Can The Presence of Women in Corporate Governance Reduce Earnings Management Practices?
DOI:
https://doi.org/10.37253/gfa.v7i1.7513Keywords:
Women, Corporate Governance, Earning Management, AccrualAbstract
Purpose - The purpose of this study is to obtain empirical evidence the existence of woman in corporate governance has an influence on the earnings management practice in the company. The independent variables used in this study consisted of woman board of commissioners, woman board of directors, woman audit committee. The role of female in corporate governance is expected to minimize earnings management practices because women have more rational thoughts than men. This rational thinking will reduce the practice of earnings management in the company.
Research Method - The study uses manufacturing companies listed on the Indonesia Stock Exchange (IDX) in the period 2018-2020. The number of samples used in the study were 119 companies with a total of 357 research data. The sampling method used purposive sampling and multiple regression analysis was used to test the hypothesis.
Findings - The result show that woman in corporate governance mechanism cannot minimize earnings management, because number of female in corporate governance mechanism in Indonesia still little compare to number of male in corporate governance.
Implication - Women who have good supervision and strong ethics of regulations are expected to reduce manipulation in financial statements if women are given equality in decision making, duties and responsibilities in governance so that companies can consider the position of women as supervisors and executors of operations in the company.
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References
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El-Dyasty, M. M., & Elamer, A. A. (2022). Female leadership and financial reporting quality in Egypt. Journal of Applied Accounting Research, 44(October), 0–2. https://doi.org/10.1108/JAAR-11-2021-0315
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Nekhili, M., Javed, F., & Nagati, H. (2022). Audit partner gender, leadership and ethics: The case of earnings management. Journal of Business Ethics, 177(2), 233–260. https://doi.org/10.1007/s10551-021-04757-9
Niskanen, J., Karjalainen, J., Niskanen, M., & Karjalainen, J. (2011). Auditor gender and corporate earnings management behavior in private Finnish firms. Managerial Auditing Journal, 26(9), 778–793. https://doi.org/10.1108/02686901111171448
Novilia, O., & Nugroho, P. I. (2016). Pengaruh manajemen puncak wanita terhadap manajemen laba. Dinamika Akuntansi, Keuangan Dan Perbankan, 5(1), 27–45.
Putri, N. G., & Erinos. (2019). Pengaruh keahlian akuntansi komite audit dan dewan komisaris wanita terhadap manajemen laba (studi empiris perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia tahun 2015-2017). Jurnal Eksplorasi Akuntansi, 1(3), 1051–1067.
Qi, B., & Tian, G. (2012). The impact of audit committees personal characteristics on earnings management: Evidence from China. Journal of Applied Business Research (JABR), 28(6), 1331–1344. https://doi.org/10.19030/jabr.v28i6.7347
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Setiawan, D. (2018). Karakteristik dewan komisaris dan manajemen laba: bukti pada peristiwa penawaran saham perdana. Jurnal Siasat Bisnis, 22(2), 164–181. https://doi.org/10.20885/jsb.vol22.iss2.art4
Setiawan, Fanny A., Herni K., Setian B.K. (2020). Influence of women on BOC, CFO & audit committee on earnings quality. Jurnal Akuntansi. Vol. 24, No. 2, pp 204-218.
Sholihin, T. ; (2015). Examining the moderating effect of demographic factors of board of directors on the association between corporate governance and earnings management. Journal of Indonesian Economy and Business, 27(1), 98–110. https://doi.org/10.22146/jieb.6256
Sofian, S., Particia, F.D., Hendra W. (2020). Female in board and eranings management: evidence in INdonesia non-financial firms. Jurnal Keuangan dan Perbankan. 24(2), 449-462.
Srinidhi, B., Gul, F. A., & Tsui, J. (2011). Female directors and earnings quality. Contemporary Accounting Research, 28(5), 1610–1644. https://doi.org/10.1111/j.1911-3846.2011.01071.x
Suciani, Anindya Setya, and Hari Purnama. 2019. Female executive dan manajemen laba: Riset Pada perusahaan manufaktur di Indonesia. Journal of Business and Information Systems, (e-ISSN: 2685-2543) Vol. 1, No. 1: 18–27.
