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ISSN : 2456-3676

Title:
RELATION BETWEEN ASYMMETRIC INFORMATION, CORPORATE GOVERNANCE AND EARNING MANAGEMENT EVIDENCE FROM INDONESIA

Authors:
Annisa Nurfitriana, Winwin Yadiati, Indonosia

Abstract:
Purpose-This paper aims to examine the influence of asymmetric information and corporate governance on earnings management for a sample of banks listed on Indonesian stock exchange. Design/methodology/approach-A regression analysis model is use to determine the impact of asymmetric information and corporate governance on earning management. Cash and securities ratio and capital ratio are use as proxy of asymmetric information. 37 banks out of the 41 listed at the Indonesian Stock Exchange were analyzed from 2013 to 2014. Findings-Results confirm that cash and securities ratio has a significant and negative influence onearnings management while capital ratio has a significant and positive influence on earnings management.The independency of a board of commissioners doesn`t have a significant and negative influence on earnings management, the size of a board of commissioners doesn`t have a significant influence on earnings management, and finally audit committee doesn`t have a significant influence on earnings management as well. Simultaneous, results confirm that cash and securities ratio, capital ratio, independency of a board of commissioners, size of a board commissioners and audit committee have a significant and positive influence on earnings management.

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