THE INFLUENCE OF EARNINGS MANAGEMENT ON FIRM VALUE AND GOOD CORPORATE GOVERNANCE AS MODERATING VARIABLE

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1 THE INFLUENCE OF EARNINGS MANAGEMENT ON FIRM VALUE AND GOOD CORPORATE GOVERNANCE AS MODERATING VARIABLE (Empirical Studies Real Estate and Properties Companies Listed in Indonesia Stock Exchange Period ) Created by: Muhammad Anugrah Asshiddiq DEPARTEMENT OF ACCOUNTING INTERNATIONAL CLASS PROGRAM FACULTY OF ECONOMICS AND BUSINESS SYARIF HIDAYATULLAH STATE ISLAMIC UNIVERSITY JAKARTA

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5 SHEET STATEMENT AUTHENTICITY SCIENTIFIC WORKS Signature below: Name : Muhammad Anugrah Asshiddiq Student ID : Faculty : Economics and Business Department : Accounting (International Program) Hereby declare that in the writing of this thesis, I; 1. Not use other people s ideas without being able to develop and accountable. 2. Do not do plagiarism of other people s works manuscript. 3. Do not use other people s work without mentioning the original source or without the owner s permission. 4. Do not manipulate and falsify the data. 5. Own work and able to work responsible for this work. If in the future there is a demand from the other side of my work, and have been accountably proved, was indeed found evidence that I have violated the above statement, and then I am ready to be sanctioned according to rules applicable in the Faculty of Economics and Business Syarif Hidayatullah State Islamic University Jakarta. Thus statement truly made with sincerely. Jakarta, April 2016 (Muhammad Anugrah Asshiddiq)

6 CURRICULUM VITAE MUHAMMAD ANUGRAH ASSHIDDIQ Accounting Departement Economic and Business Faculty UIN Syarif Hidayatullah Jakarta PERSONAL IDENTITY Name Gender : Muhammad Anugrah Asshiddiq : Male Place & Date of Birth : Tangerang, Januari 21th 1994 Religion Nationality Address : Islam : Indonesia : Bukit Waringin B7 no. 21, Kedung Waringin, Bojonggede, Kab. Bogor, Jawa Barat Indonesia Phone/Mobile : Address : anugrah_asshiddiq@yahoo.co.id - angrh.asshddq@gmail.com FORMAL EDUCATION College Senior High School Junior High School Elementary School : Accounting Departement, Economic and Business Faculty, UIN Syarif Hidayatullah Jakarta : SMA-IT Al-Madinah : SMPN I Bojonggede : SDIT Daarul Fataa

7 The Influence of Earnings Management on Firm Value and Corporate Governance as Moderating Variable (Empirical Studies in Real Estate and Properties Companies listed in Indonesian Stock Exchange Period ) ABSTRACT The objective of this research is to examine the influence of the earnings management concerning to the firm value and to examine whether the corporate governance mechanism is the moderating variable between influence of earnings management toward the firm value. The variable examined in this research is earnings management measured with discretionary accrual by modified Jones model, firm value, board of director, managerial ownership and institutional ownership. The sample which is used in this research are real estate and properties companies listed in Indonesian Stock Exchange on period This research is using purposive sampling method to determine the sample and it produce 12 companies as research sample. Regression analysis method used descriptive statistic and multiple regression. The result of this research shows earning management, size of company and board of director, managerial ownership institutional, ownership as moderating on earnings management simultaneously or together have ability to effect the firm value. Partially board of director, managerial ownership and institutional ownership is a moderating. Beside that the result also indicates that size of company have significant effect positive to firm value. Board of director, managerial ownership, and institutional ownership have significant effect negative to firm value. Other variable do not have significant influence to firm value. Keywords : earnings management, good corporate governance, firm value, board of director, managerial ownership, institutional ownership v

8 Pengaruh Manajemen Laba Terhadap Nilai Perusahaan dan Corporate Governance sebagai Variabel Moderating (Studi Empiris di Real Estate dan Properti Perusahaan yang terdaftar di Bursa Efek Indonesia Periode ) ABSTRAK Tujuan dari penelitian ini adalah untuk menguji pengaruh manajemen laba menyangkut dengan nilai perusahaan dan untuk menguji apakah mekanisme corporate governance adalah variabel moderasi antara pengaruh manajemen laba terhadap nilai perusahaan. Variabel yang diteliti dalam penelitian ini adalah manajemen laba diukur dengan akrual diskresioner oleh dimodifikasi model Jones, nilai perusahaan, dewan komisaris, dewan direktur dan komite audit. Sampel yang digunakan dalam penelitian ini adalah perusahaan real estate dan properti yang terdaftar di Bursa Efek Indonesia pada periode Penelitian ini menggunakan metode purposive sampling untuk menentukan sampel dan menghasilkan 41 perusahaan sebagai sampel penelitian. Metode analisis regresi digunakan statistik deskriptif dan regresi berganda. Hasil penelitian ini menunjukkan manajemen laba, ukuran perusahaan dan dewan direktur, kepemilikan manajerial, kepemilikan institusional sebagai moderator pada manajemen laba secara bersamaan atau bersama-sama memiliki kemampuan untuk mempengaruhi nilai perusahaan. Secara parsial dewan direktur, kepemilikan manajerial dan kepemilikan institusional adalah pemoderasi. Selain itu hasilnya juga menunjukkan bahwa ukuran perusahaan berpengaruh signifikan positif terhadap nilai perusahaan. Direksi, kepemilikan manajerial, dan kepemilikan institusional berpengaruh signifikan negatif terhadap nilai perusahaan. variabel lainnya tidak berpengaruh signifikan terhadap nilai perusahaan. Kata kunci: manajemen laba, good corporate governance, nilai perusahaan, dewan direktur, kepemilikan manajerial, kepemilikan institusional vi

9 FOREWORD Assalammu alaikum Wr. Wb. All praise to Allah SWT, the Most Gracious and the Most Merciful, the Cherisher and Sustainer of the worlds; who always gives the writer all the best of this life and there is no doubt about it. Shalawat and Salaam to the Prophet Muhammad SAW and his family. With blessing and mercy from Allah SWT, the writer can complete this thesis to fulfill one of the requirements in accomplishing bachelor degree. The writer is also well-aware that without advice and support from various parties, this thesis will not be realized properly. Therefore, the writer would like to take her opportunity to express her deep and sincere gratitude to the following: 1. Beloved parents and sister, my father Andi Nasri Hamzah, my mother Iin Aryanti and also my sister Aliyah Khairunissa who have given all their efforts morally and material to my college study. For also being such a great parents and sister that always give me support and advice to finish this thesis. Thank you for your love and prayers that never end. All this efforts is dedicated to you all. May Allah SWT always give His blessing for you all. vii

10 2. Dr. Arief Mufraini, Lc., M.si. as the Dean of Economic and Business Faculty. 3. Yessi Fitri, SE., Ak., M.Si and Hepi Prayudiawan,SE,Ak,MM., as the Lead and Secretary of Accounting Department. 4. Prof. Dr. Azzam Jasin, MBA as the thesis supervisor I. By his advice, direction, and guidance I can write this thesis properly. Thank you so much for your time and kindness to help me in finishing this thesis. 5. Atiqah, SE, MS. Ak as the thesis supervisor II. Also by her advice, direction, and guidance I can write this thesis properly. Thank you so much for your time and kindness to help me in finishing this thesis. 6. All the lectures who have taught me many things patiently. Thank you for all the knowledge that will lead me to a better future. May your charity and deeds are always recorded by Allah SWT. 7. All the staffs in Economic and Business Faculty. Especially to Mr. Bonyx who always reminds me to finish my thesis and provide me all the procedures I need in making this thesis. 8. All my dear friends in Accounting International Program 2011 for every foolish things, jokes, support and motivation that you have done. My 'Gang Kubur' mates and 'Warkop' mates for every moment we spend together. And especially to my Oktaviani Dewi Masitho who always have time for me in your activity. Thank you for your pray, help, support and everythings that you did. viii

11 9. Senior and junior thank you for support an help me in wite this thesis, and all of you that I cannot mention one by one. Thank you for sharing joy moments. The writer realizes that this thesis is still far from perfection due to limited knowledge of the writer. All the suggestions and constructive criticism are welcomed in order to make this thesis better. Hope, this thesis will be useful for any researcher or reader. May Allah SWT always bless every step in our life. Wassalamu alaikum Wr. Wb. Jakarta, April 2016 The Writer Muhammad Anugrah Asshiddiq ix

12 TABLE OF CONTENTS Certifivation of Comprehensive Exam... Certifivation From Supervisor... Sheet Statement Authenticity Scientific Work... Curriculum Vitae... Abstract... Abstrak... Foreword... Table of Content... List of Tables... List of Figures... List of Appendix... i ii iii iv v vi vii x xiv xvi xvii Chapter I INTRODUCTION A. Background... 1 B. Problem Identification... 9 C. Research Objectives... 9 D. Benefits of Research Chapter II LITERATURE REVIEW A. Theory Development Agency Theory Good Corporate Governance (GCG) a. Concept Good Corporate Governance x

13 b. Good Corporate Governance s Legal Basis in Indonesia c. Basic Principle of Good Corporate Governance d. The purpose and Benefits of Good Corporate Performance Board of Director Ownership Structure a. Institutional Ownership b. Managerial Ownership Earnings Management Company Performance Analysis B. Previous Research C. Theoritical Framework D. Hypothesis Chapter III RESEARCH METHODOLOGY A. Scope of Research B. Sampling Method C. Data Collection Method D. Analyze Method Descriptive Statistical Analysis Classical Assumption a. Normality Test b. Multicollinearity Test c. Autocorrelation Test xi

14 d. Heteroscedasticity Test Hypothesis Testing a. Coefficient of Determination (R2) b. Multiple Regression Analysis c. Simultaneous Significance Test (F-Test) d. Partial Significance Test (t-test) e. Moderated Regression Analysis E. Definition of Operational Variable Independent Variable Dependent Variable Moderating Variable Chapter IV ANALYSIS AND DISCUSSION A. General Description of Research Object B. Analysis and Discussion Descriptive statistic Classic Assumption Test a. Normality Test b. Multicollinearity Test c. Autocorrelation Test d. Heterocedasticity Test Hypothesis Testing a. Coefficient of Determination (R2) b. Multiple Regression Analysis c. Simultaneous Significant Test (F-Test) xii

15 d. Significant Partial Test (t-test) e. Moderate Regression Analysis Chapter V CONCLUSIONS AND RECOMMENDATIONS A. Conclusion B. Recomendation REFERENCE APPENDIX I APPENDIX II xiii

16 LIST OF TABLE NO DESCRIPTION PAGE 2.1 Previous Research Summary of Variable Operational Research Sample Selection List of Companies Sample Descriptive Analysis One Sample Kolmogorov-Smirnov Test (Model 1) One Sample Kolmogorov-Smirnov Test (Model 2) One Sample Kolmogorov-Smirnov Test (Model 3) Multicollinearity Test (Model 1) Multicollinearity Test (Model 2) Multicollinearity Test (Model 3) Autocorrelation Test (Model 1) Autocorrelation Test (Model 2) Autocorrelation Test (Model 3) Criteria of Correlation Coefficient Model Summary (Model 1) Model Summary (Model 2) Model Summary (Model 3) Multiple Regression Analysis (Model 1) Multiple Regression Analysis (Model 2) Multiple Regression Analysis (Model 3) Simultaneous Significant Test (Model 1) xiv

17 4.21 Simultaneous Significant Test (Model 2) Simultaneous Significant Test (Model 3) Partial Test Result (Model 1) Partial Test Result (Model 2) Partial Test Result (Model 3) xv

18 LIST OF FIGURE NO DESCRIPTION PAGE 2.1 Theoritical Framework Normality Test (Model 1) Normality Test (Model 2) Normality Test (Model 3) Histogram (Model 1) Histogram (Model 2) Histogram (Model 3) Scatterplot (Model 1) Scatterplot (Model 1) Scatterplot (Model 1) xvi

19 LIST OF APPENDIX NO DESCRIPTION PAGE APPENDIX I Sample Descriptive APPENDIX II Output SPSS xvii

20 CHAPTER I INTRODUCTION A. Background At this time the people of the world economy is facing a massive transition process in the field of economy, namely globalization. globalization leading to free trade and open investment climate lead to greater competition, as a result the company is required to operate in a more competitive and productive in improving firm value. The performance is an overview of the implementation of an activity's achievements in realizing the objectives of the company. Where one of the important objectives of the establishment of the company is maximizing shareholder wealth through increased value of the company (Brigham and Houston, 2001). The company's financial performance is a reflection of the financial condition of a company are analyzed with the tools of financial analysis, so that it can be known about either the bad financial state of a company that reflects the achievements of the work in a given period. With the company's financial performance is also called a determination that measures concerning both the company in bad work achievement can be seen from its financial condition in a certain period. Going public is one way a business entity to obtain funds by way of selling and offering to relinquish rights to shares with payment. Business entities may 1

