THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE, LEVERAGE, AND FREE CASH FLOW ON EARNINGS MANAGEMENT
Abstract
This study aims to determine the effect of CSR Disclosure, Leverage, and Free Cash Flow on profit management. The population in this study was manufacturing companies in the food and beverage sector which were listed on the Indonesia Stock Exchange (BEI) in the 2016-2018 period. Sampling was carried out using a purposive sampling method, and the number of samples used in the study was 26 data of food companies and drinks. Based on the results of research and data analysis using SPSS shows that: (1) CSR disclosure does not affect earnings management, (2) Leverage does not affect earnings management, and (3) Free cash flow does not affect earnings management. The results of this study imply that CSR disclosure is not the only indicator that is considered by investors. Investors may pay more attention to the company's prospects in the future along with the performance of the company. It is expected that companies can pay more attention to social responsibility as an effort to establish policies in promoting a balance between company profits and the benefits of society as a whole. Besides, in conditions where leverage and free cash flow are high, managers do not always think to undertake earning management to overcome the problems. Managers may consider the reversal impact after the earning management which may give a more negative impact on the company.
References
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Wardani, DK, & Santi, DK (2018). The Effect of Tax Planning, Company Size, Corporate Social Responsibility (CSR) on Profit Management. Journal of Accounting Vol. 6 No.
Watts, LR, & Zimmerman, LJ (1990). Positive Accounting Theory: A Ten Year Perspective. The Accounting Review, Vol 65, No. 1, 131-156.
William, A., Siegel, D., & Wright, P. (2006). Corporate Social Responsibility: Strategic Implications. Journal of Management Studies, 43.
Yuventi, O. (2013). The Effect of Profit Management on Corporate Social Responsibility Disclosure with Corporate Governance as a Moderation Variable. Scientific Journal of Accounting and Humanity Vol.2, 2.
Amali, Z. (2019). Bengawan Solo Left Dying, Citarum Flushed Hundreds of Billion. Retrieved From Tirto.Id: Https://Tirto.Id/Bengawan-Solo-Libert-Darat-Citarum-Digelontor-Ratusan-Miliar-Emx4
Amalia, RF (2019). Analysis of Tax Aggressiveness and Leverage against Earnings Management in Coal Companies on the Indonesia Stock Exchange. Journal of Competitive Accounting, Online Issn: 2622-5379, Vol. 2, No.3.
Arvina, A. (2014). The Effect of Corporate Social Responsibility Disclosure on Earnings Management.
Astuti, AY, Nuraina, E., & Wijaya, AL (2017). Effect of Company Size and Leverage on. The 9th Fipa: Accounting Education Forum - Pgri Madiun University, Vol. 5 No. 1, 2337-9723.
Astuti, PW (2017). The Effect of Profitability, Company Size, Leverage, and Audit Quality on Earnings Management.
Brigham, Eugene F, H., Joel F, Y., & Akbar, A. (2010). Fundamentals of Financial Management: Fundamentals of Financial Management (Book 2). Jakarta: Salemba Empat.
Bukit, RB, & Iskandar, TM (2019). Surplus Free Cash Flow, Earnings Management, and Audit Committee. International Journal of Economics and Management, 3 (1), 204-223.
Carroll, AB (1999). The Pyramid of Corporate Social Responsibility. Georgia: University of Georgia.
Davidparsaoran. (2009, November 4). The scandal of Financial Statement Manipulation Pt. Kimia Farma Tbk. Retrieved From Davidparsaoran's Blog: Https://Davidparsaoran.Wordpress.Com/2009/11/04/Skandal-Manipulation-Report-Finance-Pt-Chemical-Farma-Tbk/
Davidson, S., Stickney, CP, & Well, RL (1987). Accounting: The Language Of Business. Sun Lakes, Ariz: T. Horton, © 1987.
Dechow, PM, & Sloan, RG (1995). Detecting Earnings Management. The Accounting Review, Vol 70, No. 2, 193-225.
Elkington, J. (1999). Cannibals With Forks: Triple Bottom Line Of 21st Century Business. John Wiley & Son Ltd (Import) (August 31, 1999).
Ermayanti, D. (2016). Social Disclosure, Corporate Diversification, And Bonus Compensation Of Profit Management In Manufacturing Companies In Bei.
Gri. (1997). Discovery The Essentials Of Reporting. Retrieved From Global Reporting Index - Empowering Sustainable Decision: www.globalreporting.Org
Hackston, D., & Markuss, MJ (1996). Some Determinants of Social and Environmental Disclosure in New Zealand Companies. Accounting, Auditing, and Accountability Journal. Vol. 9, No. 1, 77-108.
Hackston, D., & Milne, MJ (1996). Determinants Of Social And Environmental Disclosuresin New Zealand Companies. Accounting, Auditing & Accountability Journal, Vol. 9, No. 1, 77-108.
Harjito, A., & Martono. (2011). Financial Management, Second Edition, First Printing. Yogyakarta: Ekonisia.
Healy, PM (1985). The Effect Of Bonus Schemes On Accounting Decisions. Journal of Accounting and Economics 7, North-Holland, 85-107.
Herlambang, AR (2017). Analysis of the Effect of Free Cash Flow and Financial Leverage on Profit Management. Jom Fekon, Vol. 4 No.1.
