ANALYSIS OF SUSTAINABILITY REPORT DISCLOSURE TOWARDS FINANCIAL PERFORMANCE WITH EARNING MANAGEMENT AS MODERATING VARIABLE

Abstract

The objective of the research is to find out the influence of sustainability report disclosure to corporate financial performance and earning management as moderating variable. The aims of this research are to find empirical proof about the effect sustainability report disclosure towards corporate financial performance and the effect of those relationships with earning management as moderating variable. Sustainability disclosure by GRI-G4 is used as the proxy of sustainability report, ROE is used as the proxy of financial performance and discretionary accruals by The Modified Jones model is used as the proxy of earning management practices. In this research, the data population taken from mining and energy infrasructure companies that publish sustainability report and listed into Indonesia Stock Exchange, then data is collected by using purposive sampling method. There are 7 companies with total 35 samples starts from 2012 - 2016 used as research data. The analysis methods of this research use simple regression analysis for hypothesis 1 and multiple regression analysis with the Absolute Residual Method for hypothesis 2. The results of this research show that sustainability report has significant influence on corporate financial performance. The analysis with the moderating variable absolute residual method shows that earning management moderate in relation between sustainability report and corporate financial performance and it shows negative significant influence.