21 go public by selling new shares originating from authorized capital as well as the old shares originating from the capital that has been paid (Sumantoro, 1990 : 64). In order to attract the investors, the company must provide details of the financial statements as financial performance assessment has been carried out. The financial condition of the company will be known from the company's financial statements consisting of balance sheet, income statement and other financial reports. By conducting an analysis of the financial statement the investors know about the company financial performance (Palupi, 2013). Companies that go public are managed by separating the functions of ownership (principal) with management or managerial function (agent). The separation of these functions form an agency relationship is a relationship in which shareholders entrust the management of the company is done by another person or manager (agent) in accordance with the interests of the owner (principal) by delegating some decision-making authority to the agent (Jensen and Meckling, 1976). As a result of devolution and appointment management (manager) has brought various consequences and impact of the separation of powers and interests between the owner (principal) and management (agent) that will cause agency problems (Berle and Means,1934). The agency problem arises as a result of the opportunistic nature of the management (agent) who tend to prefer the welfare that is contrary to the goals of the principal (Jensen and Meckling, 1976). Management (agent) 2

22 considers that the company's success in achieving performance (performance) is the result of work without seeing a large contribution from other parties including the owners (stakeholders). In relation to the agency problem, some experts argue that the presence of the agent and the principal is one of the factors on which the emergence of the theory of agency. Disharmony the objectives and interests between the agent and the principal can lead agency cost and asymmetric information. Asymmetric information is an imbalance between the information held by the agent and the principal in the management of the company (Ujiyantho and Pramuka, 2007). There are two types of asymmetry of information, namely: adverse selection and moral hazard. Adverse selection, is a condition in which the management has more information from the owner (principal) about the company's prospects, while moral hazard, a condition where the owner (principal) who do not know the activity of management (Scott, 2003). The existence of asymmetric information that gives an opportunity for management to perform earnings management (Richardson, 1998). Healy and Wahlen, 1999 in Theresia, 2005) states that earnings management is the management's efforts to change the financial statements aimed at misleading the shareholders who want to know the performance of the company or to influence contractual outcomes that rely on accounting numbers that reporting. Gumanti (2000) stated that earnings management allegedly committed by managers or preparers of financial statements in the 3

23 financial reporting process of an organization because they are expecting a benefit from their actions. Note that earnings management is not always associated with an attempt to manipulate the data or accounting information, but more likely to be associated with the selection of accounting model (accounting methods) to set the gain that could be done because it is allowed according to the accounting regulations. If the company is in a condition where the management cannot achieve the profit target set, then the manager will make modifications profit is still in accordance with the applicable accounting standards. Management motivated to show good performance in generating maximum profits for the company so that management tends to select and apply accounting methods that can provide a better return information (Halim, et al; 2005). Earnings management action by management has lead to scandal in financial reporting (accounting) such as Merck, Wordcom and Enron as well as several other large companies in the United States (Cornett et al; 2006). Some major cases in corporate financial reporting scandals involving major companies in Indonesia including PT. Kimia Farma Tbk, and Bank Lippo Tbk. PT Kimia Farma Tbk indicated inflate the annual net profit of billion rupiah in While PT. Indofarma Tbk perform earnings management practices by presenting overstated net income by presenting a higher inventory than it should, so that cost of goods sold that year occurred understated (Bapepam, 2004). 4

24 In this case a violation of the principle of disclosure is accurate and transparency are consequently extremely detrimental to investors, because it overstated profits have formed the basis of transactions by investors to do business. With the existence of such cases, it is proved that the application of corporate governance is still very weak, because of the practice of manipulation of financial statements still do despite being away from the crisis period in Evidence indicates weak corporate governance practices in Indonesia leads to deficiencies in the company's decision-making and action (Tjager, et al, 2003 in Hardikasari, 2011). Good corporate governance is control efforts by the company to improve performance management by making control more focused on monitoring the behavior of the manager, so that the action taken by the manager is accountable to the parties with an interest in the company. Warsono, et al (2010) states that there are five basic principles of corporate governance that must be met and is owned by five groups of participants in the company that the Board of Directors, Board of Executives, Board of Commissioners/Committees, Auditors, and Stakeholders. Five principles are Transparency, Accountability and Responsibility, Responsiveness, independence, and Fairness. The issue of corporate governance started to become an important discussion, especially in Indonesia, namely after Indonesia experienced a period of crisis since Many people say that the length of the repair 5

25 process problems that the crisis in Indonesia due to the very weak of implementation corporate governance in enterprises in Indonesia. Since then, both the government and investors began to give significant attention in the corporate governance practices (Hardikasari, 2011). The failure of some companies and the onset of the financial crisis as a result of malpractice cases are strong evidence of poor practice of Good Corporate Governance. According to Pangestu and Hariyanto (2004), the characteristics of weak good corporate governance practices in southeast Asia is (1) the existence of a concentration of ownership and the power of insider shareholders (including the government and the parties related to the central power); (2) the weak financial sector governance and (3) the ineffectiveness of internal rules and the absence of the consent law for minority shareholders to deal with majority shareholder and manager. Therefore, based on phenomena above the author interested to analyze : The Influence of Earnings Management on Firm Value and Good Corporate Governance as Moderating Variable This research has been done by several researchers. Research conducted by Herawaty (2008) examine the role of Corporate Governance Practices as a variable that moderates the effect of Earnings Management to the value of the firm. The variable examined in this research is earnings management measured with discretionary accrual, firm value, institutional ownership, 6

26 independent commissioner and audit quality. The sample which is used in this research listed non financial company in Indonesian stock exchange on period of The analytical method used is multiple regression method. In doing multiple regression analysis, first performed classical assumption test in order to meet the nature of regression estimation is BLUES (Best Linear Unbiased Estimator). Sutrisno (2010) examine the influence of the earnings management concerning to the firm value and to examine whether the corporate governance mechanism is the moderating variable between influence of earnings management toward the firm value. The variable examined in this research is earnings management measured with discretionary accrual by modified Jones model, firm value, institutional ownership, managerial ownership, independent commissioner and auditor quality. The sample which is used in the research listed non financial company in Indonesian stock exchange on period of This research is using purposive sampling method to determine the sample and it produce 58 companies as research sample. Regression analysis method used descriptive statistic and multiple regression. Dyas Tri Pamungkas (2012) examine the influence of corporate governance through managerial ownership, institutional ownership, the proportion of independent board and audit quality as a moderating variable of the relationship between earnings management and firm value. The samples used in this study were manufacturing companies listed on the Stock 7

27 Exchange during the years with a random sampling method based some multiple criteria and obtained a sample of 140 companies. Fauzan Kamil (2014) examine the influence of earning management to firm value with corporate governance mechanism as moderating variable. The populations of this research are 77 companies which listed in LQ-45 Index in Indonesia Stock Exchange within periods. In this research 12 sample are selected and used after using non-probability purposive sampling method. The data used in this research are secondary data, which is financial and annual report of the companies within periods, which obtained from site, and sites of the companies that listed in this research sample. This research is using statistic descriptive test, linear regression test, and multiple linear regression test to get the understanding about the connection between variables in this research. The difference of this research with previous research, namely: 1. Years observed in this study was in In this study, researchers focus to one industry that is real estate companies which include property. The goal is to avoid bias caused by differences in the study. 8

28 3. In this research use corporate governance indicators is Board of Director, Managerial Ownership and Institutional Ownership. B. Problem Identification Based on the above description of the background, the problem formulation in this research are: 1. Whether the earnings management influence the firm value? 2. Whether the corporate governance proxied by board of director influence the relationship between earnings management on firm value? 3. Whether the corporate governance proxied by managerial ownership influence the relationship between earnings management on firm value? 4. Whether the corporate governance proxied by institutional ownership influence the relationship between earnings management on firm value? C. Research Objectives The purpose of this study was to analyze empirically the influence of earning management on firm value and good corporate governance as moderating: 1. To analyze influence of earnings management on firm value. 2. To analyze influence of corporate governance proxied by board of director on relation between earnings management and firm value. 9

29 3. To analyze influence of corporate governance proxied by managerial ownership on relation between earnings management and firm value. 4. To analyze influence of corporate governance proxied by institutional ownership on relation between earnings management and firm value. D. Benefits of Research Implementation of this study is expected to provide the following benefits: 1. For the authors, this study is expected to provide insight into the influence of earnings management on firm value and corporate governance as moderating. 2. For companies, this study can be used as additional information or inputs that builds primarily on the influence of earnings management on firm value and corporate governance as moderating. 3. For others, this research is also expected to be useful for those who require a knowledge and insight. 10

30 CHAPTER II LITERATURE REVIEW A. Theory Development 1. Agency Theory Agency theory is a theory that explains the relationship between agents as those who manage the company and the principal as the owner of both which are bound in a contract. The owner or principal is a party to evaluate the information and agents are running as part of management activities and decision making (Jensen and Meckling, 1976). Jensen and Meckling (1976) also define an agency relationship as a contract under which one or more persons the principals engage another person (the agent) to perform some service on their behalf which involves delegating some decision making authority to the agent. If both parties to the relationship are utility maximizes, there is good reason to believe that the agent will not always act in the best interests of the principal. The principal can limit divergences from his interest by establishing appropriate incentives for the agent and by incurring monitoring costs designed to limit the aberrant activities of the agent. In addition, in some situations, it will pay the agent to expend resources (bonding costs) to guarantee that he will not take certain actions which 11

31 will harm the principal or to ensure that the principal will be compensated if he does take such actions. However, it is generally impossible for the principal or the agent at zero cost to ensure that the agent will make optimal decisions from the principal s viewpoint. In most agency relationships, the principal and the agent will incur positive monitoring and bonding costs (nonpecuniary as well as pecuniary), and in addition, there will be some divergence between the agent s decisions and those decisions which would maximize the welfare of the principal. The dollar equivalent of the reduction in welfare experienced by the principal as a result of this divergence is also a cost of the agency relationship, and we refer to this latter cost as the residual loss. In reality, managers will know more about internal information and the company's prospects in the future than shareholders. Therefore, managers should always give a signal about the condition of the company to the shareholder. The signal can be given by the manager through the disclosure of accounting information such as financial report. The financial report is a very important thing for the external users because these entities are in the greatest condition of uncertainty (Ali, 2002). Imbalance knowledge of information will lead to the emergence of a condition known as information asymmetry. With the existence of information asymmetry between management and the shareholder will 12

32 give the opportunity to the manager to do earning management, so that it will mislead shareholders about the company's economic performance. Corporate governance is a concept based on agency theory that is expected to serve as a tool to provide assurance to investors that they will receive a return on the funds they had invested. Corporate governance is closely related to how to make the investors believe that managers will give benefit to them, by believing in that the manager will not misuse the invested fund to the illegal projects. Besides that, corporate governance also relates to how the investors control the managers (Siallagan and Machfoedz, 2006). Special authority in every region in Indonesia in implementing corporate governance is based on Law no. 5 of 1974 on the Principles of Governance in the Region, as well as explaining the relationship between central and local government. After the implementation of policies to implement regional autonomy in Indonesia through Law no. 22 of 1999 as amended by Law no. 32 of 2004 on Regional Government has change a paradigm and a very basic structure, especially the local government relations (Executive) with the Regional Representatives Council/DPRD (Legislative). In this relationship, the Legislative delegates authority to run the government to the executive. 13

33 Agency problems that arise among executives tend to maximize utility (self- interest) in the creating or composing the local budget, because they have the advantage of information (information asymmetry). As a result, executives tend to do "budgetary slack". This happens due to the executive try to secure its position in the government in the point of view of legislative and the public / people, even for the sake of the next election, but budgetary slack of APBD is more for personal interest among executives (self-interest) rather than for the benefit of society. (Latifah, 2010). 2. Good Corporate Governance a. Concept of Good Corporate Governance Good Corporate Governance indefinitely as a system which has authority and as a control to add value for all of stakeholders. As principal of corporate governance have interest for all shareholders and stakeholders in corporate governance. Understand of corporate governance according to the Turnbull Report in the UK (April 1999) Corporate Governance is a company s system of internal control, which has principal to the management s risk which are significant to fulfill of its business objectives to safeguard the company s asset and enhancing over time the value of the shareholders investment. The Implementation involved development of GCG, have two related aspects, namely: hardware and software. The hardware includes the 14

34 establishment of technical or structural change and organizational systems. The software includes more psychosocial change of paradigm, vision. In real-world business practices, most companies more emphasize hardware aspects, such as the preparation of systems and procedures and the establishment of organizational structures. Gede Raka, as panelist from Indonesian Institute for Corporate Governance (IICG), stated of Good Corporate Governance have implied the company and not make a profit for owners, but create value for all concerned parties. Good Corporate Governance concept reflects to share, care, and preserve. Good Corporate Governance should changes of system and structure and dimension paradigm, vision, mission of organization. Changes in technical aspects of structure and systems are required as management s capabilities. In this case, focuses in concern are regularity and smoothness on the process in organization as well as members of the company's adherence to the policy to implement the Principles Good Corporate Governance. The definition according to Cadbury, said that Good Corporate Governance is direct and control the company, in order to reach balance between power of strength and authority of company. World Bank defines Good Corporate Governance is a collection of laws, regulations, and rules which have to fulfill and can push the 15

