Influence of Financial Targets, Political Connections, Institutional Ownership, and Going Concern on Earnings Management

Abstract

The purpose of this study was to determine and analyze the effect of the financial target, political connection, institutional ownership, and going concerned on the possibility of earnings management practices. The independent variables in this study are the financial target, political connection, institutional ownership, and going concern, while the dependent variable in this study is the possibility of earnings management practices. This study measures the possibility of earnings management practices using the MSCORE model. This study uses as many as 62 samples of manufacturing companies listed on the Indonesia Stock Exchange in the period 2019 to 2021, so the total sample is 186 samples. The data is collected from the annual reports This study aimed to determine and analyze the effect of the financial target, political connection, and institutional ownership, and are researched on the Indonesia Stock Exchange website. The sampling technique used is the purposive sampling technique and the analysis used is binary logistic regression using the Eviews 12. The results show that political connection, institutional ownership, and going concern will hurt the possibility of earnings management practices. Meanwhile, financial targets do not affect the possibility of earnings management practices.