The Impact of Audit Committee Characteristics on Real Earnings Management: The Moderating Role of Seniority Level and Education Level of Chief Financial Officer

GOEINAWAN, MICHELLE TEVI and KWANTONO, MICHELINE CLARISSA and Christiawan, Yulius Jogi (2021) The Impact of Audit Committee Characteristics on Real Earnings Management: The Moderating Role of Seniority Level and Education Level of Chief Financial Officer. [UNSPECIFIED]

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Abstract

The aim study of the Impact of audit committee characteristics, especially at composition of women on real earnings management, has been widely carried out with mixed results. Upper-echelon theory explains that the characteristics of its leaders will influence the company’s performance. The achievement of profits reflected the company’s performance. To achieve the profit target, companies need the characteristic of the Chief Monetary Officer (CFO). CFOs who has insight, broad experience and good communication skills will be more considerate and careful in carrying out earnings management to strengthen company performance. The characteristics of the company’s leadership meant are the level of seniority and education of the CFO. Seniority and training stage of CFO are concept to have an effect on the connection between the characteristic of the audit committee and the real income management of an organization. This study aims to examine whether the stage of CFO seniority and schooling can affect the relationship between audit committee characteristics and real salary management. The researchers conducted the find out about on 351 agencies in all sectors, besides banking, which have been listed on the IDX in 2018-2019. The statistics evaluation used panel records regression the use of Gretl software. The consequences of trying out the data proved that greater women composition in the audit committee would probably make bigger the practice of actual profits management. Furthermore, the expand in actual salary administration due to the extra composition of women on the audit committee will be weaker in businesses with a excessive degree of CFO seniority compared to those with low CFO seniority levels. This learn about failed to show the moderating position of CFO training on the relationship between woman composition in the audit committee with real income management. The researchers anticipate the study consequences are useful for shareholders to pay greater interest to the composition of women in the audit committee, the level of seniority, and the schooling of CFOs to avoid real earnings management practices.

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