PENGARUH FINANCIAL DISTRESS, WORKING CAPITAL, DAN LEVERAGE TERHADAP EARNINGS MANAGEMENT: Indonesia

Gita Salsabila Gita Salsabila; Regina Jansen Arsjah

doi:10.37301/jkaa.v22i1.263

Authors

Gita Salsabila Universitas Trisakti
Regina Jansen Arsjah Universitas Trisakti

DOI:

https://doi.org/10.37301/jkaa.v22i1.263

Keywords:

earnings management, financial distress, working capital, leverage, property and real estate

Abstract

This research seeks to examine how financial hardships, working capital, and leverage impact earnings management in property and real estate firms that are listed on the Indonesia Stock Exchange (IDX). The study utilizes panel data made up of time-series data from 2020 to 2024 and cross-sectional data from 41 companies chosen through purposive sampling. Earnings management is evaluated through discretionary accruals using the Modified Jones Model, financial distress is represented by the Altman Z-Score, working capital is calculated by the ratio of working capital to total assets, and leverage is represented by the Debt to Asset Ratio (DAR). The analytical approach used is panel data regression with the Fixed Effect Model (FEM). The findings indicate that, when considered together, financial distress, working capital, and leverage significantly influence earnings management. On an individual basis, financial distress negatively and significantly affects earnings management, working capital positively affects earnings management, while leverage does not significantly impact earnings management.

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