The Determinant Of Earnings Management: Size Aspect And Non-Performing Loans

Puji Lestari, Syaiful Azhar, Utik Nurwijayanti


The quality of financial statements must meet the qualitative characteristics as required by Financial Accounting Standards. However, the quality of financial reports that have not matched the expectations is still prevalent in Indonesia, both in public and private sector, including in Bank Perkreditan Rakyat or BPR (Rural Bank). One of  the financial statements manipulations that distorts the quality of BPR financial statements is earnings management. This study aims to determine the effect of size aspect and non-performing loans (NPL) on earnings management. Size is measured by total assets, NPL is calculated by dividing non-performing loans (substandard, doubtful, and loss) on total credit, while earnings management by using Kothari's discretionary accrual model (2005). Data were obtained from BPR’s financial statements in the ex Banyumas Residency during the period of 2015-2018 in the form of quarterly financial statements. There were 182 observations being analyzed by using multiple linear regression with SPSS tool. The results of this study show that: 1) Size aspect doesn’t affect earnings management, 2). Non-performing loans ratio affects earnings management.


Size, Non-Performing Loans, Earnings Management

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