Open AccessE EARNING MANAGEMENT: THE EFFECT OF MANAGEMENT OVERCONFIDENCE AND CORPORATE GOVERNANCE
Author(s) -
Satria Tri Nanda,
Raisya Zenita,
Neneng Salimiah,
Intan Adino
Publication year - 2022
Publication title -
jurnal ilmiah ekonomi dan bisnis
Language(s) - English
Resource type - Journals
eISSN - 2442-9813
pISSN - 1829-9822
DOI - 10.31849/jieb.v19i1.7588
Subject(s) - overconfidence effect , accounting , corporate governance , business , audit , audit committee , quality (philosophy) , quality audit , earnings management , finance , psychology , social psychology , philosophy , earnings , epistemology
Many studies have discussed the determinants of earning management. However, most of these studies discuss external factors of management such as audit quality and quality of disclosure and as a determinant of earning management. Study that tries to examine the intrinsic factors such as managerial overconfidence effect on earning management has not been widely conducted, especially in companies listed on IDX, Indonesia. This study aims to examine the effect of managerial overconfidence on earning management in companies listed on IDX. Furthermore, this study also aims to determine the moderating effect of corporate governance mechanisms on the relationship between managerial overconfidence. By using data analysis with the SEMPLS technique, the present study has succeeded to prove that managerial overconfidence affect earning management. Furthermore, this study also successfully provide evidence that corporate governance mechanisms such as independent audit committees and audit committee activities moderate the relationship between managerial overconfidence and earning management.