The Effect of Bonus Plan and Income Smoothing on the Selection of Accounting Policy with Corporate Governance as Moderating Variable: An Evidence in Indonesia

Abstract

This study aimed to examine the effect of the bonus plan and income smoothing on the selection of accounting policies. It is also purposed to observe the role of corporate governance to bonus plan and income smoothing as well as to the decision of accounting policies. Logistic regression method was used to processed data from manufacturing companies listed on the Indonesian Stock Exchange in the period 2013-2015 which chosen by purposive sampling scheme. The results showed that bonus plan has no effect on the selection of accounting policies while income smoothing influencing how an accounting policies chosen. Furthermore, corporate governance as a moderating variable has given the impact on bonus plan for the accounting policies choice but not affecting the relationship between income smoothing with the selection of accounting policies.

Keywords: bonus plan, income smoothing, corporate governance, accounting policy