Contabilidad-Spanish Accounting Review, 22(2), 233–247.

Lozano, M. B., Martínez, B., & Pindado, J. (2016). Corporate governance, ownership and firm value: Drivers of ownership as a good corporate governance mechanism. International Business Review, 25(6), 1333-1343. https://doi.org/10.1016/j.ibusrev.2016.04.005

Luthan, E., & Satria, I. (2016). The effect of good corporate governance mechanism to earnings management before and after IFRS Convergence. Procedia-Social and Behavioral Sciences, 219, 465-471. https://doi.org/10.1016/j.sbspro.2016.05.021

Majid, M., Lysandra, S., Masri, I., & Azizah, W. (2020). Pengaruh kecakapan manajerial terhadap manajemen laba akrual dan riil. Jurnal Ilmiah Akuntansi dan Manajemen, 16(1).

Manossoh, H. (2016). Good Corporate Governance Untuk Meningkatkan Kualitas Laporan Keuangan. In PT Norlive Kharisma Indonesia?: Bandung ISBN: 978-602-73706-6-1.

Marjono, C. C., & Wijaya, H. (2022). Pengaruh Masa Jabatan CEO terhadap Manajemen Laba Akrual. Nominal: Barometer Riset Akuntansi Dan Manajemen, 11(1), 57–78.

Muljono, D. R., & Suk, K. S. (2018). Impacts of financial distress on real and accrual earnings management. Jurnal Akuntansi, 22(2), 222.

Nasution, F. A., & Nengzih, N. (2020). The Influence of Good Corporate Governance, Earning Per Share, and the Characteristisc of the Company on Earnings Management (Case Study at Banking go public Companies Listed on Indonesia Stock Exchange 2015 – 2018). Saudi Journal of Business and Management Studies, 5(7), 406–417.

Nurdiansyah, A., & Ferdiansyah. (2021). Pengaruh Financial Distress Terhadap Tax Avoidance. Jurnal Sains Manajemen Dan Akuntansi.

Oskouei, Z. H., & Sureshjani, Z. H. (2021). Studying the relationship between managerial ability and real earnings management in economic and financial crisis conditions. International Journal of Finance and Economics, 26(3), 4574–4589.

Pakawaru, M. I., Mayapada, A. G., Afdalia, N., Tanra, A. A. M., & Afdhal, M. (2021). The Relationship of Corporate Social Responsibility (CSR) Disclosure and Earnings Management: Evidence from Indonesia. Journal of Asian Finance, Economics and Business, 8(2), 903–909.

Palacios-Manzano, M., Gras-Gil, E., & Santos-Jaen, J. M. (2021). Corporate social responsibility and its effect on earnings management: an empirical research on Spanish firms. Total Quality Management and Business Excellence, 32(7–8), 921–937.

Panda, B., & Leepsa, N. M. (2017). Agency theory: Review of theory and evidence on problems and perspectives. Indian Journal of Corporate Governance, 10(1), 74–95.

Pradnyawati, S. O., Kepramareni, P., & Masyi, K. (2021). Manajemen Laba Dan Analisis Faktor Yang Mempengaruhinya. Jurnal Ilmiah Akuntansi Dan Bisnis, 6(1), 10–23.

Puri, A. R., & Gayatri, G. (2018). Good Corporate Governance Memoderasi Pengaruh Financial Distress Terhadap Manajemen Laba. E-Jurnal Akuntansi, 2018(1), 489–512.

Putri, E. A., & Rusmanto, T. (2019). The impact of CEO characteristics on earnings per share and earnings management. International Journal of Scientific and Technology Research, 8(10), 925–929.

Putri, Y. K. W., & Sujana, I. K. (2018). The influence of bid-ask spread and leverage on earnings management with good corporate governance as moderating variable. International Research Journal of Management, IT and Social Sciences, 5(3), 8-21.

Risk, D., Konservatisme, D. A. N., Earnings, T., Dalam, T., & Periode, I. (2018). Management Dan Earnings Response Coefficient Dengan Good Corporate Governance Sebagai Variabel Moderating Pada Perusahaan Manufaktur Yang Moderating.

