Effects of Information Asymmetry, Leverage, Audit Tenure and Managerial Ownership of Earnings Management with Profitability as a Moderating Variable in the Mining Companies Listed on the Indonesia Stock Exchange

Abstract

The research aims to determine whether information asymmetry, leverage, audit tenure, and managerial ownership affect earnings management in the mining companies listed on IDX (Indonesia Stock Exchange) and to reveal whether profitability can be used as a moderating variable in the research model. The research employs the associative casual method and takes nine mining companies listed on IDX from 2013 to 2020 as the sample by using a purposive sampling technique, with a total of 72 observation data. The gathered data are analysed by using panel data regression analysis with E-Views software. The research results demonstrate that information asymmetry has positive yet insignificant effects on earnings management and audit tenure, and managerial ownership has a positive and significant impact on earnings management. Meanwhile, leverage has negative and significant effects on earnings management. It is also found that profitability can only moderate the effects of leverage on earnings management while the other independent variables are not. Keywords: information asymmetry, leverage, audit tenure, managerial ownership, earnings management