Income Smoothing Perspective of Mining Companies in Developing Countries

Abstract

Income smoothing is an effort of corporate management in reducing the range of profits reported on the financial statements as achieving the desired level of profit, in other words that the normalization of earnings carried out intentionally is to reach a certain level. This study aims to examine the factors that influence income smoothing practices. This study uses all mining sector industrial companies listed on the Indonesia Stock Exchange in 2015 to 2018. Sampling using purposive sampling method and obtain a sample of 9 out of 40 sample data for 3 years of observation. The statistical analysis used in this study is logistic regression analysis. The results show that company size has a positive effect to income smoothing. While profitability, leverage and institutional ownership do not have an influence on income smoothing.