The Effect of Accounting Conservatism, CSR Disclosure and Tax Avoidance on Earnings Management: Some Evidence From Listed Companies in Indonesia

Abstract

The aims of the study is to know the effect of conservatism accounting, corporate social responsibility (CSR) disclosure and tax avoidance on earnings management. In this study variable of conservatism accounting was proxy by accrual. Variable of CSR disclosure was proxy by corporate social responsibility index (CSRI) which refers to guidelines CSRI version GRI-G4 and GRI Standard. Variable of tax avoidance was proxied by CETR. The sample used in this research was mining companies listed in the Indonesia Stock Exchange (henceforth, IDX) from 2015 – 2017. Used purposive sampling, 13 companies were selected from total of 39 data. To analysis the data, this study used descriptive statistics and data panel regression analysis with software eviews7. The finding showed that, as simultaneously, conservatism accounting, CSR disclosure, and tax avoidance influenced earnings management. However, as partially, conservatism accounting influenced earnings management, while CSR disclosure, and tax avoidance did not influence earnings management. Company management can design an advanced implementation mechanism by not carrying out tax planning that is illegal and can be detrimental to the State, and does not worsen the company's image and reputation in the public eye. The financial accounting standards board must enact regulations that can minimize tax avoidance and earnings management. This regulation is needed to increase the responsibility of management and accountants in the credibility of financial statements.