Corporate Governance Mechanisms and Real Earnings Management: Evidence from Indonesia

. This paper discusses how the corporate governance mechanism determines the opportunistic behavior of management in the form of earnings management practices with real activities manipulation. This study provides benefits to the development of literature by examining the effect of corporate governance mechanisms on real earnings management practices in the manufacturing sector listed on the Indonesia Stock Exchange (IDX) 2016-2018. Using purposive sampling method, 224 data were obtained. Multiple regression analysis use to test hypothesis, and the results showed that the existence of independent commissioner is able to reduce the level of real earnings management. Instead, the existence of audit committee cannot reduce the opportunistic behavior of management. This finding proved the need to strengthen the mechanism of corporate governance through the existence of independent commissioners. Regarding the ownership structure, this study was unable to prove the role of share ownership by institutions and management in reducing real earnings management practices. Stock Exchange. The results showed that the independent commissioner variable had a negative effect on real earnings management. Independent commissioners are able to carry out their functions effectively in ensuring adequate control over management. The three corporate