Effect of Corporate Governance of Earnings Management in Banking Companies Listed in Indonesia Stock Exchange) 2010-2012

Abstract

The purpose of  this study was to Determine the good corporate governance mechanisms effects as measured by managerial ownership, t he proportion of the board of Commissioners, and the use ofexternal audit  firm size on earnings management. This Sampling  using the purposive sampling to Obtain a sample of  28  banking companies listed on the Indonesia Stock Exchange in 2010 to 2012.The analysis method in this study using multiple linear regression, and Modified Jones Model 1995 is used  in Determining  the value of  discretionary accruals. Were processed using  SPSS  17.0 for Windows.The results Showed  that  the independent variables are not shown to e ffect the reduction in earnings management practices. This is Because The  implementation of good  corporate governance has not been  fully  is implemented. In addition, the application of  corporate governance  is still a new thing I n  Indonesia and  the effect  of  the application of  the  new  corporate governance  can  Be Felt  in  the long term.

Keyword:Corporate Governance, Earnings Management, Modified Jones Model