35 performance of corporate resources as function efficiently, in order to generate economic value of sustainable long term for shareholders and society as a whole. According to decree of Minister of state-owned enterprise No: PER-01/MBU/2011 regarding on the implementation of Good Corporate Governance practices in state-owned enterprise is principles underlying the process and mechanism of corporate governance based enterprise management regulations and business ethics. b. Good Corporate Governance s Legal Basis in Indonesia In Indonesia, the implementation of good corporate governance guidelines have been made by Komite Nasional Kebijakan Governance (KNKG) through his new book released in 2006 entitled Pedoman Umum Good Corporate Governance Indonesia". Devices Regulations and Legislation Circular of Minister of State for Investment and Development of State-Owned Enterprises 106 of 2000 and Decree of Minister of State Enterprises no that regulate and formulate the development of good practice the company's corporate governance in the company, and then refined with KEP- 117/M-MBU/2002 which is renewed by the Regulation of Minister of State-Owned Enterprises PER-1/MBU/2011 of Implementation Practices of Good Corporate Governance (GCG) on SOEs. There 16

36 has also been issued Decree of Minister of State Enterprises no.103 Year 2002 on Establishment of Audit Committee. Capital Market Supervisory Board No. through a circular.. SE- 03/PM/2000 has recommended that public companies to maintain audit committees. c. Basic Principles of Good Corporate Governance Various rules and system as a regulator in management of company s need to be poured in form of principles that must be adhered to the concept of Good Corporate Governance. In generally, there are 5 (five) basic principles (KNKG, 2006), namely: 1) Transparency To maintain the objective of corporate must provide information, which is material and relevant in a way that is easily accessible and understood by stakeholders. Companies should take the initiative to reveal not only the problem that required by law, but also the importance for decision-making by shareholders, creditors and other stakeholders. Corporate must provide the information timely, adequately, clearly, accurately, and all the important events that may affect the condition of corporate. 17

37 2) Accountability Corporate must be accountable for their performance in a transparent and fair. It must be properly managed, scalable, and in accordance with the interests of the company to remain stakeholder s interests. Specify details of duties and responsibilities of each organization and all employees. Corporate must ensure that the organs of company and all employees have competent accordance with the duties, responsibilities, and roles in implementing Good Corporate Governance. Corporate needs to ensure an effective system of internal control to be manage in the company. 3) Responsibility Corporate must comply with laws and regulations and carry out responsibilities for people and the environment. So, the business can be maintained in the long run and gained recognition as the Good Corporate Governance. The organization must adhere to the principle of prudence and ensure compliance with regulatory laws, statutes and regulations. Corporate should be carried out social responsibility. Corporate has to be responsible in management to the principle of corporate, as well as existing of some regulation. 18

38 4) Independency The corporate should be managed independently, so the individual companies do not dominate other organs and no intervention by other parties. Each organ must avoid domination by any party, is not affected by particular interests, independent of other interests, influence and pressure. Each organ shall carry out the functions and duties in accordance with the statutes and regulations, and not dominate the other, or passing the buck between each other. Independency state whereas the corporate are managed by professional without any conflict interest and pressure from any side, which will be affected to the health of corporate. To accelerate the implementation of Good Corporate Governance, the corporate should be managed independently, so their organizations do not dominate to the other and no intervention other parties. Each organization of corporate has to avoid the domination any party, not influenced by special interest, free from conflict and pressure, so the decision-making will be done objectively. Each organ must perform its functions and duties in accordance with the statutes and regulations, do not dominate others and passing the buck between each other to realize an effective internal control. 19

39 5) Fairness To carry out these activities, the company should pay attention to the interests of stakeholders based on the principle of equality and fairness. Corporate provide equal treatment to all stakeholders. Corporate provides the opportunity for stakeholders to give advice and opinion for company s performance and open access of information in accordance with the principles of transparency within the scope of the position. Equality and fairness defined as fair and equal treatment in fulfilling the right of stakeholder arising under treaties and laws, which have applied. Fairness also includes to fulfill the right of investors, legal system and enforcement of regulations, which protect investors. Fairness is expected to make the entire of company s assets are well managed and prudent, also expect to protect all members. Corporate should provide the opportunity for stakeholders to provide input and expression to the interests of companies and open access to information in accordance with the principle of transparency in their respective positions. d. The Purpose and Benefits of Good Corporate Governance The essence of corporate governance is improving the company's performance through the supervision or monitoring of the performance management and accountability to the shareholder and management 20

40 interests of other users, based on a framework of rules and regulations (Gunarsih, 2003). In addition to these good corporate governance also has its benefits, namely as follows: 1) Increase the company performance through the creation process of a better decision making, improving the operational efficiency of the company and further improve service to stakeholders. 2) Facilitate getting a cheaper financing funds so that it can further improve the corporate value. 3) Reduce agency cost means that the cost that should be borne by the shareholder as a result of the delegation of authority to the management. 4) Increase the value of shares of the company so as to enhance the company's image to the wider public in the long run. 5) Restore investor confidence to infuse capital in Indonesia. Whereas the purpose of good corporate governance is as follows: 1) Protecting the rights and interests of the shareholders. 2) Protecting the rights and interests of the members of stakeholders. 3) Increase the value of the company and its shareholders. 21

41 4) Improve the efficiency and effectiveness of work of the Board of Directors and management of the company. 5) Improve the quality of the relationship the Board of Directors with senior management of the company. 3. Board of Directors The board of directors is a party to a corporate entity tasked with carrying out the operation and management of the company. Members of the Board of Directors appointed by the Annual General Meeting (AGM). According to the limited liability company act, which can be appointed as a board member is an individual who is able to carry out legal action and not been declared bankrupt or become a member of the directors or commissioners who were found guilty of causing the company to go bankrupt, or a person who never convicted of committing adverse financial criminal state within five years prior to appointment. The boards of directors are fully responsible for all operations and management of the company in order to carry out the interests in achieving corporate goals. The board of directors is responsible for the affairs of the company with external parties such as suppliers, customers, regulators and legal parties. With such a large role in the management of the company, directors basically have a significant controlling interest in resource management companies and funds from investors. Functions, powers, and responsibilities of directors is expressly stipulated in Law no. 40 of

42 on Limited Liability Company. In this law, the board has the task, among others: 1) Leading publishing company with corporate policies. 2) Choose, assign, and supervise duties of the employee and the manager. 3) Approve the annual budget of the company. 4) Delivering a report to shareholders for the performance of the company. According to the general guidelines of good corporate governance Indonesia, the number of board members must be tailored to the complexity of the company with regard to its effectiveness in decision making. In a company, the amount of both the board of directors and board of commissioners vary. A large number of councils that can provide gains or losses in the company. 4. Ownership Structure The ownership structure is the shareholding in the company, particularly the number of majority (either individually or together) will determine the extent and intensity control to management. Ownership structure is the percentage of shares held by the insider and the outsider shareholder. Insider party i.e. shareholders who are aligned as a directors and commissioners. Outsider party i.e. shareholders that have by the institutions, individuals and other outside the company. Company 23

43 ownership can be seen from the point of the concept of corporate governance, as the owner of an external mechanism, which is strongly associated with the commissioners and directors (Hadiprajitno, 2013). Agency problem is problems arising from the parties involved have different interests with each other. The ownership structure is a mechanism to reduce the conflict between management and shareholders (Faisal, 2004). So the agency problem can be mitigated by the presence of the ownership structure, due to the presence of structured ownership structure, believed to have the ability to influence the future course of the company that may affect the agency costs incurred by the company. Ownership structure can be individual investors, government, and private institutions. The ownership structure is divided into several categories. Specifically ownership structure category includes ownership by institutional ownership and managerial ownership. a. Institutional Ownership Institutional ownership is ownership of shares owned by domestic institutions, foreign institutions, government institutions such as insurance companies, banks, investment companies and other. Institutional ownership may indicate the presence of institutional investors that strong corporate governance mechanisms which can be used to monitor the management of the company (Tarjo, 2008). Ownership structure of public companies in Indonesia is concentrated 24

44 in institutions. Institutions which mean the owner of a public company in the form of institutions, not on behalf of the owner of individual private (Sekaredi, 2011). The majority of institutions is a Limited Liability Company. Ownership by institutional investors is likely to encourage more optimal monitoring the management performance, since share ownership represents a source of power that can be used to support or otherwise of the management performance. Jensen and Meckling (1976) suggest that institutional ownership has a very important role in minimizing agency conflicts that occur between managers and shareholders. According Barnae and Rubin (2005), institutional shareholders with a large stake have an incentive to monitor corporate decisionmaking. The greater the institutional ownership will make sound power and boost the institution to oversee the management and consequently will give greater impetus to optimize the value of the company. In addition, ongoing surveillance of both managers and reduce agency costs. The existences of institutional investors are considered capable of being an effective monitoring mechanism in any decision made by the manager. This is due to the institutional investors involved in strategic decision-making is not easy to believe the earnings manipulation. 25

45 According Cruthley (1999) who found that the monitoring is carried out institutions capable substitute agency costs, thus decreasing agency costs and increase firm value. b. Managerial Ownership Managerial ownership is ownership of shares of the company by a manager or in other words the manager as well as a shareholder (Christiawan and Tarin, 2007). According to Jansen and Meckling (1976) one way in order to reduce the conflict between the principal and the agent can be done by increasing managerial ownership of a company. That means that managerial stock ownership in a company will encourage pooling of interests between principal and agent so that managers act in accordance with the wishes of shareholders. Managerial share ownership can also aligns the interests between managers and shareholders so that managers will be careful in taking decisions because they directly share in the benefits and impact of the decisions of making the wrong decision (Gelisha, 2011). The greater the proportion of managerial stock ownership in the company, the managers tend to try harder and motivated to create the optimal performance of the company because managers have an obligation to maximize the welfare of the shareholders, yet on the other hand managers also have an interest to maximize their welfare (Gelisha, 2011). The Manager will seek to reduce conflicts of interest 26

46 resulting in lower agency costs and can reduce the tendency of managers to perform opportunistic actions. 5. Earnings Management Earnings management is to intervene in the management of external financial reporting process in order to achieve a certain income level with the aim to benefit himself (or his own company). Opportunities to distort that particular income arising from the accounting methods provide opportunities for management to take note of a certain fact in different ways and opportunities for management to involve subjectivity in compiling estimates (Worthy, 1984). Healy (1985) stated that earnings management occurs when managers working in the company with the bonus plan tried to arrange reported earnings in order to maximize the bonus they will receive. Merchant (1989) defines earnings management as an action taken by management to affect earnings that can provide information about the economic benefits are not actually experienced companies. Scipper (1989) defines as earnings management intervention in the financial reporting to external parties for the purpose of personal gain. Earnings management is the management's efforts to change the financial statements aimed at misleading the shareholders who want to know the performance of the company or to influence contractual outcomes that rely on accounting numbers that report. Note that earnings 27

47 management is not necessarily linked to the process of manipulation by the manager, but more likely to be associated with the process of selecting the method of accounting (accounting method) to adjust benefits can be obtained by the company because it is allowed by regulation accounting earnings management, but this remains to be detrimental to shareholders stocks because they get company information presented is not real by the manager so that they can not accurately predict who would benefit they get from the fund has been invested into the company (Healy dan Wahlen, 1998). Based on the various definitions of the earnings management, some of the characteristics of earnings management, namely: (1) carried out based on the time dimension; (2) as an option to the company's accounting policies for financial reporting purposes; (3) there are aspects of the behavior of managers that manage earnings (earnings) with various motives, for example, take advantage by asymmetry of information or to hide poor performance. According to Scott (2002) motivation of the company in this case is the manager doing earnings management: a. Bonus scheme Managers who work in the company with the bonus plan will try to arrange in order to maximize profits bonus that will be received. 28

48 b. Debt Covenant Clause Motivation in line with the debt covenants hypothesis in a positive accounting theory the closer a company to breach debt agreement then the manager will tend to choose accounting methods that can "move" the current period income so as to reduce the possibility of the company suffered a breach of contract. c. Political motivation Large companies and other strategic industry tends to reduce profits to reduce the visibility, especially during periods of high prosperity. This action is performed to obtain the ease and facility of government. d. Taxation motivation Taxation is one of the main reasons why companies reduce reported earnings. By reducing reported earnings, the company can minimize the taxes that must be paid to the government. e. Substitution Chief Executive Officer (CEO) CEO assignment that will expire or be pursuing a strategy of maximizing retirement income to increase bonus. Similarly, the CEOs whose performance is not good, it will tend to maximize profits in order to prevent or undo his dismissal. 29

