Board diversity and earning management in companies listed in Indonesian stock exchange

Wicaksana, Ketut Arya Bayu and Yuniasih, N W and Handayani, Luh Nyoman Chandra (2017) Board diversity and earning management in companies listed in Indonesian stock exchange. International Journal of Scientific and Research Publications, 7 (12). pp. 382-386. ISSN 2250-3153

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Abstract

This research aims to explore the relation between company’s board diversity and earning management in Indonesian Listed Companies. As independent variable, board diversity measured by index of variation of the diversity of gender, nationality, age, and educational background. While as dependent variable, earning management measured by discretionary accruals. This research also used company’s size and type of industry as controlling variable. Data collected from Indonesian Stocks Exchange (IDX) for the past 6 years using purposive sampling method producing 298 observations, then analyzed using multiple linear regressions. The result of the research shows that board diversity have negative effect on earning management, means the higher board diversity, the lower earning management. Other finding suggested that both industrial type and company’s size does not affect earning management. Therefore it is hope that this result can be used as a consideration to maximize the company good corporate governance practice

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