Pengaruh Leverage, Likuidity, Firm Size, Dan Investment Opportunity Set Terhadap Earning Quality

Abstract

This research aims at how the influence of leverage, liquidity, company size and investment opportunity set on earnings quality in manufacturing industries listed on the Indonesia Stock Exchange during 2017 - 2019. Sample was selected using purposive sampling method and the valid data was 76 companies. Data processing techniques using dated panel what helped by Eviews program and Microsoft Excel 2013. The results of this study indicate that leverage and firm size have a significant influence on earning quality, and liquidity and investment opportunity set don’t have a significant influence on earning quality.The implication of this study is the need to increase the accuracy of leverage, liquidity, firm size and investment opportunity set to increase earning quality of company in order to predict future cash flows and become an accurate basis for users of financial statements that make financial reports the basis for decision making.

Determinant Factors affecting Earnings Quality on Manufacturing Companies

“…Large companies will be followed by managers' efforts to improve performance and generate high earnings. This is resulting managers can still gain trust when looking for sources of income from the debt market (Noviyanti and Santioso 2022).…”

“…The greater the risk a firm is exposed to, the greater the uncertainty that generated future earnings. There is a relationship between leverage and company returns, meaning that debt can be used to predict possible earnings for investors if they invest in a company (Noviyanti and Santioso 2022).…”

“…Liquidity defines firm's expertise to meet its short-term obligations (Ginting 2017). Liquidity does not affect the quality of earnings, as it does not ensure that a company can manage its business activities properly (Noviyanti and Santioso 2022). Based on this prior research, the hypothesis is able to be formulated: H5: Liquidity has an affect on earnings quality Investment opportunity is described as the size of the investment opportunity for a company, which depends on the company's expenses on future plan.…”