49 f. Initial Public Offerings (IPO) When the company goes public, the financial information contained in the prospectus is an important source of information. This information can be used as a signal to potential investors, the managers tried to increase reported earnings. 6. Company Performance Analysis The company is an entity form the scene of a unity of the various functions and operational performance work systematically to achieve a certain goal. The goal of a company is an objective to be achieved all stakeholders in the company. To achieve these objectives, the parties interested in the company should cooperate systematic way to yield optimal performance. One way to know whether a company in carrying out its operations in accordance with a predetermined plan and in accordance with the objectives was to find out from the company performance. Performance is a picture of the level of achievement of the results of the implementation of an operational activity. Assessment of performance here is a method and process assessment task execution performance of a person or group of people or work units within a company or organization in accordance with the performance standards or goals set. In realizing the vision and mission of the organization, 30

50 companies need to have a measure to gauge how the achievement of goals and objectives within a specific time period. Thus, the performance as a description of the achievement of the implementation of operational activities is vital in realizing the vision and mission of the organization. Assessment of performance is a form of reflection obligation and responsibility to report on the performance, activities and resources have been used, accomplished and done. To assess whether the stated goals have been achieved is not something easy to do. This is because it concerns the management aspects which are not few in number. Because of this, the company performance can be accessed through a variety of indicators or variable to measure the success of the company. However, in general the performance appraisal company focused on the information derived from the financial statements. General performance of the company usually represent in the financial statements. These financial statements are useful to help investors, creditors, potential investors and other users in order to make investment decisions, credit decisions, as well as the stock analysis determines a company prospects in the future. Through performance evaluation, the company can choose a strategy and financial structure. Since the company performance appraisal based on financial statements, it is to assess the performance using financial ratios. These ratios which will give the indication for the management of the investor 31

51 assessment of the company performance and its prospects in the future. Ratios commonly used to assess the financial performance, among others, is Tobin's Q. In the capital markets, managers and investors are more interested in the market value of a company is more often using Tobin's Q as the ratio to measure financial performance. According to Darmawati (2011) Tobin's Q ratio can explain various phenomena in company activities, such as the relationship between management ownership and company value, the relationship between performance management and profits, acquisitions, and financing policies, as well as dividends, and compensation. Darmawati (2011) also stated that the ratio of assessed to provide good information, because it can explain various phenomena in corporate events, such as the differences in investment and diversification decisions, the relationship between management stock ownership and corporate value. However, the use of Tobin's Q as financial ratios to demonstrate the performance of the company has a number of drawbacks. According to Bukhari (2011) that the market value can be the size of the firm value, while the balance sheet, total equity capital of the company describe. Assessment of the company not only refers to the nominal value, this is due to the condition of the company to change at any time significantly. Usually the pre-crisis nominal value of the company is quite high but after crisis condition of the company slipped while nominal fixed. 32

52 From the above statement can be concluded that the decline in the condition of the company after the crisis is sometimes not immediately followed by a decrease in stock value. In fact, the nominal value of shares requires a certain time lag to changes according to the condition of the company after the decrease or increase in operational performance. This does not include the risk that comes from the presence of a particular issue or cause the movement of the stock price becomes abnormal. With such conditions, researchers not use Tobin's q as a measure of company performance, but researcher use profitability ratios for measured the company performance. Profitability ratios indicate the ability of the company assets to generate operating profits. Profitability ratios focus on measuring the performance of the company's current and profitability ratios are not tied to stock (Ferdiana, 2012). Most researchers consider Tobin's Q are better able to explain the actual state of the company. However, the high volatility of stock price due to the influence of various macroeconomic factors can have a big impact can affect the results of the calculation. This would not happen if we used profitability ratios, because of these considerations this study used as an indicator of performance, profitability ratios assessment indicates the overall efficiency and performance of the company. 33

53 B. Previous Research No. Researcher (Year) Title 1. Murhadi (2009) 2. Dyas Tri Pamungkas (2012) The effect of good governance practices against earnings management practices by companies Earnings management on firm value with good corporate governance as moderating variable Table 2.1 Previous Research Variable Similarity Difference Variable : Corporate Governance, Earnings Management Variable : Earnings Management, Managerial Ownership, Institutional Ownership, Firm Value Sample : Manufacture corpanies periode Sample : LQ-45 Index Companies Listed in Indonesian Stock Exchange Periode (Continue to next page) Result (Summary) The researcher found that only two variables significantly influence the earnings management practices that CEO duality and the existence of a controlling shareholder. While other independent variables such as independent directors, audit committee and also a shareholder coalition outside the controlling shareholders do not have any impact on earnings management practices in the company. The result of this research shows that earnings management has no influence toward firm value. However, corporate governance mechanism that measured by managerial ownership, institutional ownership and independent commissioner simultaneously affecting Firm value significantly. In partial, managerial ownership and institutional ownership are moderating variable in influence between earnings management and Firm value, while independent commissioner is not moderating variable in influence between earnings management and Firm value. 34

54 Table 2.1 Previous Research (Continued) No. Researcher (Year) Title Variable Similarity Difference Result (Summary) 4 Khaliq Ur Rehman Cheema and Muhammad Sadat Din (2013) Impact of Corporate Governance on Performance of Firms Variable : Corporate Governance, Firm Value Variable : Firm Value measurement by return on equity, return on assets, and earnings per share. The researcher found that CEO duality is negatively and significantly related to cement industry performance, as the performance indicator for firm is EPS. Family and non-family firms has also impact on cement firm s performance. Its shows that board size do not affect the performance of a firm. 5. Fauzan Kamil (2014) Earnings management on firm value with good corporate governance as moderating variable Variable : Earnings Management, Managerial Ownership, Institutional Ownership Board of Inndependent, Firm Value Sample : LQ-45 Index Companies Listed in Indonesian Stock Exchange Periode The result of this research shows that earnings management has no influence toward firm value. However, corporate governance mechanism that measured by managerial ownership, institutional ownership and independent commissioner simultaneously affecting Firm value significantly. In partial, managerial ownership and institutional ownership are moderating variable in influence between earnings management and Firm value, while independent commissioner is not moderating variable in influence between earnings management and Firm value. 35

55 C. Theoritical Framework Figure 2.1 Theoritical Framework Annual Report of All Listed Company on IDX as a Property and Real Estate Business Period Independent Variable Earnings Management Control Variable Dependent Variable Firm Value (Tobin s Q) Size of the Company Moderating Variables 1. Board of Directors 2. Managerial Ownership 3. Institutional Ownership (Continue to next page) 36

56 Figure 2.1 Theoritical Framework (Continued) Classic Assumption Test 1. Normality 2. Multicollinearity 3. Autocolleration 4. Heterocedasticity Hypothesis Test 6. Test Coefficient of Determination (R 2 ) 7. Multiple Regression Analysis 8. Simultaneous Significance Testing ( F-Test) 9. Partial Significance Test (t-test) Moderate Regression Analysis Analysis and Intepretation Conclusion 37

57 D. Hypothesis 1. Earnings Management and Firm Value As the manager of the company managers more aware of internal information and prospects of the company in the future compared to the owners (shareholders), giving rise to asymmetry of information. Managers are required to provide a signal about the state of the company to the owner. Given signal is a reflection of the firm value through the disclosure of accounting information such as financial reports. The financial report is important for external users because of the group's companies are in a condition that at least a high degree of certainty (Ali 2002). Asymmetry between the management and the owners give managers the opportunity to perform earnings management to increase the firm value at a given time so as to mislead the owners (shareholders) of the actual firm value. Sloan (1996) examined the nature of the information content of the accrual component and a component of cash flows is reflected in the share price. Proved that the performance of profits derived from accrual as a component of earnings management activities have lower persistence than cash flow. Reported earnings greater than the operating cash flow that can increase the firm value at this time. H1 : Earnings management have positive influence on firm value. 38

58 2. Corporate Governance and Firm Value In the perspective of agency theory, the agent is risk adverse and tend to be selfish would allocate resources from investments that do not increase the firm value to a more profitable investment alternatives. Problems agency will indicate that the firm value will rise if the owner of the company can control the behavior of the management in order not to waste resources companies, either in the form of investments that are not feasible or in the form of shirking. Corporate governance is a system that regulates and controls the company that is expected to provide and enhance the company's value to its shareholders. Thus, the implementation of good corporate governance is believed to increase the firm value. Klapper and Love (2002) found a positive relationship between corporate governance and corporate performance as measured by return on assets (ROA) and Tobin's Q. Another important discovery is that the application of corporate governance at the enterprise level is more meaningful in developing countries than in developed countries, It shows that companies that implement good corporate governance would gain greater benefit in countries with poor legal environment. H2 : Practice corporate governance positively influence jointly and partially to firm value. 39

59 3. Earnings Management, Corporate Governance and Firm Value The company that organizes corporate governance system is believed to limit opportunistic earnings management. Therefore, the higher the size of board of director, the proportion of managerial ownership ana institutional ownership reduce the tendency of earnings management. The negative relationship between corporate governance and earnings management may weaken the effect between earnings management and firm value. H3 : Earnings management influence on the firm value weakened by the practice of corporate governance. 40

60 CHAPTER III RESEARCH METHODOLOGY A. Scope of Research This research is empirical study of hypothesis testing with using causalities research method to determine the influence between the independent variables (variables that effect) and the dependent variable (the variable that is effected) with moderating variable. The independent variable in this research is earnings management. The dependent variable in this research is firm value and the corporate governance as moderating variable. This study aimed to examine the influence of Earnings management implementation towards the firm value and Corporate Governance as moderating variable, the study on real estate and properties companies listed in the Indonesian Stock Exchange (IDX) within Corporate governance proxies by Board of Director (BOD), Managerial Ownership (MO), Institutional Ownership (IO), and firm value measure by Tobin s Q. B. Sampling Method Sampling method is kind of method that take data from population. Sample is a part of the number, and characteristic possessed by the population. Research will not take all the populations, because due to limited funds, manpower and time. So, sample can represents the population (Sugiyono, 2009:5). The sampling method used in this research is purposive sampling 41

61 method. In purposive sampling this research use judgmental sampling by specific criteria (Sekaran, 2009:79). 1. The sample specific criteria in this research are as follow: 2. The company has published its annual report publicly within period All Real Estate business listed in IDX that use IDR currency. 4. The company has the data Board of Director (BOD), Managerial Ownership (MO), Institutional Ownership (IO), that will be tested in its annual report. C. Data Collection Method This research uses secondary data. This type of data obtained through research literatures which provide the theoretical basis and frame of mind to support primary data, as well as to support problem identification discussion (Indriantoro and Supomo, 2009:5). Secondary data refer to information gathered from sources that already exist (Sekaran and Bougie, 2010:81). This research data will be acquired from reports on the company s website, annual reports of company or the media reports. Secondary data used in this study are the annual report of real estate business listed on the Indonesia Stock Exchange in

62 D. Data Analyze Method The method of data analysis used in this study is a model of multiple regression analysis with the help of software SPSS 22 for Windows. Data analysis was performed by descriptive statistical analysis, classical assumptions test and hypothesis test. Classical assumptions test include normality test, multicollinearity test, heteroscedasticity test and autocorrelation test. Hypothesis test include multiple regression analysis, test of coefficient of determination, simultaneous significance test and partial significance test. 1. Descriptive Statistical Analysis Descriptive analysis is used to provide an overview of the study variables. Descriptive statistics were used, among others, mean, median, minimum, maximum, and standard deviation (Ghozali, 2013:19). Statistical analysis was used to test the quality of the data and testing hypotheses. Statistical analyzes were performed was the classic assumption test and hypothesis test. The data in this study were analyzed with descriptive statistics. Descriptive statistical testing in this research basically is a process transformation research data in a form of tabulation in order that can be easier to be understood and interpreted. Tabulation in generally is used by researcher to obtain information about characteristics of primary variable in research. The measurement applied in this descriptive statistical testing 43

63 depends on the type of scale of measurement. The descriptive statistical testing obtains a picture or describes data that can be seen from median, mean, mode, standard deviation, variance, maximum and minimum. 2. Classic Assumptions Test Classical test assumption aims to determine the relationship between the variables in the data. Before conducting regression analyzes, first tested the classical assumptions to determine whether there is a relationship between the variables. a. Normality Test Normality test aims to test whether the regression model, or residual confounding variable has a normal distribution. There are two ways to detect whether or not residual normal distribution, i.e. the graph analysis and statistical tests (Ghozali, 2013: 160). Normality test can use the tools such as statistical tests to Kolmogorov-Smirnov Z (1 - Sample KS), the basic decision-making (Ghozali, 2013: 164): 1) If the value Asymp. Sig. (2-tailed) less than 0.05, then H0 is rejected. This means that the data are not normally distributed residuals. 2) If the value Asymp. Sig. (2-tailed) of more than 0.05, then H0 is accepted. This means that the data were normally distributed residuals. 44

