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IJSTR >> Volume 9 - Issue 1, January 2020 Edition

International Journal of Scientific & Technology Research  
International Journal of Scientific & Technology Research

Website: http://www.ijstr.org

ISSN 2277-8616

The Role Of Corporate Governance On Earnings Quality From Positive Accounting Theory Framework

[Full Text]



Dian Saksessia Amrie Firmansyah*



Bonuses, Debt Covenant, Tax Avoidance, Corporate Governance



This study aims to examine the effect of bonuses, debt financing, tax avoidance and corporate governance on earnings quality as well as the role of corporate governance on the effect of bonuses, debt financing, tax avoidance on earnings quality. This research is quantitative research with multiple linear regression models. The sample used in this research is all nonfinancial companies listed on the Indonesia Stock Exchange (IDX). The type of data used in this study is secondary data in the form of financial statements and annual reports from 2012 to 2016. The sample selection using a purposive sampling method with the number of samples amounted to 344 observations. This study uses data with the same number of five years, so that this study employs panel data. This study suggests bonuses are negatively associated with earnings quality. This manager's opportunistic behavior is in line with the hypothesis plan bonus. Debt financing is positively associated with earnings quality. Tax avoidance is negatively associated with earnings quality. Corporate governance is not associated with earnings quality. Corporate governance is expected to be the company's control mechanism to reduce earnings management behavior, which can reduce earnings quality. Corporate governance does not weaken the influence of bonuses on earnings quality. The previous discussion has confirmed that corporate governance does not affect the quality of earnings, and after research, corporate governance is also unable to limit the opportunistic behavior of managers driven by bonus motivation. Corporate governance does not weaken the influence of debt financing on earnings quality. Corporate governance does not weaken the effect of tax avoidance on the quality of earnings. In line with the previous discussion, this result may suggest in Indonesia; corporate governance has not been considered as a need and corporate culture.



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