This research focuses on the impact of independent commissioners and
dividend-paying status toward earnings quality in Indonesia year 2014-2016. It uses
manufacturing company listed in Indonesia Stock Exchange (IDX) during 2014-2016
as its samples. The purposive sampling is used in choosing the sample of this
research. The data used in this research is secondary data taken from Indonesia Stock
Exchange (IDX) website, www.idx.co.id. The percentage of independent
commissioners will be used to measure independent commissioners; dividend dummy
will be used to measure dividend-paying status; and discretionary accruals will be
used to measure earnings quality.
Based on POJK Number 33 Year 2014, a company should have at least 30
percent of independent commissioners. The existence of independent commissioners
is assumed to be important for a company. It makes the company prefer to have
independent commissioners to increase the internal control, so the earnings
manipulation can be low. At the end, the quality of earnings will increase. Dividendpaying
status is considered as a tool to reduce agency conflict. The decision of
dividend payment is decided on RUPS which attended by shareholders. It means that
shareholders involve directly and consciously in making the decision to pay dividend
or not. Therefore, investors prefer to use the other information of the company to
measure its performance and predict earnings quality so, the dividend-paying status
will affect earnings quality insignificantly.