THE EFFECT OF MANAGERIAL OWNERSHIP AND AUDIT COMMITTEE ON EARNINGS MANAGEMENT WITH FIRM SIZE AS A MODERATING VARIABLE IN PRIVATE BANKS LISTED ON THE INDONESIA STOCK EXCHANGE

Abstract

This study is aimed at testing and analysing the influence of managerial ownership and the audit committee on earnings management with firm size as a moderation variable in private banks listed on the Indonesia Stock Exchange during the 2018-2022 period. Sample selection was carried out using the purposive sampling method. The data used is secondary data obtained from www.idx.co.id website. Data analysis was carried out by calculating the PLS Algorithm using SmartPLS and then hypothesis testing was carried out. The results show that company size is able to moderate the influence of managerial ownership on profit management, while managerial ownership and the audit committee have no effect on profit management, and company size is not able to moderate the influence of the audit committee on profit management. This study contributes to the corporate governance literature by providing empirical evidence regarding the role of firm size as a significant moderating variable, specifically strengthening the influence of managerial ownership on earnings management—a finding that challenges the conventional view in agency theory.