THE EFFECTS OF AUDIT QUALITY, INSTITUTIONAL OWNERSHIP, AND LEVERAGE ON EARNINGS MANAGEMENT WITH TAX AVOIDANCE AS A MODERATING VARIABLE

Abstract

The purpose of this study is to provide empirical evidence on the factors influencing earnings management in energy sector companies listed on the Indonesia Stock Exchange during the 2020–2022 period. The data used in this study was sourced from financial statements accessed through the official IDX website and company reports. The sampling method employed was purposive sampling, which resulted in 15 energy sector companies, yielding a total of 45 observations for the 2020–2022 period. Data processing was conducted using IBM SPSS software version 26 with multiple linear regression and moderated regression analysis methods. The results of the study indicate that audit quality has a negative effect, leverage has a positive effect, and institutional ownership has no effect on earnings management. Tax avoidance does not moderate the relationship between audit quality, institutional ownership, and leverage on earnings management. These findings highlight the importance of improving audit quality to reduce earnings management practices, particularly in the energy sector. Furthermore, the findings regarding the impact of leverage suggest that companies should consider the risks associated with high leverage, which may encourage managers to engage in earnings management.