Sudarman, A. W., & Hidayat, W. (2020). Audit committee and earnings management: The role of gender. Jurnal Akuntansi, 23(3), 379. https://doi.org/10.24912/ja.v23i3.603
Sugiharto, A. K. A., & Rudiawarni, F. A. (2017). Pengaruh female executive terhadap kualitas laporan keuangan pada sektor manufakturyang terdaftar di BEI periode 2012-2014. Akuntansi dan Teknologi Informasi, 11(1), 1–19. https://doi.org/10.24123/jati.v11i1.371
Thiruvadi, S., & Huang, H. W. (2011). Audit committee gender differences and earnings management. Gender in Management, 26(7), 483–498. https://doi.org/10.1108/17542411111175469
Widagdo, A. K., Rahmawati, Djuminah, Arifah, S., Goestjahjanti, F. S., & Kiswanto. (2023). The impact of ownership characteristics and gender on earnings management: Indonesian companies. Journal of Risk and Financial Management, 16(1). https://doi.org/10.3390/jrfm16010017
Zalata, A. M., Ntim, C. G., Alsohagy, M. H., & Malagila, J. (2022). Gender diversity and earnings management: the case of female directors with financial background. In Review of Quantitative Finance and Accounting (Vol. 58, Issue 1). Springer US. https://doi.org/10.1007/s11156-021-00991-4
Zalata, A. M., Ntim, C. G., Choudhry, T., Hassanein, A., & Elzahar, H. (2019). Female directors and managerial opportunism: Monitoring versus advisory female directors. Leadership Quarterly, 30(5). https://doi.org/10.1016/j.leaqua.2019.101309
Ammer. M., A, Nurwati, A.-Z. (2017). Gender in management: An international journal. An International Journal International Journal International Journal International Journal, 32(6), 420–440. http://dx.doi.org/10.1108/17542411111154895
Arifin, Lavenia, and Nicken Destriana. 2016. Pengaruh firm size, corporate governance, dan karakteristik perusahaan terhadap manajemen laba. Jurnal Bisnis Dan Akuntansi, Vol. 18, No. 1: 1–93.
Arioglu, E. (2020). The affiliations and characteristics of female directors and earnings management: evidence from Turkey. Managerial Auditing Journal, 35(7), 927–953. https://doi.org/10.1108/MAJ-07-2019-2364
Belaounia, S., Tao, R., & Zhao, H. (2020). Gender equality’s impact on female directors’ efficacy: A multi-country study. International Business Review, 29(5), 101737. https://doi.org/10.1016/j.ibusrev.2020.101737
Dechow, P. M., Sloan, R. G., Sweeney, A. P., Sloan, R. G., & Sweeney, A. P. (1995). Detecting Earnings Management. 70(2), 193–225.
El-Dyasty, M. M., & Elamer, A. A. (2022). Female leadership and financial reporting quality in Egypt. Journal of Applied Accounting Research, 44(October), 0–2. https://doi.org/10.1108/JAAR-11-2021-0315
Florencea, N., & Susanto, Y. K. (2019). Audit Committee: Woman, Experience, Education on Earnings Management. 73(Aicar 2018), 17–21. https://doi.org/10.2991/aicar-18.2019.5
Gavious, I., Segev, E., & Yosef, R. (2012). Female directors and earnings management in high-technology firms. Pacific Accounting Review, 24(1), 4–32. https://doi.org/10.1108/01140581211221533
Hala, G. S. (2019). Women on boards and earnings management: What really matters? Jurnal Keuangan Dan Perbankan, 23(4), 566–578. https://doi.org/10.26905/jkdp.v23i4.3439
Harakeh, M., El-Gammal, W., & Matar, G. (2019). Female directors, earnings management, and CEO incentive compensation: UK evidence. Research in International Business and Finance, 50(May), 153–170. https://doi.org/10.1016/j.ribaf.2019.05.001
Helmy, R. (2020). Pengaruh Dewan Direksi Wanita, Dewan Komisaris Wanita Dan Kualitas Pengungkapan. Jurnal Eksplorasi Akuntansi, 2(4), 3434–3451.
Ittonen, K., Vähämaa, E., & Vähämaa, S. (2013). Female auditors and accruals quality. Accounting Horizons, 27(2), 205–228. https://doi.org/10.2308/acch-50400
Jensen;Meckling. (1976). Racial diversity and its asymmetry within and across hierarchical levels: The effects on financial performance. Human Relations, 72(10), 1671–1696. https://doi.org/10.1177/0018726718812602
Joecks, J., Pull, K., & Vetter, K. (2013). gender diversity in the boardroom and firm performance: What exactly constitutes a “Critical Mass?†Journal of Business Ethics, 118(1), 61–72. https://doi.org/10.1007/s10551-012-1553-6
Jooste, Leonie. 2011. A comparison of ethical perceptions of earnings management practices. South African Journal of Economic and Management Sciences , 14(4), 422-435.
