Abstract
This study aims to examine the effect of investment opportunity set, company characteristics and board of commissioners on earnings quality with intervening variable earnings persistence. The population is manufacturing companies listed on the Indonesia Stock Exchange (IDX) in the 2015-2017 periods which consist of 156 companies. The research sample of 66 companies was obtained using purposive sampling method, so that a total of 198 units of analysis were obtained. Of the total unit analysis, outlier data was reduced by 85 data then the final total unit of analysis is 113 data. This study uses descriptive statistical analysis technique and path analysis. The results shows that IOS, board of commissioners and earnings persistence do not affect the earnings quality. Liquidity and capital structure have a significant negative effect on earnings quality. The board of commissioners does not affect the earnings persistence. The Sobel Test results show that earnings persistence is not able to mediate the influence of the board of commissioners on earnings quality. The conclusion of the study is liquidity and capital structure have a significant negative effect on earnings quality. This is a negative signal because management is considered unable to maintain the stability of the company’s condition.
Highlights
Financial statements are prepared and published for the benefit of the company’s external parties
This study aims to examine the effect of investment opportunity set, company characteristics and board of commissioners on earnings quality with intervening variable earnings persistence
The results shows that Investment opportunity set (IOS), board of commissioners and earnings persistence do not affect the earnings quality
Summary
Financial statements are prepared and published for the benefit of the company’s external parties. The phenomenon results in a variety of other factors that affect investors in the response to information published by the company This makes quality is attractive to be reviewed again. The purpose of the study is to empirically examine the influence of IOS, the characteristics of the company’s board of commissioners on quality of life with variable intervening persistence. The originality of research is to present earnings persistence as an intervening variable to mediate the influence of the board of commissioners on the earnings qualitys. The presence of intervening variables is based on previous research which still has a weak influence between board of commissioners as an independent variable on earnings quality as the dependent variable, including Yushita et al (2013) with the result of 0.036 and Oktaviani et al (2015) with the result of 0.053. The results of the research by Warianto & Rusiti (2014), Siahaan (2013), and Sadiah & Priyadi (2015) show that investment opportunity sets have a positive effect on earnings quality
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