The Effect of Financial Distress on Earnings Management with Managerial Ownership as Moderating Variable

I Komang Sutrisna Adi Natha (Faculty of Economics and Business, Universitas Udayana, Indonesia)
I Gde Ary Wirajaya (Faculty of Economics and Business, Universitas Udayana, Indonesia)

E-Jurnal Akuntansi
Vol. 34 No. 11 (2024)

This study sought to gather empirical evidence about the effect offinancial distress on earnings management moderated bymanagerial. The study conducted on transportation and logisticsfirms listed on the IDX during the period from 2020 to 2022. Thesample determining method used nonprobability samplingthrough total sampling with 60 observations as sample.Moderated Regression Analysis (MRA) was utilized as the dataanalysis technique. The result showed that manager would takeadvantage of asymmetric information and were encouraged totake earnings management actions in order to minimize theimpact of financial distress. Furthermore, managerial ownershipweakened the influence of financial distress on earningsmanagement. When faced with conditions of financial distress,management owned the firm shares would act in harmony withprincipal.