64 Another way to normality test can be done by looking at the spread of the data (dots) on the diagonal axis of the graph or by looking at the histogram from the residual. Basic decision-making, namely (Ghozali, 2013: 163): 1) If the point spread around the diagonal line and follow the direction of the diagonal line, the regression model to meet the assumptions of normality. 2) If the point spread away from the line or diagonal and do not follow the direction of the diagonal line, the regression model did not meet the assumptions of normality. b. Multicollinearity Test Multicollinearity test aims to test whether the regression model found a correlation between the independent variables (Ghozali, 2013:105). A good regression model should not happen correlation between the independent variables. To detect the presence or absence of multicollinearity in the regression model can be seen from the value of tolerance and the Variance Inflation Factor (VIF). Multicollinearity views of the tolerance value <0.10 or VIF> 10. Both of these measurements indicate each independent variable which is explained by the other independent variables. 45

65 c. Autocorrelation Test Autocorrelation test aims to test something, in a linear regression model. There is a correlation between the error of a bug in the period t to bug errors t-1 period or previous period (Ghozali 2013:110). Diagnose the autocorrelation done through testing to test the value of Durbin Watson (DW test) by (Ghozali 2013:111). Basis for decisionmaking as follows: 1) If 0 < DW< DL there is any positive autocorrelation. 2) If DL < Dw < Du or 4-Du < D < 4-DL uncertain conclusion. 3) If 4-DL < Dw < 4 there is any negative autocorrelation. 4) If 0 < Dw < DL or Du < Dw < 4-Du there is no autocorrelation. d. Heteroscedasticity Test According to Ghozali (2013 : 139), the aim from heteroscedasticity test is to test whether the regression model occur the variance inequality of the residual from one observation to another observation. If the variance from residual of one observation to other observations is fixed, it is called homocedasticity and if it different called heteroscedasticity. The presence of heteroscedasticity can be seen from the graph Scatterplot between the predicted value of the dependent variable is ZPRED with residual SRESID. If there is a pattern like dots are there forms a particular pattern of regular, then there 46

66 heteroscedasticity. Conversely, if there is no clear pattern as well as points that spread then there is no heteroscedasticity. 3. Hypotesis Testing a. Test Coefficient of Determination ( R 2 ) The coefficient of determination (R 2 ) was essentially measure how far the model's ability to explain variation in the dependent variable. Determination coefficient is between zero and one. Small value of R 2 is the ability of independent variables in explaining the dependent variable is very limited. Value close to one means that the independent variable gives almost all the information needed to predict the variation in the dependent variable (Ghozali, 2013: 97). Coefficient determination is a statistical measurement of how well the regression line approximates the real data point. By knowing the value of R 2, It can determine the magnitude contribution of independent variables toward the dependent variable. R 2 expresses a value between zero and one. If R 2 is near to 0, most of data variations cannot be explained by the regression model. In this case, the regression model fits the data poorly. On the other hand, if R 2 is near to 1, most of the variation in the dependent variable can be explained by the regression model. In other words, the regression model fits the data well (Sekaran, 2010). 47

67 The closer adjusted R 2 score to 1, the better independent variables explaining dependent variable The hypothesis in this study is influenced by the value of the corresponding variable coefficient significance after testing. Conclusion the hypothesis made by t-test. b. Multiple Regression Analysis Multiple regression analysis is used to test the effect of two or more independent variables toward the dependent variable (Ghozali, 2013 : 96 ). Regression analysis divided into two kinds, simple regression analysis (if there is only one independent variable) and multiple regression analysis (if there is more than one independent variables). Multiple regression analysis can be measured partially (indicated by coefficient of partial regression) jointly indicated by coefficient of multiple determination or R 2 (Indriantoro and Supomo, 2002). c. Simultaneous Significance Testing ( F-Test) Essentially, F-test has purpose to know whether among independent variables simultaneously have significant influence toward dependent variable (Ghozali, 2013: 98). Independent variables in this research are good corporate governance indicator and ownership structure whereas dependent variable is company performance. So, F- test has a function to know the effect of good corporate governance on company performance. α used for this research is 0.05 ( 5%) with assumption: 48

68 1) If sig 5%, ho is accepted. 2) If sig < 5%, ho is rejected. d. Partial Significance Test ( t-test) Partial Significance Test or t-test basically has purpose to know how far and how much the influence independent variables on dependent variables (Ghozali, 2013:98). In this research, t-test is done to know the effect of good corporate governance as independent variables on company performance as dependent variable. Assumption used for this test are if the significance value of t more than α (significance value > α), then hypothesis is rejected but if on contrary the significance value of t less than α (significance value < α), so hypothesis is accepted. Level of significance (α) use in this research is 0.05 (5%). e. Moderated Regression Analysis (MRA) The purpose of this analysis to determine whether the moderating variables will strengthen or weaken the relationship between independent variables and the dependent variable. Moderated Regression Analysis (MRA) is a specific application of multiple linear regression where the regression equation contains elements of interaction (multiplication of two or more independent variables). 49

69 E. Definition of Operational Research Operational variable is a way to set up a concept and how the concept should be measured so that there are variables that can lead to other problems of a variable depends on the situation and condition of other variables. Operational variables based on the nature of the attributes of the object observed in the study, can form both qualitative and quantitative researchers made merely for the purpose of research, after understanding the attributes based on the support of various runway. 1. Independent Variables The independent variable is the type of variables that explain or influence another variable or variables suspected as the caue of the dependent variable (Indriantoro and Supomo, 2009: 64). The independent variables in this research is earnings management thet proxy by discretionary accrual using Jones model that modified Dechow et.al (Dechow et.al in Herawaty, 2008) with the following step : a) Total Accrual TAC = NIit CFOit Description : NIit = Net income company i on periode t CFOit = cash flow of operation company i on periode t 50

70 b) Total accruals are estimated with a regression equation OLS (Ordinary Least Square) TAit/Ait-1 = β1 (1/Ait-1 ) + β2 (Δ Revit/Ait-1 ) + β3 (PPEit/Ait- 1 ) + e Description : TAit = Total accrual in period t Ait-1 = Total asset period t-1 ΔRevit PPEit β1 β2 β3 = Changes in income / net sales in period t = Property, plant and equipment period t = Koefisien correllation. c) Non accrual discretionary NDAit = β1(1/ait-1 ) + β2(δrevit/ait-1-δrecit/ait-1) + β3(ppeit/ait-1) + e Description : ΔRecit β1 β2 β3 = Changes in net debt in period t = Fitted coefficient obtained from the regression results in the calculation of total accrual. d) Discretionare total accrual DAit = TAit /Ait-1 NDAit 51

71 Description : TAit = Total accrual year t NDAit = Non accrual discretionare in year t 2. Dependent Variable Dependent variable is type of variables that explained or influenced by other variables or variable expected as a result of the independent variable (Indriantoro and Supomo, 2009:159). Dependent variable used in this research is firm value. Tobin s Q is used to measure firm value. According to Ma & Tian (2009), Tobin s Q has the advantage of reflecting the firm s current value and future profitability potential. According to Vinola Herawati (2008), firm value can be measured by Tobin Q which is formulated as : Q = EMV + D EBV + D Description : Q = Firm value EMV = Equity Market Value EBV D = Equity Book Value = The book value of the total debt. 52

72 3. Moderating Variable The moderating variable is the one that has strong contingent effect on the independent variable-dependent variable relationship. That is, the presence of a third variable (the moderating variable) modifies the original relationship between the independent and the dependent variables (Sekaran 2010:73). a. Board of Directors (BOD) is fully responsible for the management of the company effective and efficient in order to achieve the company's goals. Therefore, According to Linck et al (2008) Board of Directors size measured by the number of Board of Directors member in the company. b. Managerial ownership (MO) is the ownership by the shareholders who have a management position in the company like directors and commissioners. According to Setyawan, (1999) in Faisal, (2004) The Managerial ownership measured by the total percentage of managerial ownership in a company. c. Institutional Ownership (IO) is ownership by the government, financial institutions, incorporated institutions, foreign institutions, and other institutions in a company. According to Muwaningsari (2007) stated that the Institutional ownership is measured by the total percentage of institutional ownership in a company. 53

73 Table 3.1 Summary of variable operational research No Variable Measure Scale Total number of board 1 Earnings Management Ratio director 2 Board of Directors (BOD) 3 Managerial ownership (MO) The total number of board of directors members % of shares owned by managerial Rasio Rasio 4 Institutional Ownership (IO) % of shares owned by institutional Rasio 5 Firm Value Tobin s Q = Rasio 54

74 CHAPTER IV RESULT AND ANALYSIS A. General Description of Research Object This chapter presents and discusses the findings of the research. The population of this research is real estate business listed in IDX within period The selection of sample is chosen by criteria of population that have explained in research methodology in previous chapter that is taken as annually in In , Real estate business that go public in Indonesia Stock Exchange are 50 companies. This research is used purposive sampling. And from 50 companies, regarding on criteria of sampling in previous chapter, so the amount of sampling are 12 companies. This research will use pooling data method in which the variable will be tasted in three year, so the total sample are 36 samples of annual report. Companies that become the sample is the company that fulfill the criteria of the sample in this research: 55

75 Table 4.1 Sample Selection No. Criteria Number 1 Population real estate business 50 2 Real estate business that do not have institutional ownership (38) Total sample of companies 12 Total sample of annual report used in this Research Source : Data Process Table 4.2 List of Companies Sample 36 No Company Code 1 Agung Podomoro Land Tbk. APLN 2 Bekasi Fajar Industrial Estate Tbk. BEST 3 Bukit Darmo Property Tbk. BKDP 4 Ciputra Development Tbk. CTRA 5 MNC Land Tbk. KPIG 6 Lamicitra Nusantara Tbk. LAMI 7 Indonesia Prima Property Tbk. OMRE 8 Pudjiati Prestige Tbk. PUDP 9 Pakuwon Jati Tbk. PWON 10 Rista Bintang Mahkota Sejati Tbk. RBMS 11 Roda Vivatex Tbk. RDTX 12 Summarecon Agung Tbk. SMRA Source : Data Process 56

76 B. Analysis and Discussion The data processing in this research is conducted by the statistical application. The application used for data processing in this research is SPSS 22.0 version. 1. Descriptive Statistics Descriptive statistics provide an overview of the minimum value, maximum value, average value (mean) and standard deviation of the data used in the study. Table 4.3 Descriptive Statistics N Minimum Maximum Mean Std. Deviation EM 36 -,01,02,0009,00603 BOD 36 2,00 9,00 5,6111 2,34555 MO 36,01 56,70 8, ,69764 IO 36 19,18 92,88 59, ,77275 TobinsQ 36,24 2,97 1,1526,67146 Size 36 24,08 30,87 27,8583 1,95453 Valid N (listwise) 36 Source : Output SPSS 22.0 Based on table 4.1 above, the variables of research can be described as follows: a. Dependent Variable Variable TobinsQ has an average The minimum value is.24 the name of the company is PT Pudjiati Prestige Tbk. and the 57

77 maximum value is 2.97 that is PT Bekasi Fajar Industrial Estate Tbk., where as the standard deviation value is b. Independent Variable 1) Earnings Management (EM) Variable earnings management has an average The minimum value is -0.1 that is PT Rista Bintang Mahkota Sejati Tbk and the maximum value is 0.02 that is PT Rista Bintang Mahkota Sejati Tbk., where as the standard deviation value is ) Board of Director (BOD) Variable Board of Director as an average The minimum value is 2.00 that is PT Bumi Serpong Damai Tbk and the maximum value is 9.00 that is PT Agung Podomoro Land Tbk, PT Ciputra Development Tbk and PT Summarecon Agung Tbk, whereas the standard deviation value is ) Managerial Ownership (MO) Variable Managerial Ownership has an average The minimum value is 0.01 that is PT Lamicitra Nusantara Tbk and the maximum value is that is PT Rista Bintang Mahkota Sejati Tbk, whereas the standard deviation value is

78 4) Institutional Ownership (IO) Variable Institutional Ownership has an average The minimum value is that is PT. Rista Bintang Mahkota Sejati Tbk and the maximum value is that is PT Lamicitra Nusantara Tbk, whereas the standard deviation value is ) Size of Company Variable size of company has an average The minimum value is that is PT Rista Bintang Mahkota Tbk and the maximum value is that is PT MNC Land Tbk, whereas the standard deviation value is Classical Assumtion Test a. The Result of Normality Test Normality Data test aims to test whether the dependent variable and independent variables both have a normal distribution or not in the regression model. The statistical test that can be used to test whether the residuals are normally distributed non-parametric test statistic Kolmogorov-Smirnov (KS) by making hypotheses : H0: the data were normally distributed residuals Ha: the data not normally distributed residuals. 59

79 If the significance value greater than 0.05 then H0 is accepted and Ha rejected, otherwise if the significance value is less than 0.05 then H0 rejected and Ha accepted. The results of the normality data test using Kolmogorov-Smirnov (KS) can be shown in the following table: Table 4.4 One-Sample Kolmogorov-Smirnov Test (Model 1) Unstandardized Residual N 36 Normal Parameters a,b Mean, Std. Deviation, Most Extreme Differences Absolute,147 Positive,147 Negative -,088 Test Statistic,147 Asymp. Sig. (2-tailed),048 c Source : Output SPSS 22.0 Table 4.5 One-Sample Kolmogorov-Smirnov Test (Model 2) Unstandardized Residual N 36 Normal Parameters a,b Mean, Std. Deviation, Most Extreme Differences Absolute,123 Positive,123 Negative -,065 Test Statistic,123 Asymp. Sig. (2-tailed),182 c Source : Output SPSS

