The Effect of Corporate Social Responsibility On Earnings Management With Leverage As The Control Variable: Manufacturing Firms In The Indonesian Stock Exchange

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 7

Year of Publication : 2020

Authors : Putu Eva Julianawati, I Gusti Bagus Wiksuana

10.14445/23939125/IJEMS-V7I7P103

How to Cite?

Putu Eva Julianawati, I Gusti Bagus Wiksuana, "The Effect of Corporate Social Responsibility On Earnings Management With Leverage As The Control Variable: Manufacturing Firms In The Indonesian Stock Exchange," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 7, pp. 10-17, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I7P103

Abstract:

The purpose of this study is to analyze and examine the influence of corporate social responsibility (CSR) on earnings management. CSR disclosure was measured using the Corporate Social Responsibility Index (CSRI), which is based on the instrument used by Global Reporting Initiative (GRI), while earnings management was measured using Modified Jones Discretionary Accruals (DA) model. There are three controlling variables included in this study, namely size, leverage, and profitability. The population in this study are the firms in the manufacturing industry listed on the Indonesian Stock Exchange in 2018, with a total of 164 firms. The total number of samples is 143 firms, selected using the purposive sampling method. The data collection method used was the non-participant observation method. The data were analyzed using the multiple regression analysis, while the analysis tool used is the Ordinary Least Square (OLS) regression. The analysis results showed that CSR has a negative and significant influence on earnings management, and leverage is able to become a significant controlling variable in the influence of CSR on Earnings Management. Meanwhile, size and profitability are not significant controlling variables in the influence of CSR on Earnings Management.

Keywords:

Corporate Social Responsibility, earnings management, size, leverage, profitability.

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