Earnings management remains a major concern in financial reporting because it may reduce the credibility of accounting information and weaken stakeholders’ confidence. This study aims to examine the influence of tax planning, leverage, and Environmental, Social, and Governance (ESG) performance on earnings management, while investigating the moderating role of audit quality. A quantitative explanatory research design is employed using secondary data obtained from annual reports, audited financial statements, and sustainability reports of non-financial companies listed on the Indonesia Stock Exchange during the 2021–2025 period. The data are analyzed using panel data regression with moderation analysis to evaluate both the direct effects of the independent variables and the interaction effects of audit quality. The findings indicate that tax planning and leverage have a positive and significant effect on earnings management, whereas ESG performance has a negative and significant effect. Furthermore, audit quality significantly moderates the relationships between tax planning, leverage, ESG, and earnings management by reducing managerial discretion and improving the credibility of financial reporting. These findings suggest that high-quality auditing serves as an effective corporate governance mechanism capable of mitigating opportunistic financial reporting practices. The study contributes to the accounting and sustainability literature by integrating financial, non-financial, and governance factors into a comprehensive empirical framework. The findings also provide practical implications for regulators, investors, auditors, and corporate managers in promoting transparent financial reporting and strengthening corporate governance.
This study investigates whether audit quality, audit tenure, and Environmental, Social, and Governance (ESG) disclosure enhance earnings quality, while examining the moderating role of firm risk. The research is motivated by the increasing demand for reliable financial reporting and growing concerns over earnings management practices that undermine the credibility of corporate financial statements. Although previous studies have explored the individual effects of audit quality, audit tenure, and ESG disclosure on earnings quality, limited evidence exists regarding their combined influence and the conditional role of firm risk. This study employs a quantitative explanatory research design using panel data from non-financial companies listed on the Indonesia Stock Exchange (IDX) during the 2021–2025 period. Secondary data are collected from annual reports, audited financial statements, and sustainability reports, and analyzed using panel data regression with moderation analysis. The findings indicate that audit quality, audit tenure, and ESG disclosure significantly improve earnings quality by reducing discretionary accruals. Furthermore, firm risk significantly moderates these relationships, suggesting that the effectiveness of audit mechanisms and sustainability reporting depends on the firm's risk profile. The study contributes to the accounting and corporate governance literature by providing an integrated framework that links audit characteristics, ESG disclosure, and firm risk in explaining earnings quality. The results also offer practical implications for regulators, auditors, corporate managers, and investors in promoting transparent financial reporting and strengthening corporate governance practices.
Maulina Diyah Permatasari, Vista Yulianti, Lutfia Dhiya Ulhaq· Jurnal Mutiara Ilmu Akuntans...· 0 citations
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