80 Table 4.6 One-Sample Kolmogorov-Smirnov Test (Model 3) Unstandardized Residual N 123 Normal Parameters a,b Mean, Std. Deviation, Most Extreme Differences Absolute,063 Positive,040 Negative -,063 Test Statistic,063 Asymp. Sig. (2-tailed),200 c,d Source : Output SPSS 22.0 Based on the results of statistical tests with models such as the Kolmogorov-Smirnov contained in table can be seen from the significance value of model 1 is 0.048, the significance value of model 2 is and the significance value of model 3 is In table model 1 the significance value is that means that the data not normally distributed because less than But refers to the assumption of the Central Limit Theorem Dielman (1961) in Ghozali which states that for a large sample, especially more than 30 distribution of samples considered close to the normal distribution, which means that even on the classic assumption test in the form of normality test indicates that there is data distribution is not normal but because observation of more than 30 then the data will still be considered normal, because the use of 12 companies with 36 observation of the sample. 61

81 Normally distributed data can also be viewed using a normal plot of the standardized residuals probably, the result is shown in Figure below: Figure 4.1 (Model 1) Source : Output SPSS

82 Figure 4.2 (Model 2) Figure 4.3 (Model 3) Source : Output SPSS

83 Based on Figure above it can be seen that the points spread around the diagonal line and follow the direction of a diagonal spread. Thus it can be stated that the distribution of the data close to normal or have met the assumptions of normality. It can also be viewed using the histogram graph as follows: Figure 4.4 (Model 1) Source : Output SPSS

84 Figure 4.5 (Model 2) Figure 4.6 (Model 3) Source : Output SPSS

85 Histogram graph showing a normal distribution pattern because the graph does not deviate to the left or off to the right. b. The Result of Multicollinearity Test Multicollinearity test is used to test the existing of perfect relationship or near-perfect relationship between the independent variables the regression model. Detection of multicollinearity can be seen, that if the value of Variance Inflation Factor (VIF) of not more than 10 and the value of tolerance is no less than 0.1, it can be said to be free of multicollinearity. VIF values and tolerance of other research variables can be seen from the following table. Table 4.7 Multicollinearity Test (Model 1) Coefficients a Collinearity Statistics Model 1 (Constant) Tolerance VIF EM,975 1,025 Size,975 1,025 a. Dependent Variable: TobinsQ Source : Output SPSS

86 Table 4.8 Multicollinearity Test (Model 2) Coefficients a Collinearity Statistics Model 1 (Constant) Tolerance VIF BOD,553 1,807 MO,382 2,617 IO,581 1,721 a. Dependent Variable: TobinsQ Source : Output SPSS 22.0 Table 4.9 Multicollinearity Test (Model 3) Coefficients a Collinearity Statistics Model 1 (Constant) Tolerance VIF EM,013 79,666 BOD,521 1,920 MO,187 5,361 IO,408 2,449 Size,392 2,551 EM_BOD,072 13,876 EM_MO,081 12,359 EM_IO,045 22,053 a. Dependent Variable: TobinsQ Source : Output SPSS 22.0 Based on table above, it can be concluded this research There multicollinearity problems on table 3. Where variance inflation factor (VIF) of earning management (EM) is , board of commissioner 67

87 moderate (EM_BOD) is , board of director moderate (EM_MO) is , and audit commitee moderate (EM_IO) is Multicollinearity in the regression model can be ignored because of the correlation between the independent variables that occur due to the interaction between the independent variables (Herawati, 2008). c. The Result of Autocorrelation Test Autocorrelation test is used to detect the internal correlation among the groups of a series observation arrange in a series of place and time. Based on Ghozali (2013: 111), the criteria for the assessment of the auto correlation are: 1) If 0 < Dw < DL there is any positive autocorrelation. 2) If DL < Dw < Du or 4-Du < D < 4-DL uncertain conclusion. 3) If 0 < Dw < DL or Du < Dw < 4-Du there is no autocorrelation. 4) If 4-DL < Dw < 4 there is any negative autocorrelation. The basic of decision making in this test are based on Durbin- Watson Test, which can be seen in the table below: 68

88 Table 4.10 Autocorrelation Test (Model 1) Model Summary b Model Durbin-Watson 1 2,325 Source : Output SPSS 22.0 From the table model 1 above, note that the value obtained for DW 2.325, Compare the values with the values of the table using 5% significance which means including the third criteria, (Du=1.442< Dw=2.325 < 4-Du=2.558) so it can be concluded that the regression model 1 free from autocorrelation. Table 4.11 Autocorrelation Test (Model 2) Model Summary b Model Durbin-Watson 1 1,863 Source : Output SPSS 22.0 From the table model 2 above, note that the value obtained for DW 1.863, Compare the values with the values of the table using 5% significance which means including the third criteria, (Du=0.766< Dw=1.863 < 4-Du=3.234) the regression model 2 there is free from autocorrelation. 69

89 Table 4.12 Autocorrelation Test (Model 3) Model Summary b Model Durbin-Watson 1 2,337 Source : Output SPSS 22.0 From the table model 3 above, note that the value obtained for DW 2.337, Compare the values with the values of the table using 5% significance which means including the third criteria, (Du=1.925< Dw=2.337 < 4-Du=1.925) so it can be concluded that the regression model 3 there is little autocorrelation in region without decision. This is possible because the explanatory variables omitted from the model (Rahayu 2009). d. The Result of Heteroscedasticity Test The presence of heteroscedasticity can be seen from the graph Scatterplot on the basis of the analysis as follows: 1) If there is a specific pattern, such as dots form a pattern of certain existing regular (wavy, widened and then narrowed), then the indicate has occurred heteroskedastisitas. 2) If there is a clear pattern, as well as the points spread above and below the number 0 on the Y axis, then there is no heteroscedasticity. 70

90 The result of heteroscedasticity test can be shown in the figure as follow : Figure 4.7 Source : Output SPSS 22.0 Figure 4.8 Source : Output SPSS

91 Figure 4.9 Source : Output SPSS 22.0 Based on Figure 4.3 it can be seen that the points spread below and above the number 0 on the Y axis and does not form a specific pattern, which means that there is no heteroscedasticity in regression models. 3. Hypotesis Testing a. Test Coefficient of Determination ( R 2 ) In multiple linear regression test were analyzed also the coefficient of determination (R 2 ). Coefficient of determination used in this study to see the influence of the independent variable and moderating variable to dependent variable. Value of the correlation coefficient (R) shows how much correlation or relationship between the independent variables with the dependent variable. The criteria of correlation according to Sarwono (2014: 100) are: 72

92 Table 4.13 Criteria of Correllation Coefficient VALUE INFORMATION 0 No correlation between variable > Very weak correlation > Fairly strong correlation > Strong correlation > Very strong correlation 1 Perfectly correlation Table 4.14 Model Summary b Model R R Square Adjusted R Square Std. Error of the Estimate 1,816 a,665,645,40015 a. Predictors: (Constant), Size, EM b. Dependent Variable: TobinsQ Source : Output SPSS 22.0 Table 4.14 shows that the correlation coefficient (R) for 0.816, which means that the correlation between the dependent variable with the independent variables are very strong correlation based on the criteria correlation coefficient value ( > ) is very strong correlation. Adjusted R Square value or coefficient of determination is equal to This table show that earnings management variable and size of company variable can explain 64.5% of the amount of value of company. While 35.5% (100%-64.5%) is explained by other variables that are not investigated in this study e.g. Loss Loan Provision (LLP), Loan Charge-Off (LCO), Loss Loan Allowance (LLA) and other things. 73

93 Table 4.15 Model Summary b Model R R Square Adjusted R Square Std. Error of the Estimate 1,654 a,428,374,53117 a. Predictors: (Constant), IO, BOD, MO b. Dependent Variable: TobinsQ Source : Output SPSS 22.0 Table 4.15 shows that the correlation coefficient (R) for 0.654, which means that the correlation between the dependent variable with the independent variables are strong correlation based on the criteria correlation coefficient value ( > ) is strong correlation. Adjusted R Square value or coefficient of determination is equal to This table show that board of director, managerial ownership and institutional variable can explain 37.4% of the amount of value of company. While 62.6% (100%-37.4%) is explained by other variables that are not investigated in this study e.g. Audit Committee, Board of Commissioner Board of Independent and othe things. Table 4.16 Model Summary b Model R R Square Adjusted R Square Std. Error of the Estimate 1,863 a,746,670,38565 a. Predictors: (Constant), EM_IO, IO, BOD, EM_MO, Size, EM_BOD, MO, EM b. Dependent Variable: TobinsQ Source : Output SPSS 22.0 Table 4.16 shows that the correlation coefficient (R) for 0.863, which means that the correlation between the dependent variable with 74

94 the independent variables are very strong correllation based on the criteria correlation coefficient value ( > ) is very strong correlation. Adjusted R Square value or coefficient of determination is equal to This table show that earnings management, size of company, and earnings management that moderate with board of director, managerial ownership and institutional ownership variable can explain 67% of the amount of value of company. While 33% (100% - 67%) is explained by other variables that are not investigated in this study e.g. Audit Committee, Board of Commissioner, Board of Independent and othe things. b. Multiple Regression Analysis This research show that the effect of earnings management and good corporate governance indicator on company performance (TobinsQ). Here is the result of multiple regression analysis : Table 4.17 Multiple Regression Analysis (Model 1) Coefficients a Unstandardized Coefficients Model B Std. Error 1 (Constant) -6,738,977 EM -14,085 11,348 Size,284,035 a. Dependent Variable: TobinsQ Source : Output SPSS

95 From table 4.17 above stated that the Earnings Management (EM) negatively affect the company value (TobinsQ) and size of company positively affect the company value (TobinsQ). It can be seen the relation between Earnings Management (EM), and size of company to company value (TobinsQ) as follow : TobinsQ = Size + e From the multiple linear regression equation above, it can be explained for each variable as follow : 1) Constant at units stated that if there is effect or unchanged in X1 and X2 (EM and SIZE) then the value of company value will be ) Regression coefficient of variable X1 (EM) it shows that the effect of earnings management on the company value is negative or opposite direction, which means that if the value of the earnings management variables change increased by one point, then the value of company performance will decrease by , with assumption other independent variables remain or unchanged. 3) Regression coefficient of variable X2 (SIZE) it shows that the effect of size of company on the company value is positive or parallel, which means that if the value of the size of the company variables change increased by one point, then the value of 76

96 company value will increase 0.284, with assumption other independent variables remain or unchanged. Table 4.18 Multiple Regression Analysis (Model 2) Coefficients a Unstandardized Coefficients Model B Std. Error 1 (Constant) 2,956,568 BOD -,117,051 MO -,043,009 IO -,013,005 a. Dependent Variable: TobinsQ Source : Output SPSS 22.0 From table 4.18 above stated that the board of director (BOD), managerial ownership (MO), and institutional ownership (IO) negatively affect the company value (TobinsQ). It can be seen the relation between board of director (BOD), managerial ownership (MO), and institutional ownership (IO) to company value (TobinsQ) as follow : TobinsQ = BOD MO IO+ e From the multiple linear regression equation above, it can be explained for each variable as follow : 1) Constant at units stated that if there is effect or unchanged in X3, X4 and X5 (BOD, MO and IO) then the value of company value will be

97 2) Regression coefficient of variable X3 (BOD) it shows that the effect of board of director on the company value is negative or opposite direction, which means that if the value of the board of director variables change increased by one point, then the value of company value will decrease by , with assumption other independent variables remain or unchanged. 3) Regression coefficient of variable X4 (MO) it shows that the effect of board of director on the company value is negative or opposite direction, which means that if the value of the of managerial ownership variables change increased by one point, then the value of company value will decrease by , with assumption other independent variables remain or unchanged. 4) Regression coefficient of variable X5 (IO) it shows that the effect of institution ownership on the company value is negative or opposite direction, which means that if the value of the institution ownership variables change increased by one point, then the value of company performance will decrease by , with assumption other independent variables remain or unchanged. 78

98 Table 4.19 Multiple Regression Analysis (Model 3) Coefficients a Unstandardized Coefficients Model B Std. Error 1 (Constant) -6,329 1,737 EM -131,775 96,411 BOD -,081,039 MO -,009,010 IO -,003,004 Size,293,053 EM_BOD 10,085 7,338 EM_MO 1,709 1,176 EM_IO,789,956 a. Dependent Variable: TobinsQ Source : Output SPSS 22.0 From table 4.19 above stated that the board of director moderate on earnings management (EM_BOD), managerial ownership moderate on earnings management (EM_MO) and institutional ownership moderate on earnings management (EM_IO) positively affect the company value. It can be seen the relation between board of director moderate on earnings management (EM_BOD), managerial ownership moderate on earnings management (EM_MO) and institutional ownership moderate on earnings management (EM_IO) to company value (TobinsQ) as follow : TobinsQ = EM_BOD EM_MO EM_IO + e 79

