Corporate Governance and Earnings Management: A Study of Indonesian Conventional and Islamic Banks

Abstract

This study examines the influencing of corporate governance on earnings management of Indonesian conventional and Islamic banks. The 27 conventional banks and 10 Islamic banks were selected as a sample of this study which observed for 5 years (185 observations). This study found that audit committee and independent board positively influence earnings management of Indonesian banks. This study also provided evidence that concentration ownership negatively associate with earnings management. Moreover, in the context of Indonesian Islamic banks, this study found that the sharia supervisory board size negatively affect to earnings management. KeywordsEarnings management; Audit committee; Independent board, Ownership concentration, Sharia supervisory board