Leverage, Corporate Governance, and Real Earnings Management
DOI:
https://doi.org/10.32662/gaj.v9i2.5182Abstract
This study investigates the impact of leverage, independent commissioners, and board size on Real Earnings Management (REM) within the Indonesian construction sub-sector (2020–2024). Using purposive sampling (78 observations) and the Common Effect Model (CEM), the results demonstrate that leverage (Debt to Asset Ratio) significantly and positively affects REM. Conversely, the proportion of independent commissioners and board size exhibit no statistically significant influence. Simultaneously, these variables explain 16.23% of REM variation. The findings suggest that high financial debt catalyzes opportunistic operational manipulation in capital-intensive environments, while formal internal governance configurations serve primarily as regulatory compliance rather than substantive oversight against transaction-based adjustments.
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