Attention Profitability, Leverage, Managerial Ownership and Firm Size Effect on Big Bath Accounting

Abstract

This research examines the impact of big bath accounting on profitability, leverage, managerial ownership, and firm size. The study used thirty-three firms published on Indonesia Stock Exchange from 2016 to 2020 with 165 observational data. The pattern was analyzed using a logistic regression pattern of variable relationships with SPSS Version 26 software. The result indicates that profitability and leverage significantly influence big bath's accounting treatment so that managers will tend to consider doing big bath accounting at an unfavorable level of profitability and leverage. However, managerial ownership and firm size have no significant impact on big bath accounting. Managers will not continue undertaking extensive bath accounting to maintain the firm's impression among the public. Next research could enhance sample firms and the number of observation periods. Subsequent analysis should find a dependent variable that is not binomial or dichotomy better to reflect the recognition of big bath accounting in firms. The research give suggestions for investor to predict indication of big bath accounting in mining firm at Indonesian Stock Exchange. Keywords: Profitability, Leverage, Managerial Ownership DOI: 10.7176/RJFA/14-4-03 Publication date: February 28 th 2023