99 From the multiple linear regression equation above, it can be explained for each variable as follow : 1) Regression coefficient of variable X6 (EM_BOD) it shows that the effect of board of director moderate on earnings management on the company value is positive or paraller, which means that if the value of the board of director moderate on earnings management variables change increased by one point, then the value of company value will increase by , with assumption other independent variables remain or unchanged. 2) Regression coefficient of variable X7 (EM_MO) it shows that the effect of managerial ownership moderate on earnings management on the company value is positive or paraller, which means that if the value of the of managerial ownership moderate variables change increased by one point, then the value of company value will increase by 1.709, with assumption other independent variables remain or unchanged. 3) Regression coefficient of variable X8 (EM_IO) it shows that the effect of institutional ownership moderate on earnings management on the company value is positive or paraller, which means that if the value of the institutional ownership variables change increased by one point, then the value of company 80

100 performance will increase by 0.789, with assumption other independent variables remain or unchanged. c. Simultaneous Significant Test (F-Test) The F test of hypothesis testing is used to see whether the overall independent variables have a significant effect on the dependent variable. From the test results simultaneously obtained as follows: Table 4.20 Simultaneous Significant Test (Model 1) ANOVA a Model Sum of Squares df Mean Square F Sig. 1 Regression 10, ,248 32,777,000 b Residual 5,284 33,160 Total 15, a. Dependent Variable: TobinsQ b. Predictors: (Constant), Size, EM Source : Output SPSS 22.0 From the table 4.20, the results of the calculation of the F test statistic is with probability Because the probability is smaller than 0.05, which means regression model can use to predict company value or earnings management (EM and size of company variables significant and simultaneously effect to company value (TobinsQ). 81

101 Table 4.21 Simultaneous Significant Test (Model 2) ANOVA a Model Sum of Squares df Mean Square F Sig. 1 Regression 6, ,250 7,976,000 b Residual 9,029 32,282 Total 15, a. Dependent Variable: TobinsQ b. Predictors: (Constant), IO, BOD, MO Source : Output SPSS 22.0 From the table 4.21, the results of the calculation of the F test statistic is with probability Because the probability is smaller than 0.05, which means regression model can use to predict company value or board of director (BOD), managerial ownership (MO) and institutional ownership variables significant and simultaneously effect to company value (TobinsQ). Model Table 4.22 Simultaneous Significant Test (Model 3) ANOVA a Sum of Squares df Mean Square F Sig. 1 Regression 11, ,471 9,888,000 b Residual 4,016 27,149 Total 15, a. Dependent Variable: TobinsQ b. Predictors: (Constant), EM_IO, IO, BOD, EM_MO, Size, EM_BOD, MO, EM Source : Output SPSS 22.0 From the table 4.22, the results of the calculation of the F test statistic is with probability Because the probability is smaller than 0.05, which means regression model can use to predict 82

102 company value or board of director moderate on earnings management (EM_BOD), managerial ownership (EM_MO) moderate on earnings management and institutional ownership (EM_IO) moderate on earnings management (EM_AC) variables significant and simultaneously effect to company value (TobinsQ). d. Significant Partial Test (T-Test) Statistical t-test performed to further investigate which of the independent variables in influencing the dependent variable. The hypothesis that will be tested as follows: Table 4.23 Partial Test Result (Model 1) Coefficients a Unstandardized Coefficients Standardized Coefficients Model B Std. Error Beta t Sig. 1 (Constant) -6,738,977-6,898,000 EM -14,085 11,348 -,127-1,241,223 Size,284,035,826 8,096,000 a. Dependent Variable: TobinsQ Source : Output SPSS

103 Table 4.24 Partial Test Result (Model 2) Coefficients a Unstandardized Coefficients Standardized Coefficients Model B Std. Error Beta t Sig. 1 (Constant) 2,956,568 5,201,000 BOD -,117,051 -,409-2,273,030 MO -,043,009-1,016-4,697,000 IO -,013,005 -,443-2,525,017 a. Dependent Variable: TobinsQ Source : Output SPSS 22.0 By Seeing Table above, the results of significant test partial (T-Test) are as follows: 1) Earnings Management Variable Earnings management on table 4.23 has a significant level greater than the significant standard level Coefficient regression for earnings management is which shows a negative direction to company value that indicate if earnings management change increased by one point, then the fim value will decrease by This describe that earnings management have negative effect not significant on company value. Earnings management is the management's efforts to change the financial statements aimed at misleading the shareholders who want to know the performance of the company or to influence contractual outcomes that rely on accounting 84

104 numbers that report. Nonetheless, as an earnings management action to increase or decrease profit by selecting accounting policies by management that are subjective, then the earnings management, especially in the long run will reduce the firm value. Based on agency theory that an agency relationship may create conflicts of interest between the owner and the manager. contract made with the hope to minimize conflicts of interest. The results of this study found that earnings management actions carried out by the manager would not give a favorable reaction that will have an impact on increasing the firm value that reflected in the company's stock price. So, when the goal that owned by manager and investor are different the agency conflict cannot be avoided in the company. The management will be detrimental to the owners of capital to behave unethically in conducting the accounting fraud. Agency conflicts that occur within a company can have an impact on the quality of the profit generated, it is because the managers will act opportunistic. Earnings are opportunistic certainly be detrimental to some parties who have a low quality will not represent the information that actually represent. Thus earnings are low-quality highly detrimental to the investors and the 85

105 company will alsodeprimental because it is related to the firm value that reflected in the price of shares traded. The results of this study are consistent with research by Herawaty (2008), Pamungkas (2012), and Kamil (2014) that state earnings management negatively affect the firm value. 2) Size of Company Variable Size of company has a significant level smaller than the significant standard level Coefficient regression for size of company is which shows positive direction to company value that indicate if size of company change increased by one point, then the value of company performance will decrease by This describe that size of company had a significant effect on company performance. The results of this study are consistent with research by Herawaty (2008) that state the size of the company has a positive influence on the value of the company, the larger the company the greater the value of the company. 3) Board of Director Variable Board of commissioner has a significant level greater than the significant standard level Coefficient regression for board of director is which shows a negative direction to company value that indicate if board of director change increased by one point, then the value of company performance 86

106 will decrease by This describe that board of director have negative effect significant on company value. The company has a large of board of director size cannot do the coordination, communication, and decision-making better than the company that has a smaller board of director. The results of this study are consistent with research by Febriyanto (2013), Amyulianthy (2012), Dalton et.al.(1999) find the effect between Board of Directors size and company performance. 4) Managerial Ownership Variable Board of director has a significant level smaller than the significant standard level Coefficient regression for managerial ownership is which shows a negative direction to company value. This describe that board of director have negative effect significant on company value. That indicate if board of director change increased by one point, then the value of company performance will decrease by Managerial ownership is a mechanism to reduce agency problems of managers, by aligning the interests of managers and shareholders (Jensen and Meckling, 1976 in Herawaty, 2008). Thus, if the manager is expected to have the company's shares are high, is expected to improve the company's performance as a manager will be more motivated to improve their performance as a result of reciprocity will be accepted the 87

107 manager will increase with the improved performance of the company which will increase the stock price and the value of the company. However, Siswantaya (2007) argues when managerial ownership of a company is too high, it will cause security problems. This means that if the managerial ownership is too high, the manager will have a strong position in controlling the company, and external parties will find it difficult to control the actions of managers. The results of this study are consistent with research by Siallagan and Machfoedz (2006) and Kamil (2014) that state managerial ownership is statistically negative effect on firm value. 5) Institutional Ownership Variable Institutional ownership has a significant level smaller than the significant standard level Coefficient regression for board of commissioner is which shows a negative direction to company value. This describe that institutional ownership had negative effect significant on company performance. That indicate if institutional ownership change increased by one point, then the value of company performance will decrease by The majority owner of the institution involved in the control of companies that tend to act in their own interests although sacrifice the minority owners so in long term can make the firm value will be decrease. The results of 88

108 this study are consistent with research by Sudarma (2003), Sujoko and Soebiantoro (2007) that found that institutional ownership have negative effect to company value. This result contrast with Kamil (2014) that state institutional ownership have positive significant effect to firm value. a. Moderate Regression Analysis Table 4.25 Partial Test Result (Model 3) Coefficients a Unstandardized Coefficients Standardized Coefficients Model B Std. Error Beta t Sig. 1 (Constant) -6,329 1,737-3,643,001 EM -131,775 96,411-1,184-1,367,183 BOD -,081,039 -,284-2,108,044 MO -,009,010 -,205 -,912,370 IO -,003,004 -,088 -,579,567 Size,293,053,854 5,509,000 EM_BOD 10,085 7,338,497 1,374,181 EM_MO 1,709 1,176,496 1,454,158 EM_IO,789,956,376,825,417 a. Dependent Variable: TobinsQ Source : Output SPSS ) Board of director moderate Variable Board of director moderate has a significant level greater than the significant standard level Coefficient regression for board of director moderate is which shows a positive direction to company value. This describe that board of 89

109 director have positive effect significant on company value. That indicate if board of director moderate change increased by one point, then the value of company performance will increase by The result show that earnings management to firm value weakens by board of director as moderating variable. 2) Managerial Ownership moderate Variable Managerial ownership moderate has a significant level greater than the significant standard level Coefficient regression for board of director moderate is which shows a positive direction to firm value. This describe that managerial ownership have positive effect significant on company value. That indicate if managerial ownership change increased by one point, then the value of company performance will increase by The result show that earnings management to firm value weakens by managerial ownership as moderating variable. 3) Institutional Ownership moderate Variable Institutional ownership moderate has a significant level greater than the significant standard level Coefficient regression for board of director moderate is which shows positive direction to company value. This describe that institutional ownership moderate have positive effect not significant on company value. That indicate if institutional ownership moderate change increased by one point, then the 90

110 firm value will increase by The result show that earnings management to firm value weakens by institutional ownership as moderating variable. The results of this study reinforce previous research by Herawaty (2008) and the Dervish (2010) which states that the Institutional Ownership has a positive influence on the relationship between earnings management with firm values. 91

111 CHAPTER V CONCLUSION AND RECOMMENDATION A. Conclusion The purpose of this research is to find out the influence of earnings management to firm value and board of director (BOD) managerial ownership (MO) and institutional ownership (IO) as moderating variable in real estate and properties company listed on the Indonesia Stock Exchange from the period 2012 until Based on test results with three regression models found the conclusions are as follows: 1. Based on significant partial test (T-Test), Earnings management (EM) do not have significant influence to the firm value with coefficient regresion negative that shows earnings management can decrease the company value. While size of company have significant effect to the firm value with coefficient positive that show larger the company the greater the firm value. 2. Based on significant partial test (T-Test), board of director as moderating do not have significant effect to the firm value with coefficient positive that show corporate governance especially board of director have positive effect as moderating on firm value. 3. Based on significant partial test (T-Test), managerial ownership as moderating do not have significant effect to the firm value with 92

112 coefficient positive that show corporate governance especially mannagerial ownership have positive effect as moderating on firm value. 4. Based on significant partial test (T-Test), institutional ownership as moderating do not have significant effect to the firm value with coefficient positive that show corporate governance especially institutional ownership have positive effect as moderating on firm value. B. Recommendation 1. Measurement of corporate governance mechanism in this study only use board of directors managerial ownership and institutional ownership. It is expected to further research can add measurement variable corporate governance mechanisms, such as managerial ownership and institutional ownership. 2. Measurement of earning management mechanism in this study only use Disretionare accrual. It is expected to further research can add measurement variable earnings management mechanisms, such as Loss Loan Provision and Loss Loan Allowance. 3. The study period was relatively short, lasting only three years. So it may not be able to feel the impact of corporate governance mechanisms. Researchers further suggested using a longer study period so that it can be felt the impact of corporate governance mechanisms. 4. Sample companies in this study was relatively small. It is hoped further research using larger sample, such as all companies listed in Indonesia Stock Exchange. 93

113 REFERENCES Ali, Irfan, Pelaporan Keuangan dan Asimetri Informasi dalam Hubungan Agensi, Lintasan Ekonomi Vol. XIX. No.2 Juli, Amyulianthy, Rafriny. "Pengaruh Struktur Corporate Governance Terhadap Kinerja Perusahaan Publik Indonesia". Jurnal. Universitas Pancasila. Jakarta Barnae Amir and Amir Rubin. " Corporate Social Resposibility as a Conflict Between Shareholders". Financial and Banking Journal. Vol. 16, No Beasley, Mark S., "An Empirical Analysis of the Relation Between The Board of Director Composition and Financial Statement Fraud". The Accounting Review Vol. 71, No. 4, October: Berle and Means. The Modern Corporation and Private Property, Transaction Publisher, Boediono, Gideon. S.B. "Kualitas Laba: Studi Pengaruh Mekanisme Corporate Governance dan Dampak Manajemen Laba dengan Menggunakan Analisis Jalur". Article Simposium Nasional Akuntansi (SNA) VIII, Solo Bukhori,Iqbal, Pengaruh Good Corporate Governance dan Ukuran Perusahaan terhadap Kinerja Perusahaan, Undergraduate thesis, Diponegoro University,

