This study aimed to investigate the impact of the level of Investment
Opportunity Set (IOS) toward extent of income smoothing in manufacturing
companies that listed in Indonesia Stock Exchange. Total sampels of this study are
35 companies for accounting period of 2014-2017. Level of investment
opportunity set is determined by Earnings per Share Price ratio (EPSP). It is a
proxy of investment opportunity set which used to measure growth opportunity to
earnings. The proxy is classified as the one of based-price proxy. Earnings per
Share Ratio have significant influences toward extent of income smoothing. The
high level of investment opportunity set make more extent of income smoothing.
A mangers of a company does income smoothing based on the level of investment
opportunity set. When the level of investment opportunity set is high, then
manager has more extent of income smoothing. It is positive correlation which
level of investment opportunity set influences the extent of income smoothing
significantly.