This study examines the effect of good corporate governance on earnings
management through real activities manipulation. Good corporate governance is measured by
the board commissioner size, number of board commissioners meeting, the independent
board commissioner composition, audit committee size, number of audit committee meetings,
audit committee competency, and audit quality. Earnings management through real activities
manipulation is measured using abnormal cash flow from operations and abnormal
discretionary expenses.
This research was conducted by using financial statements of merchandising company
that listed in the Indonesian Stock Exchange in 2009-2013 as many as 83 samples. The
method of analysis used in this study is multiple regression.
Based on the results of the study showed that the variables of good corporate
governance has no effect on earnings management through real activities manipulation. This
is due to the less effective application of board commissioner and audit committee, less
competency and only to comply with existing regulations