Abstract
The purpose of this study is to test and find the influence of information asymmetry on earnings management with good corporate governance as moderating variable in banking sector companies listed on the Indonesia Stock Exchange (IDX)) in 20102014. Earnings management variable was measured using the approach of Beaver and Engel (1996), information asymmetry variable was measured using the approach of bid-ask spread, and good corporate governance (GCG) variable was measured using GCG self-assessment. The research type used was quantitative research using secondary data. The population in this study was all banking sector companies listed on the IDX in 2010-2014. The number of samples was 15 banking companies taken from the total of 41 banking companies. Sampling technique was conducted using documentation. Methods of analysis used in this study were simple linear regression analysis and moderated regression analysis. The results of this study show that information asymmetry has a significant influence on earnings management, and GCG moderates the influence of information asymmetry on earnings management.
Highlights
Financial statement is a means of accounting for the manager to use the owner's resources
The significance value of information asymmetry (IA) is < 0.05, which means that information asymmetry has a significant influence on earnings management
H0 is rejected and H1 is accepted, indicating that information asymmetry has an influence on earnings management
Summary
Financial statement is a means of accounting for the manager to use the owner's resources. Accrual basis is chosen for preparing the financial statement because it is more rational and fair in reflecting the company's real financial condition. Accrual basis can provide flexibility to the management in choosing an accounting method as long as it does not deviate from the applicable financial accounting standards. The companies always choose the accounting method in accordance with the conditions. This accounting method chosen deliberately by the management for a particular purpose is known as earn-. The management is required to provide information about the company's condition to the owner
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