The Influence of Free Cash Flow and Debt To Equity Ratio to Earnings Management

Authors

  • Alex Nurdiana Institut STIAMI Program Studi Administrasi Publik, Legok Permai Blok B2/C5 Legok Tangerang, Banten 15820, Indonesia

DOI:

https://doi.org/10.31334/neraca.v2i2.1490

Keywords:

Earning Management, Free Cash Flow, Debt to Equity Ratio, Leverage, Age, Gross Margin

Abstract

The separation functions between management and stockholders can create the opportunities to   do earnings management. This study aimed to analyze the influence of free cash flow and debt to equity ratio to earnings management.   This type of research is a causal research, which aims to test the hypothesis about the effect of an independent variable on the dependent variable.   The research method is quantitative research.   Samples are 83 companies listed in the Indonesia Stock Exchange (BEI) 2011-2013. The sampling method is purposive random sampling.   The results of this study stated that free cash flow has negative effect on earnings management. Debt to equity ratio has no effect to earnings management. Leverage has positive effect on earnings management. Age of Companies has no effect on earnings management. Gross margin has no effect on earnings management. The coefficient of determination obtained from the results of this study indicate that the independent variables can explain the dependent variable of 10.2%, while the remaining 89.8% is influenced by other variables not examined in this study.

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Published

2021-04-30

Issue

Vol. 2 No. 2: April 2021

Section

Articles

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