There are two sectors of banks operating in Indonesia, namely Sharia banks and conventional banks. Improving performance is important in maintaining public confidence in the bank. Efficiency is one of the parameters to measure the performance of Sharia banks. This study measures the comparative level of technical efficiency of Sharia commercial banks and conventional banks by Stochastic Frontier Analysis method during 2011–2015 period by using 10 samples of Sharia commercial banks and conventional banks. Input variables in this study are total deposits, operational costs, and other operational costs. Total financing is an output variable. The results of this study show that total deposits and operational costs have a positive and significant impact on total financing in Sharia and conventional banks. The average score of the technical efficiency of Sharia commercial banks during the period observed is 0.84 and conventional banks is 0.85.

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The main issues of researches about earnings management have been conducted extensively. Nowadays, the scope of research on earning management is extended to business fields based on Islamic finance. So this research objective is to determine the influence of value added, leverage and size on Shariah banking financial performance through earning management. Discretionary Accrual in Modified Jones Model is used in this research to measure earning management. Then, indicator Return On Asset is used in measuring shariah banking financial performance. Based on data of 12 shariah banking in Indonesia for the period 2012 to 2017, the study conduct path analysis model with Smart-PLS. After conducted the analysis test, this study provide the evidence that value added, leverage and size have no significant effect on Return On Asset. For earning management, both leverage and size have significant effect on earning management otherwise value added has no significant effect on earning management. Finally, earning management significantly act as intervening variable between leverage, size to return on asset but have insignificant result in the relationship between value added and return on asset.

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