ANALISIS PENGARUH GOOD CORPORATE GOVERNANCE, FREE CASH FLOW, DAN LEVERAGE TERHADAP MANAJEMEN LABA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BEI

Abstract

This research aims to examine the influence of corporate governance, free cash flow, and leverage on earnings management. Good corporate governance is measured by size of audit committee, size of board of directors, board of independent commissioner proportion, institutional ownership proportion, and managerial ownership proportion. Discretionary accrual is used as a proxy for earnings management. The sample size used in this research is 71 manufacturing companies listed in Indonesia Stock Exchange, selected by purposive sampling during the research period 2009 - 2013. Data is analyzed using multiple regression. The results show that all of corporate governance components (size of audit committee, size of board of directors, board of independent commissioner proportion, institutional ownership proportion, and managerial ownership proportion) and leverage have no significant influence, while free cash flow has negative and significant influence to earnings management. This result indicates that high free cash flow will reduce earnings management practice.