Earning Management Based On Investment and Funding Decisions and Financial Performance

Abstract

Profit is the main concern for assessing the performance or accountability of management. Profit information also helps owners or other parties in assessing the company's earning power in the future. Therefore every business has the hope of realizing maximum profit. In addition, earnings management is very important to help businesses survive, project and develop strategies for the future and improve their performance. Earnings management is carried out based on the company's financial performance, and to maintain it, it is necessary to pay attention to the company's investment and funding decisions. This study aims to examine and analyze (1) the effect of investment and funding decisions on financial performance and earnings management, (2) financial performance as a mediator between investment and funding decisions on earnings management. The population are transportation companies listed on the Indonesia Stock Exchange for the period 2019 – 2021. Based on the criteria, the sample is 39 companies. Data analysis technique with multiple linear regression and the sobel test. The results of the research show that investment and funding decisions are partially unable to influence financial performance and earnings management. Financial performance is not able to mediate the influence of investment and funding decisions on earnings management. The results of the research show that investment and funding decisions are partially unable to influence financial performance and earnings management. Financial performance is not able to mediate the influence of investment and funding decisions on earnings management. The results of the research show that investment and funding decisions are partially unable to influence financial performance and earnings management. Financial performance is not able to mediate the influence of investment and funding decisions on earnings management.