The Role of Corporate Diversification, Capital Structure Determinant, And Structure of Ownership on Earning Management with Information Asymmetry as Moderating Variable

Abstract

Along with the development of the economy and technology, companies are expanding their businesses to be able to defend in the competition in the industry by diversification. In the diversified companies with high complexity, manager's motivation to use various earnings management techniques is increase. Apart from diversification, there are various factors that influence earnings management, including capital structure and ownership, and also information asymmetry. The major objective of this study was to discusses a comprehensive understanding of earnings management and the factors that influence it, namely business diversification, capital structure, ownership structure, and information asymmetry; and second is to empirically investigate the effect of diversification, capital structure, ownership structure and asymmetry of information to earnings management, and to clarify whether information asymmetry can moderate the influence of the three other factors on earnings management as measured by the approach of Stubben (2010). The study used the Total Asset control, Growth Opportunity, ROA, ROE, and Leverage. Data obtained from observations 165 Financial Statements of Manufacturing Companies in the chemical, pharmaceutical, and consumer goods sectors in 2015-2017. These results indicate that diversification does not relation with earnings management, but the other three factors namely capital structure, ownership structure, and information asymmetry are proven to significantly affect earnings management. Information asymmetry variables can moderate the affect of capital structure and ownership structure on earnings management.

Kepemilikan Institusional, Leverage Dan Faktor Lainnya Terhadap Manajemen Laba

“…Menurut Singal dan Putra (2019), kepemilikan institusional merupakan kepemilikan saham perusahaan yang dimiliki oleh suatu lembaga atau institusi seperti perusahaan investasi, perusahaan asuransi, aset managemen, bank, dan kepemilikan institusi lainnya. Investor institusional dinilai memiliki kemampuan dan sumber daya yang lebih lengkap dalam mengolah informasi dibandingkan investor individual (Sofia dan Murwaningsari 2019). Sehingga pengawasan dari investor institusional terhadap perusahaan akan lebih ketat dan optimal (Pradipta 2019).…”

Analysis of Financial Performance of Pdams Affected By Environmental Performance and Environmental Accounting with Agency Cost Mediation

“…In addition to stewardship theory, the relationship between company owners and managers is discussed in agency theory (Aprianingsih, 2016;Kovermann & Velte, 2019;Sofia, 2019;Varela, 2017). In agency theory, agency relationship arises when the company owner employs and delegates his authority to someone (agent) in managing the company (Aprianingsih, 2016).…”

Untitled

“…With this condition, agents do not try to maximize company profits and agents try to take advantage of the burden borne by shareholders, in the form of increased wealth and satisfaction and company facilities, including manipulating the company's financial statements to get prizes or bonuses that are calculated based on achieving financial numbers that are presented in the Financial Statements. Agency theory wants to solve problems arising from agency relationships, namely when shareholders cannot know for certain whether agents have acted appropriately, and when shareholders have a different view of riskrelated agents (Kovermann & Velte, 2019;Sofia, 2019). Agency theory stipulates that opposing interests of shareholders (principals) and managers (agents) can trigger conflicts and will disrupt the smooth running of the company (Rodriguez-Fernandez, 2016).…”