<![CDATA[Purpose – High-quality financial reporting is essential for reducing information asymmetry and supporting investors' decision-making. However, earnings management remains a persistent issue, particularly in Indonesia, where investor protection and reporting transparency are relatively weak. Drawing on stakeholder theory and agency theory, this study investigates the effect of equity investor demand on earnings management and examines whether corporate governance moderates this relationship. Methods – This study employs a sample of Indonesian manufacturing firms listed on the Indonesia Stock Exchange between 2014 and 2021. Using purposive sampling, 70 firms with 366 firm-year observations are analysed. Earnings management is measured using the accrual quality model developed by Dechow and Dichev (2002), while equity investor demand and corporate governance are measured using established proxies from prior literature. Findings – The regression results indicate that equity investor demand has a significant negative effect on earnings management, suggesting that stronger investor monitoring discourages opportunistic financial reporting. Furthermore, corporate governance significantly weakens the relationship between equity investor demand and earnings management, indicating that weak governance mechanisms within an entity can enhance the role of investor oversight in curbing managerial opportunism. Research implications – Theoretically, this study reinforces the integration of agency and stakeholder theories by demonstrating that collaboration between external market oversight and internal governance mechanisms can foster a credible financial reporting ecosystem in developing nations. Originality – These findings contribute to the literature on stakeholder monitoring and corporate governance by demonstrating the substitutive role of both in enhancing financial reporting quality in emerging market environments.]]>
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