Corporate Governance, Earnings Management, and Economic Value Added Indonesian Evidence
This paper describes the research which investigates the effect of earnings management and corporate governance (CG) on economic value added (EVA) in companies listed on the Indonesia Stock Exchange for the ﬁscal year ending 31 December 2015 to 2017. Earnings management used in this study is accrual earnings management (MLA) as measured by the Modiﬁed Jones Model and real earnings management (MLR) as measured by management earnings operating cash ﬂows. CG is measured by the CG index. Data is obtained by purposive sampling process and comesfromsecondarydatabothfromtheIDXandfromthewebsitesofeachcompany. The research hypothesis was tested using generalized-least square (GLS). The results showed that accrual earnings management had a positive effect on EVA while real earnings management had a negative effect on EVA. The results also show that CG has a negative effect on EVA if tested together with MLA, but CG does not affect EVA if tested together with MLR. This research is expected to contribute to the existing literature by completing and enriching ﬁndings on the effect of earnings management and corporate governance on EVA.
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