Jao, R., & Pagulung, G. (2011). Corporate Governance, Company Size, and Leverage Against Profit Management of Indonesian Manufacturing Companies. Journal of Accounting and Auditing, 8 (1), 1-94.
Jensen, MC, & Meckling, WH (1976). Theory Of The Firm: Managerial Behavior, Agency Costs, And Ownership Structure. Financial Economics, Vol 3, No.4.
Kieso, DE, Jerry, WJ, & Terry, PW (2011). Accounting Principles.10th Edition. Hoboken: John Wiley & Sons, Inc.
Kodriyah, & Fitri, A. (2017). Effect of Free Cash Flow and Leverage on Profit Management. Accounting journal. Vol. 3 No. 2. January 2017.
Nalarreason, KM, T, S., & Mardiati, E. (2019). Impact Of Leverage And Firm Size On Earnings Management In Indonesia. International Journal of Multicultural and Multireligious Understanding, Vol 6, 19-24.
Patten, DM, & Trompeter, G. (2003). Corporate Responses To Political Costs: An Examination Of The Relationship Between Environmental Disclosure And Earnings Management Corporate Responses To Political Costs: An Examination Of The Relationship Between Environmental Disclosure And Earnings Management. Journal of Accounting and Public Policy, 2003, Vol. 22, 83-94.
Prior, D., Surroca, J., & Tribo, JA (2007). Earnings Management and Corporate Social Responsibility. Madrid: Universidad Carlos Iii De Madrid.
Rahayu, DE (2018). The Effect of Free Cash Flow, Leverage, and Financial Performance on Earnings Management.
Richard, C., Firth, M., & Kim, JB (2005). Earnings Management, Surplus Free Cash Flow, And External Monitoring. Business Research, 58 (6), 766-776.
Ross, SA, Randolph W, & Bradford, D. (2000). Fundamentals of Corporate Finance. Boston: Irwin Mcgraw.
Sari, K. (2017, September 14). Toshiba Corporate Finance Scandal. Retrieved From Integrity Prevention - Detection - Investigation: Http://Integrity-Indonesia.Com
Sartono, A. (2014). Theory and Application of Financial Management, Edition 4. Yogyakarta: Bpfe.
Sartono, A. (2014). Financial Management - Theory and Application, Fourth Edition. Yogyakarta: Bpfe Gadja Mada University.
Scott, WR (1997). Financial Accounting Theory, International Edition. New Jersey: Prentice-Hall, Inc.
Sekaran, U., & Bougie, R. (2017). Research Methods for Business, Edition 6 of Book 2. Jakarta: Salemba Empat.
Sembiring, E. (2005). Financial Performance, Political Visibility, Dependence on Debt, The National Symposium on Accounting 6, Airlangga University, 2003. Surabaya.
Siregar, NY (2017). The Effect of Corporate Social Responsibility Disclosure, Corporate Diversification, Bonus Compensation, and Audit Quality on Earnings Management. Journal of Accounting & Finance Vol. 8, No. 2, 38-55.
Sugiyono (2016). Statistics for Research. Bandung: Alfabeta.
Sulistyanto, S. (2008). Profit Management, Theory, and Empirical Models. Jakarta: Pt. Grasindo.
Suliyanto. (2011). Applied Econometrics: Theory and Application with SPSS. Yogyakarta: Andi.
Susanti, L., & Margareta, S. (2019). The Effect of Audit Quality, Leverage, and Company Size on Profit Management. Journal of Management & Accounting Science, Volume Xi No.1.
Sutrisno. (2009). Financial Management Theories, Concepts, and Applications, First Edition, Seventh Printing. Yogyakarta: Ekonisia.
Tandry, AY, Setiawati, L., & Setiawan, E. (2014). The Effect Of CSR Disclosure To Firm Value With Earnings Management As Moderating Variable: Case Study Of Non-Financing Firms Listed In Indonesia. Int. J. Trade And Global Markets, Vol. 7, No. 3, 2014.
Wardani, DK, & Santi, DK (2018). The Effect of Tax Planning, Company Size, Corporate Social Responsibility (CSR) on Profit Management. Journal of Accounting Vol. 6 No.
Watts, LR, & Zimmerman, LJ (1990). Positive Accounting Theory: A Ten Year Perspective. The Accounting Review, Vol 65, No. 1, 131-156.
William, A., Siegel, D., & Wright, P. (2006). Corporate Social Responsibility: Strategic Implications. Journal of Management Studies, 43.
Yuventi, O. (2013). The Effect of Profit Management on Corporate Social Responsibility Disclosure with Corporate Governance as a Moderation Variable. Scientific Journal of Accounting and Humanity Vol.2, 2.
Published
2020-06-25
How to Cite
NADIFAH, Rifda; KUSUMA, Poppy Dian Indira; AROFAH, Triani.
THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY DISCLOSURE, LEVERAGE, AND FREE CASH FLOW ON EARNINGS MANAGEMENT.
SAR (Soedirman Accounting Review) : Journal of Accounting and Business, [S.l.], v. 5, n. 1, p. 99-119, june 2020.
ISSN 2598-0718.
Available at: <https://jos.unsoed.ac.id/index.php/sar/article/view/3028>. Date accessed: 08 apr. 2025.
doi: https://doi.org/10.20884/1.sar.2020.5.1.3028.
Section
Articles
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