FIRM SIZE, LEVERAGE, PROFITABILITAS, FREE CASH FLOW, GOOD CORPORATE GOVERNANCE DAN EARNING MANAGEMENT: STUDI PADA PERUSAHAAN SEKTOR INFRASTRUKTUR DAN TRANSPORTASI DI INDONESIA

Abstract

This study aims to provide empirical evidence the influence of firm size, leverage, profitabilitas, free cash flow, good corporate governance on earning management. good corporate governance is proxied by IBCG modified and earning management is proxied by Discretionary Accruals. The sample used in this research consist of 30 infrastructure, and transportation companies are listed on the Indonesia stock exchange during 2012 until 2017 by purposive sampling method. Multiple linear regression analysis was used as an analytical technique in this study. The results showed that firm size, free cash flow and profitability have effect on earning management, leverage and GCG is proxied by IBCG modified have not effect on earning management. The leverage is not effect because the large amount of company’s debt must be paid and the practice of earning management is not able to avoid it. While, the good corporate governance is not effect because practice of earning management that still occur despite implementing GCG. The implication of GCG principles are only to compliance existing regulations and sunctions (regulation driven), not as an ethics driven and consider principles as a part of corporate culture.