This document summarizes a study on the effects of corporate governance on earnings management in the Indonesian banking industry from 2007-2011. It examines how factors like the audit committee, board of commissioners size, ownership and disclosure status, board composition, and company size impact earnings management. The study uses a sample of 26 banks and analyzes the data using a modified Jones model to detect earnings management and regression analysis to test hypotheses. The conclusions found that the audit committee and board composition affect earnings management, while board size, ownership/disclosure status, and company size do not.

1. THE EFFECTS OF CORPORATE GOVERNANCE
ON EARNINGS MANAGEMENT
(CASE STUDY OF INDONESIAN BANKING
INDUSTRY 2007-2011)
By
Ali Mutasowifin
Tutut Ida Hardiati Wibowo

2. Background
 Economic crisis
 Banking industry potential in development.
 Low market penetration.

3. audit committee (AC)
board of commissioners
size (BCS)
ownership and disclosure
status (ODC)
board of commissioners
composition (BCC)
company size (CS)
Earnings
Management

4. Population and Sample
This research population is Indonesian banks
(2007-2011). Sampling techniques by
purposive sampling in order to obtain
representative samples in accordance with
specified criteria.

5. Population and Sample
Total Banks (2011) 120
Islamic banks (11)
Mixed banks (12)
Foreign banks (10)
Banks with invalid data (26)
Banks with incomplete data (35)
Sample banks 26

6. Data Analysis Methods
The method used to detect earnings management
is Modified Jones Model (1995). The model
estimates the expected accrual rate (non-
discretionary accrual) as a function of the
difference between the change in revenue,
accounts receivable, and fixed assets.

7. Processing and Data Analysis

8. Regression Assumption Test
1. Normality Test
2. Multicollinearity Test
3. Autocorrelation Test
4. Heteroscedasticity Test

9. Hypothesis Test
1. F Test
2. t Test
3. Coefficient of Determination

10. Multiple Linear Regression Test
Based on the table, the multiple regression equation as follows:

11. CONCLUSION
 Audit committee affect earnings management.
 Board of commissioner size does not affect earnings
management.
 Ownership and disclosure structure does not affect
earnings management.
 Board of commissioner composition affect earnings
management.
 Company size does not affect earnings management.

12. THANK YOU