Abstract:
This research aims to find out whether the presence of independent commissioner can restrict the manipulation of
earnings by management in financially distressed companies. Earning management used in this research is accrual
as well as real earning management. This research employs quantitative method with data panel regression model.
The sample used in this study is secondary data obtained from consumer goods industry listed on Indonesia Stock
Exchange during the period of 2015 until 2019. The result of this study revealed that both accrual earnings
management and real earnings management are significantly influenced by financial distress. However,
independent commissioner fails to moderate the relationship of financial distress with both accrual earnings
management and real earnings management. This research gives an insight and input to the management as the
evaluation material, so that the earnings manipulation could be reduced or even not carried out.
