THE EFFECT OF GOVERNANCE QUALITY AND EARNING MANAGEMENT WITH INTERNAL CONTROL AS MODERATING VARIABLE TOWARDS FIRM VALUE

Mufidah Mufidah,Masnun Masnun,Ira Febrianti

doi:10.38035/jafm.v1i2.23

Abstract

The purpose of this study is to analyze the influence of the quality of corporate governance, real earnings management on firm value and to analyze the influence of the quality of corporate governance with the internal control system as a moderating variable on firm value in companies included in the LQ 45 index 2016-2018. The data in this study used descriptive statistical analysis and inferential statistical analysis. The results showed that the Quality of Governance had no significant effect on Firm Value, Earnings Management had a significant effect on Firm Value and Internal Control could not moderate the effect of Governance Quality on Firm Value.

Highlights

The failure of large scale companies, financial scandals, and the crisis that hit various countries has increased the discourse and demands on corporate governance that have been less attention is increasing attention
AND DISCUSSION Hypothesis testing in this study is used to test the truth of the hypothesis which states that it is suspected that Corporate Governance, Earning Management have an influence on Firm Value and Internal Control as moderating variables
Outcome of this study was not consistent with research shows the behavior management of opportunistic through the management of real profit does not affect the company's financial performance and the results showed that companies listed on stock exchanges Indonesia tend to do accrual earnings management compared to real earnings management

Summary

Introduction

The failure of large scale companies, financial scandals, and the crisis that hit various countries has increased the discourse and demands on corporate governance that have been less attention is increasing attention. The government and investors have paid more attention to corporate governance practices. These events have made to realize its importance. Misuse of earnings management occurs in international companies. An example is Lucent Technology, which in the November 2000 financial statements was proven to have practiced earning management which was Available Online: http://dinastires.org/index.php/JAFM recognized by the Securities and Exchange Commission (SEC) and had to return $ 125 million in sales that were found to be incorrectly documented or fabricated

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Conclusion