The Effect of Tax Avoidance, Profitability, Independent Commissioners, and Audit Committee on Real Earnings Management: Evidence from Indonesian Manufacturing Companies
Abstract
Real earnings management reduces earnings quality and the reliability of financial reporting. This study examines the effect of tax avoidance, profitability, independent commissioners, and audit committee on real earnings management in manufacturing companies listed on the Indonesia Stock Exchange during 2020–2024. Using a quantitative approach, this study analyzes secondary data from 61 companies (305 firm-year observations) selected through purposive sampling and employs multiple linear regression analysis. The results show that profitability has a positive and significant effect on real earnings management, whereas tax avoidance, independent commissioners, and audit committee have no significant effect. Simultaneously, all independent variables significantly influence real earnings management. These findings support Agency Theory, indicating that profitability remains the primary driver of managerial earnings management, while corporate governance mechanisms have not effectively constrained such practices. This study provides empirical evidence on the determinants of real earnings management in Indonesian manufacturing companies.
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EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
