The Affecting Factors Of Earnings Management In Mining Companies Listed On In donesia Stock Exchange

Abstract

This research purpose is to analyze the effect of leverage, free cash flow, and firm size on earnings management ofmining companies listed on Indonesia Stock Exchange 2010-2014.Earnings management is managerial activity to intervene infinancial statements to generate the desired profit level in income statement. This study uses discretionary accruals as a proxyfor earnings management, and Jones Model was used for calculation of discretionary accruals.The population in this study is all mining companies registeredin Indonesia Stock Exchange period of 2010-2014. Thesamples used are selected usingpurposive sampling method. Datawere analyzed using panel data regression analysis.The results of study showed that leverage, free cash flow, andfirm size have a significant effect on earningsmanagement simultaneously. In partial variable firm size have asignificant effect on earnings management with a positivedirection. While variable leverage and free cash flow have no significant effect on earnings management.