EARNINGS MANAGEMENT MODEL OF MANUFACTURING COMPANIES

Abstrak

This research is intended to analyze and answer the inconsistencies in the results of previous research, as well as the phenomenon of Return on Assets (ROA) which cannot mediate the influence of exogenous variables, MO, DER, FS on Earning Management (EM). This is what prompted the researcher to conduct research again using a different time series and cross-sectional. This type of research is descriptive quantitative with multiple regression analysis method of panel data using 18 samples of manufacturing companies and for three years. This research formula is to maximize Earnings Management through ROA as an intervening variable using the research object of Manufacturing companies on the Indonesia Stock Exchange. Two research models are integrated into one and each goes through model selection test stages, Chow Test, Hausman Test, and Lagrange Multiplier Test. Results in the first model; that Frm Size can explain its effect on ROA with a positive correlation and this is in line with the applicable theory. The results of the second research model show that ROA can explain its influence on Earnings Management, but is unable to mediate the influence of exogenous variables on the endogenous variable, EM. It is hoped that these results will help with maximum results for company management and capital market players on the Indonesia Stock Exchange.