Research Article
Income Smoothing in the Indonesian Food and Beverage Sector: The Role of Managerial Ownership, Profitability, Leverage, and Company Size
@INPROCEEDINGS{10.4108/eai.4-9-2024.2353795, author={Aulia Putri Maharani and Fitra Dharma}, title={Income Smoothing in the Indonesian Food and Beverage Sector: The Role of Managerial Ownership, Profitability, Leverage, and Company Size}, proceedings={Proceedings of the 7th International Conference of Economics, Business, and Entrepreneurship, ICEBE 2024, 4-5 September 2024, Shah Alam, Selangor, Malaysia}, publisher={EAI}, proceedings_a={ICEBE}, year={2024}, month={12}, keywords={profitability leverage company size income smoothing}, doi={10.4108/eai.4-9-2024.2353795} }- Aulia Putri Maharani
Fitra Dharma
Year: 2024
Income Smoothing in the Indonesian Food and Beverage Sector: The Role of Managerial Ownership, Profitability, Leverage, and Company Size
ICEBE
EAI
DOI: 10.4108/eai.4-9-2024.2353795
Abstract
In the Indonesian food and beverage industry, this study examines how management ownership, profitability, leverage, and firm size affect income smoothing strategies. The study examines financial records from food and beverage companies that were listed between 2017 and 2020 on the Indonesian Stock Exchange. The results show that the key factors influencing income smoothing strategies are company size, profitability, and leverage. Furthermore, managerial ownership modifies the association between these factors and income smoothing, suggesting that greater managerial ownership influences earnings management behaviour by bringing management's interests into line with shareholders'. By stressing the moderating effect of managerial ownership and offering actual data on the factors influencing income smoothing in the Indonesian food and beverage industry, this study adds to the body of literature. The results offer valuable insights for investors, regulators, and company management regarding the implications of earnings management practices.
