PENGARUH FREE CASH FLOW, FINANCIAL DISTRESS, DAN INVESTMENT OPPORTUNITY SET TERHADAP MANAJEMEN LABA

Apriwenni, Prima (2021) PENGARUH FREE CASH FLOW, FINANCIAL DISTRESS, DAN INVESTMENT OPPORTUNITY SET TERHADAP MANAJEMEN LABA. Jurnal Akuntansi Bisnis, 14 (1). pp. 21-37. ISSN 1979-360X

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Abstract

Stakeholders pay attention to the earnings report, thus encouraging company managers to plan strategies to produce reports expected by stakeholders. Earnings management is one way that can be done. Managers can intervene the earnings management by increasing or decreasing profit in order to achieve a certain level of profit which benefits himself or the company. This study aims to determine the influence of free cash flow, financial distress, and investment opportunity set on earnings management. The research sample consisted of 11 infrastructure, utility, and transportation companies listed on the Indonesia Stock Exchange in 2014-2018 with the total sample of 55 data. This study used a purposive sampling method and was tested with SPSS 22.0 Software. The results show that the data have met the pooling test, classical assumptions and established criteria. The results of the F test show that the earnings management variable is affected simultaneously by free cash flow, financial distress, and investment opportunity set variables. The t test results show that the free cash flow and investment opportunity set have a significant positive effect on earnings management, whereas financial distress does not. In sum, there is enough evidence that free cash flow and investment opportunity set positively affect earnings management, but financial distress does not have enough evidence to influence earnings management.

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