The Effect of Corporate Governance Mechanism and Investment Opportunity Set (IOS) on Earnings Quality
Earnings quality is earnings that correctly and accurately describe the company's operating profitability. One of the most considered information in making economic or investment decisions is earnings information. Earnings as part of the financial statements, if can’t present the true facts about the company's economic condition can be doubted its quality. Several studies on the mechanism of corporate governance and investment opportunity sets affecting earnings quality have been conducted, but the results obtained still indicate
inconsistencies. The purpose of this study is to examine and obtain empirical evidence of the influence of corporate governance mechanisms and investment opportunity sets on earnings quality. The population used in this study is manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2016-2018 period. Sample selection using purposive sampling method and obtained as many as 24 manufacturing companies that meet the sample criteria. Data analysis technique in this research is to use Multiple Regression analysis. The results showed that the independent commissioner and investment opportunity had no effect on earnings quality. While managerial ownership, institutional ownership and audit committee had a negative effect on earnings quality.