Khlif, H., & Achek, I. (2017). Gender in accounting research: a review. Managerial Auditing Journal, 32(6), 627–655. https://doi.org/10.1108/MAJ-02-2016-1319
Kusmayadi, R. L. (2018). Pengaruh Manajemen Laba, Ukuran Perusahaan dan Leverage Terhadap Return Saham Perusahaan Agribisnis yang Terdaftar di Bursa Efek Indonesia Periode 2014-2017. Resipotory IBS, 1–9. http://repository.ibs.ac.id/19/2/Renoy Liberto Kusmayadi%2C Ak.-Ibs%2C 2018-2.pdf
Lonkani, R. (2019). Gender differences and managerial earnings forecast bias: Are female executives less overconfident than male executives? Emerging Markets Review, 38, 18–34. https://doi.org/10.1016/j.ememar.2018.11.012
Luo, J. hui, Xiang, Y., & Huang, Z. (2017). Female directors and real activities manipulation: Evidence from China. China Journal of Accounting Research, 10(2), 141–166. https://doi.org/10.1016/j.cjar.2016.12.004
Nastiti, M. D., & Susanto, Y. K. (2022). Corporate governance, financial ratio and real earnings management in Indonesia stock exchange. Global Financial Accounting Journal, 6(2), 250-264. doi:10.37253/gfa.v6i2.6783
Nekhili, M., Javed, F., & Nagati, H. (2022). Audit partner gender, leadership and ethics: The case of earnings management. Journal of Business Ethics, 177(2), 233–260. https://doi.org/10.1007/s10551-021-04757-9
Niskanen, J., Karjalainen, J., Niskanen, M., & Karjalainen, J. (2011). Auditor gender and corporate earnings management behavior in private Finnish firms. Managerial Auditing Journal, 26(9), 778–793. https://doi.org/10.1108/02686901111171448
Novilia, O., & Nugroho, P. I. (2016). Pengaruh manajemen puncak wanita terhadap manajemen laba. Dinamika Akuntansi, Keuangan Dan Perbankan, 5(1), 27–45.
Putri, N. G., & Erinos. (2019). Pengaruh keahlian akuntansi komite audit dan dewan komisaris wanita terhadap manajemen laba (studi empiris perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia tahun 2015-2017). Jurnal Eksplorasi Akuntansi, 1(3), 1051–1067.
Qi, B., & Tian, G. (2012). The impact of audit committees personal characteristics on earnings management: Evidence from China. Journal of Applied Business Research (JABR), 28(6), 1331–1344. https://doi.org/10.19030/jabr.v28i6.7347
Scott, R. William. 2012. Financial Accounting Theory, Sixth Edition. Pearson Canada Inc., Toronto, Ontario.
Setiawan, D. (2018). Karakteristik dewan komisaris dan manajemen laba: bukti pada peristiwa penawaran saham perdana. Jurnal Siasat Bisnis, 22(2), 164–181. https://doi.org/10.20885/jsb.vol22.iss2.art4
Setiawan, Fanny A., Herni K., Setian B.K. (2020). Influence of women on BOC, CFO & audit committee on earnings quality. Jurnal Akuntansi. Vol. 24, No. 2, pp 204-218.
Sholihin, T. ; (2015). Examining the moderating effect of demographic factors of board of directors on the association between corporate governance and earnings management. Journal of Indonesian Economy and Business, 27(1), 98–110. https://doi.org/10.22146/jieb.6256
Sofian, S., Particia, F.D., Hendra W. (2020). Female in board and eranings management: evidence in INdonesia non-financial firms. Jurnal Keuangan dan Perbankan. 24(2), 449-462.
Srinidhi, B., Gul, F. A., & Tsui, J. (2011). Female directors and earnings quality. Contemporary Accounting Research, 28(5), 1610–1644. https://doi.org/10.1111/j.1911-3846.2011.01071.x
Suciani, Anindya Setya, and Hari Purnama. 2019. Female executive dan manajemen laba: Riset Pada perusahaan manufaktur di Indonesia. Journal of Business and Information Systems, (e-ISSN: 2685-2543) Vol. 1, No. 1: 18–27.
Sudarman, A. W., & Hidayat, W. (2020). Audit committee and earnings management: The role of gender. Jurnal Akuntansi, 23(3), 379. https://doi.org/10.24912/ja.v23i3.603
Sugiharto, A. K. A., & Rudiawarni, F. A. (2017). Pengaruh female executive terhadap kualitas laporan keuangan pada sektor manufakturyang terdaftar di BEI periode 2012-2014. Akuntansi dan Teknologi Informasi, 11(1), 1–19. https://doi.org/10.24123/jati.v11i1.371
Thiruvadi, S., & Huang, H. W. (2011). Audit committee gender differences and earnings management. Gender in Management, 26(7), 483–498. https://doi.org/10.1108/17542411111175469
Widagdo, A. K., Rahmawati, Djuminah, Arifah, S., Goestjahjanti, F. S., & Kiswanto. (2023). The impact of ownership characteristics and gender on earnings management: Indonesian companies. Journal of Risk and Financial Management, 16(1). https://doi.org/10.3390/jrfm16010017
Zalata, A. M., Ntim, C. G., Alsohagy, M. H., & Malagila, J. (2022). Gender diversity and earnings management: the case of female directors with financial background. In Review of Quantitative Finance and Accounting (Vol. 58, Issue 1). Springer US. https://doi.org/10.1007/s11156-021-00991-4
Zalata, A. M., Ntim, C. G., Choudhry, T., Hassanein, A., & Elzahar, H. (2019). Female directors and managerial opportunism: Monitoring versus advisory female directors. Leadership Quarterly, 30(5). https://doi.org/10.1016/j.leaqua.2019.101309
