Analysis of Factors Affecting the Motivation of Earnings Management in Manufacturing Listed in Indonesia Stock Exchange

Abstract

This study aimed to analyse the factors that affect the motivation for the management of earnings management activities in the automotive sector manufacturing companies and component 2011-2013. Some of the factors that affect earnings management motivation used in this study is a bonus motivation, motivation debt contracts, and motivation political costs (the size of the company). Source of data used in this study is empirical data obtained from Indonesian capital market consists of the annual financial statement data and other supporting data. The sample of this study consisted of 12 companies manufacturing automotive sector and components that publish annual financial statements for 2011-2013. Analysis of the data using the modified Jones models and is equipped with a descriptive analysis, the classical assumption test, and test hypotheses. The results of this study show that (1) the partial methods, motivation bonus (ROA) but no significant negative effect on earnings management. Motivation debt (leverage) has a positive effect and no significant effect on earnings management. Meanwhile, the cost of political motivation (the size of the company) has a positive but not significant effect on earnings management. (2) Simultaneously, motivation bonus (ROA), motivation debt (leverage) and the motivation of the political cost (size of the company) has a positive and significant impact of earnings management.

Keywords: Earnings Management, Motivation Bonus, Debt Contracts Motivation, Motivation Company Size