Abstract:
The aim of this research is to indicate the relationship between corporate
governance mechanism and earnings management among all companies listed in Indonesia Stock Exchange period 2010 – 2012. The corporate governance
mechanism includes managerial ownership, institutional ownership, audit committee performance, board of commissioner size, and public accountant firm reputation. Discretionary Accruals by Modified Jones Model is a proxy to
measure the earnings management. The sample used in this research is 88 companies that fulfill the criteria of purposive sampling. This research uses multiple linear regression model to examine the effect of corporate governance mechanism towards earnings management.
The result of this research indicates that board of commissioner size and institutional ownership negatively affect and significantly affect the earnings management. Managerial ownership positively affects and significantly affects the earnings management. Audit Committee Performance and Public Accountant firm Reputation do not give significant impact to the earnings management. Corporate governance mechanism simultaneously affects the earnings management.