Rodriguez-Fernandez, M. (2016). Social responsibility and financial performance: The role of good corporate governance. BRQ Business Research Quarterly, 19(2), 137-151. https://doi.org/10.1016/j.brq.2015.08.001

Ruangviset, J., Jiraporn, P., & Kim, J. C. (2014). How does corporate governance influence corporate social responsibility?. Procedia-Social and Behavioral Sciences, 143, 1055-1057. https://doi.org/10.1016/j.sbspro.2014.07.554

Rusci, V. A., Santosa, S., & Fitriana, V. E. (2021). Financial Distress And Earnings Management In Indonesia: The Role Of Independent Commissioners. JIAFE (Jurnal Ilmiah Akuntansi Fakultas Ekonomi), 7(1), 89-104.

Rusydi, A. R., Palutturi, S., Noor, N. B., & Pasinringi, S. A. (2020). The implementation of good corporate governance (GCG) at public hospital in Indonesia: A literature review. Enfermeria clinica, 30, 145-148. https://doi.org/10.1016/j.enfcli.2019.10.057

Ruwanti, G., Chandrarin, G., & Assih, P. (2019). Corporate social responsibility and earnings management: The role of corporate governance. Humanities & Social Sciences Reviews, 7(5), 1338-1347.

Saputri, M. S. (2021). Pengaruh Jenis Kelamin, Usia Dan Tenure Ceo (Chief Executive Officers) Terhadap Praktik Manajemen Laba. Jurnal Akuntansi AKUNESA, 10(1), 81–91.

Selviani, H. (2017). Manipulasi laba: analisis faktor tekanan dan peluang. In Repository.Uinjkt.Ac.Id.

Sen, S., Du, S., & Bhattacharya, C. B. (2016). Corporate social responsibility: A consumer psychology perspective. Current Opinion in Psychology, 10, 70-75. https://doi.org/10.1016/j.copsyc.2015.12.014

Setiawan, D., Prabowo, R., Arnita, V., & Wibawa, A. (2019). Does corporate social responsibility affect earnings management? Evidence from the Indonesian banking industry. Business: Theory and Practice, 20, 372–378.

Solikhah, I. (2022). Pengaruh Pengungkapan Corporate Social Responsibility (CSR) Terhadap Profitabilitas dan Manajemen Laba (Studi Empiris Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia (BEI) Tahun 2015-2017). Jurnal Akuntansi AKUNESA

Subroto, B. (2014). Pengungkapan Wajib Perusahaan Publik: Kajian Teori dan Empiris. Universitas Brawijaya Press: Malang.

Sucipto, H., & Zulfa, U. (2021). Pengaruh Good Corporate Governance, Financial Distress, dan Ukuran Perusahaan Terhadap Manajemen Laba. JAD: Jurnal Riset Akuntansi Dan Keuangan Dewantara, 4(1), 13–22.

Sugiyono. (2018). Metode Penelitian Bisnis: Pendekatan Kuantitatif, Kualitatif, Kombinasi, dan R&D. Alfabeta: Bandung.

Sumardi, & Wati, E. (2022). Pengaruh Karakteristik Ceo Dan Hubungan Politik Terhadap Manajemen Laba Riil. Jurnal Ilmiah Akuntansi Dan Keuangan, 4(3), 1288–1303.

Susilowati, F., & Harsono, M. (2020). Implikasi Corporate Social Responsibility Dalam Good Corporate Governance Untuk Mengurangi Konflik Keagenan. Akmenika: Jurnal Akuntansi Dan Manajemen, 17(1).

Tangke, P. (2021). Managerial Capability and Foreign Ownership: Mechanisms for Increasing Company Value. ATESTASI?: Jurnal Ilmiah Akuntansi, 4(2), 175–189.

Tannaya, C. I. N., & Lasdi, L. (2021). Pengaruh Financial Distress Terhadap Manajemen Laba Dengan Moderasi Corporate Governance. Jurnal Ilmiah Mahasiswa Akuntansi, 10(1), 31–40.

Tsaqif, B. M., & Agustiningsih, W. (2021). Pengaruh Financial Distress dan Ukuran Perusahaan Terhadap Manajemen Laba dengan Kepemilikan Manajerial sebagai Variabel Moderasi. Jurnal Akuntansi Dan Governance, 2(1), 53.

Urquiza, F. B., Navarro, M. C. A., Trombetta, M., & Lara, J. M. G. (2010). Disclosure theories and disclosure measures. Revista Espanola de Financiacion y Contabilidad, 39(147), 393–420.

Wahidahwati, W., & Ardini, L. (2021). Corporate governance and environmental performance: How they affect firm value. The Journal of Asian Finance, Economics and Business, 8(2), 953-962.