114 Brigham, Eugene F. and Joel F. Houston, Fundamentals of Financial Management, Ninth Edition, Horcourt College, United States of America, Christiawan, Y.J. and Tarigan, J. "Kepemilikan Manajerial: Kebijakan Hutang, KInerja dan Nilai Perusahaan". Jurnal Akuntansi dan Keuangan Vol. 9, No. I, Cornett M. M, J. Marcuss, Saunders and Tehranian H. Earnings Management, Corporate Governance, and True Financial Performance, Darmawati, Deni et.al, Hubungan Corporate Governance Dan Kinerja Perusahaan. Simposium Nasional Akuntansi Vol. VII 2-3 Desember, Denpasar, Darwis, Herman. "Manajemen Laba Terhadap Nilai Perusahaan Dengan Corporate Governance Sebagai Pemoderasi". Jurnal Keuangan dan Perbankan, Vol. 16, No.1, Januari 2012, Hal 45-55, Dechow, Patricia, Sloan, Richard G. and Sweeney, Amy P. "Detecting Earnings Management". Accounting Review, April : Faisal, Analisis Agenci Cost, Struktur Kepemilikan, dan Mekanisme Corporate Governance, VII Accounting National Symposium, Denpasar, FCGI (Forum for Corporate Governance in Indonesia), The Roles of the Board of Commissioners and the Audit Committee in Corporate Governance, (Seri Tata Kelola Perusaaan (Corporate Governance) Jilid II,

115 Gumanti, Tatang Ary. Earnings Management : Suatu Telaah Pustaka, Jurnal Kuntansi dan Keuangan Vol. 2 November, Universitas Kristen Petra, Ghozali, Imam. Analisis Multivariat dan Ekonometrika Teori, Konsep dan Aplikasi dengan Eviews 8, Hastuti, Theresia Dwi, Hubungan Corporate Governance dengan Kinerja Keuangan ( Studi Kasus pada Perusahaan yang listing di Bursa Efek Jakarta. Jurnal Akuntansi dan Keuangan, Hardikasari, Eka, Pengaruh Penerapan Good Corporate Governance terhadap Kinerja Keuangan pada Industri Perbankan yang terdaftar di Bursa Efek Indonesia (BEI) tahun , Undergraduate Thesis, Diponegoro University, Semarang, Heally, P.M and Wahlen, J.M, A Review of The Earnings Management Literature and its Implication for Standard Setting, Accounting Horizon (December), p , Herawaty, Vinola. Peran Praktek Corporate Governance Sebagai Moderating Variable dari Pengaruh Earning Management terhadap Nilai Perusahaan, Jurnal Akuntasi Keuangan No. 10, Igra, The Influence of Board of Commissioners Characteristics on Earning management; In Case of Banking Company Listed in Indonesia Stock Exchange, Undergraduate Degree Thesis, Andalas University of Indonesia, Indonesia Stock Exchange, Access on February 15 th,

116 Indriantoro, Nur and Supomo, Bambang. Metodologi Penelitian Bisnis untuk Akuntansi & Manajemen. Edisi revisi, BDFE Yogyakarta, Jensen, M.C. and Meckling, W.H, Theory of The Firm: Managerial Behavior, Agency Cost, and Ownership Structure. Journal of Financial Economics, Vol. 76, pp , Jones, J. "Earnings Management During Import Relief Investigations". Journal of Accounting Research 29: Kamil, Fauzan. "Pengaruh Manajemen Laba Terhadap Nilai Perusahaan dengan Mekanisme Corporate Governance Sebagai Variabel Moderating", Undergraduate Degree Thesis, Universitas Telkom, 2014 Klapper, Leora. F. & I. Love, Corporate Governance, Investor Protection and Performance in Emerging Market. World Bank Working Paper. ssrn. com, KNKG (Komite Nasional Kebijakan Governance), Pedoman Umum Good Corporate Governance, Latifah dan P, Nurul. Adakah Perilaku Oportunistik dalam Aplikasi Agency Theori di Sektor Publik, Jurnal Fokus Ekonomi Vol. 5 No. 2. Semarang, STIE Pelita Nusantara, Merchant, K.A., "The Design of Corporate Budgeting System: Influence on Managerial Behaviour and Performance". The Accounting Review, Midiastuty, Pratana Puspa and Mas ud Machfoedz. Analisa Hubungan Mekanisme Corporate Governance dan Indikasi Manajemen Laba. Simposium Nasional Akuntansi VI. Surabaya

117 Murhadi, Werner R. Good Corporate Governance and Earnings Management Practices: An Indonesian Cases Access on January 21 th, Purbaningsih, Yoppy Palupi, The Effect Of Liquidity Risk and Non Performing Financing (NPF) Ratio to Commercial Sharia Bank Profitability in Indonesia", STIE EKUITAS Indonesia, Richardson Vernon J, ".Information Asymmetry and Earning Management: Some Evidence" Working Paper, Sarwono, Jonathan, RisetSkripsidanTesisdengan SPSS 22, Elex Media Komputindo, Jakarta, Scott, William R, "Financial Acconting theory, 4th Edition. Canada Inc : Pearson Education, Sekaran, Uma and Bougie, Roger, Research Methods for Business, Great Britain, John Wiley & Sons Ltd, Siallagan, Hamonangan. Machfoedz. Mekanisme Corporate Governance, Kualitas Laba dan Nilai Perusahaan, Simposium Nasional Akuntansi IX (Padang), Siswantaya, I Gede. "Mekanisme Corporate Governance dan Manajemen Laba". Tesis S2. Universitas Diponegoro : Semarang, Sudarma, Made, "Pengaruh Struktur Kepemilikan saham, Faktor Intern, Faktor Ekstern terhadap Struktur Modal dan Nilai Perusahaaan", Disertasi program Pasca sarjana Universitas Brawijaya malang,

118 Sugiyono, Metode Penelitian Kuantitatif Kualitatif dan R&D, Edisi Pertama, Cetakan Ketiga ifabeta, Bandung, Sumantoro, Pengantar Tentang Pasar Modal Di Indonesia, Jakarta : Ghalia Indonesia, Tarjo, Analisa Free Cash Flow dan Kepemilikan Manajerial terhadap Kebijakan Hutang pada Perusahaan Mempublik di Indonesia. Tesis S2 Program Pasca sarjana UGM, Yogyakarta, Tjager. IN., Alijoyo, F.A., Djemat, H.R, and Soembodo, B, Corporate Governance: Tantangan dan Kesempatan Bagi komunitas Bisnis Indonesia, Serial Mastering Good Corporate Governance, Prenhallindo, Jakarta, Ujiyantho, Muh. Arif and Bambang Arif Pramuka, Mekanisme Corporate Governance, Manajemen Laba dan Kinerja Keuangan, Simposium Nasional Akuntansi X, Makasar, Juli, Warsono, Sony., Fitri Amalia and Kartika Rahajeng. CGCG UGM s "Corporate Governance Rating Model". Yogyakarta: CGCG UGM Watts R. and J.L. Zimmerman, Positive Accounting Theory", New York: Prentice Hall, Weterings, Josephus P et al., The Impact of Board Size on Firm Value: Evidence from The Asian Real Estate Industry, William R. Scott, Financial Accounting Theory Third Edition, Pearson Education Canada Inc.,

119 APPENDIX I List of Data CODE YEARS EM BOD MO IO TOBINSQ SIZE APLN , ,098 67,04 1, ,65719 ASRI , ,99 1, ,09824 BAPA , ,92 1, ,94908 BCIP , ,43 1, ,60234 BEST , ,07 74,7 2, ,46717 BIPP , ,58 1, ,98328 BKDP , ,72 42,16 0, ,19053 BKSL , ,35 1, ,41172 BSDE , ,12 1, ,59741 COWL , ,74 0, ,26945 CTRA , ,204 30,63 1, ,12692 CTRP , ,93 1, ,95318 CTRS , ,66 1, ,12447 DART , ,66 0, ,50125 DILD , ,13 0, ,87591 DUTI , ,56 1, ,36135 EMDE , ,86 71,86 0, ,87387 FMII , ,87 2, ,22552 GAMA , , ,88428 GMTD , , ,92818 GPRA , ,75 1, ,6146 GWSA , ,49 1, ,17111 JRPT , ,12 8, ,31677 KIJA , , ,00812 KPIG , ,13 51,95 1, ,20229 LAMI ,82278E ,01 92,88 0, ,23229 LCGP , ,17 23,77 1, ,20088 LPCK , ,2 1, ,47009 LPKR , ,12 1, ,76989 MDLN , ,15 1, ,97195 MTSM , , ,81698 OMRE , ,07 90,43 1, ,09415 PLIN , ,84 1, ,38039 PUDP , ,91 59,64 0, ,76022 PWON , ,03 70,39 2, ,01389 RBMS , ,31 19,18 0, ,56747 RDTX , ,03 75,23 0, ,57 101

120 CODE YEARS EM BOD MO IO TOBINSQ SIZE RODA , ,9 2, ,10798 SCBD , ,001 82,41 3, ,93023 SMDM , ,09 0, ,53308 SMRA , ,28 41,82 0, ,43024 APLN , ,092 67,04 0, ,11437 ASRI , ,8 1, ,7651 BAPA , ,37 0, ,20426 BCIP , ,43 2, ,20118 BEST , ,07 61,39 1, ,08612 BIPP , ,35 0, ,33238 BKDP , ,72 42,16 0, ,09522 BKSL , ,58 0, ,22622 BSDE , ,12 1, ,74769 COWL , ,5 1, ,45934 CTRA , ,206 30,63 1, ,11434 CTRP , ,04 1, ,07641 CTRS , ,66 1, ,07901 DART ,97123E ,66 0, ,96601 DILD , ,13 0, ,81436 DUTI , ,56 1, ,74471 EMDE , ,22 0, ,87387 FMII , ,87 2, ,67751 GAMA , ,92 0, ,63205 GMTD , , ,45995 GPRA , ,75 0, ,1938 GWSA , ,04 79,49 0, ,84639 JRPT , ,95 2, ,98743 KIJA , ,967 0, ,98774 KPIG , ,37 82,58 1, ,44685 LAMI , ,01 92,88 0, ,0378 LCGP , ,89 1, ,13877 LPCK , ,2 1, ,85274 LPKR , ,12 1, ,67558 MDLN , ,91 1, ,21778 MTSM , ,95 1, ,80259 OMRE ,91451E ,07 90,43 1, ,10897 PLIN , ,07 2, ,55029 PUDP , ,91 59,64 0, ,78706 PWON , ,03 52,19 1, ,19621 RBMS , ,36 19,2 0, ,

121 CODE YEARS EM BOD MO IO TOBINSQ SIZE RDTX , ,27 81,74 1, ,90647 RODA , ,31 2, ,442 SCBD , ,41 1, ,82487 SMDM ,88932E ,16 0, ,91103 SMRA , ,28 41,82 0, ,29409 APLN , ,098 67,04 0, ,55787 ASRI ,07727E ,48 1, ,02925 BAPA , ,13 76,89 0, ,96585 BCIP , ,02 2, ,72727 BEST ,36305E ,07 57,96 2, ,5828 BIPP , ,35 0, ,38644 BKDP , ,72 42,16 1, ,29816 BKSL , ,58 0, ,81437 BSDE ,53579E ,88 1, ,1324 COWL , ,32 1, ,74436 CTRA , ,2 30,63 1, ,65387 CTRP , ,04 1, ,27905 CTRS ,99415E ,66 1, ,39873 DART , ,66 0, ,39002 DILD , ,13 1, ,53876 DUTI , ,56 1, ,83135 EMDE , ,22 0, ,85221 FMII , ,87 3, ,83129 GAMA , ,92 0, ,69166 GMTD , , ,15199 GPRA , ,59 1, ,61024 GWSA , ,04 79,49 0, ,93654 JRPT , ,61 2, ,24792 KIJA , ,967 1, ,41767 KPIG , ,64 53,32 2, ,8722 LAMI , ,01 92,88 0, ,48927 LCGP ,55267E ,64 2, ,88321 LPCK , ,2 2, ,61042 LPKR , ,44 1, ,78969 MDLN , ,96 1, ,50547 MTSM , ,95 1, ,80259 OMRE , ,07 90,43 0, ,10897 PLIN , ,46 3, ,21972 PUDP , ,91 59,64 0, ,70231 PWON , ,03 57,61 1, ,

122 CODE YEARS EM BOD MO IO TOBINSQ SIZE RBMS , ,7 19,18 0, ,08196 RDTX , ,27 84,19 1, ,97546 RODA , ,31 1, ,1022 SCBD , ,53 1, ,52476 SMDM ,34633E ,18 0, ,23482 SMRA , ,28 37,68 0, ,11741 Source : Data Process Table 4.2 List of Companies Sample No Company Code 1 Agung Podomoro Land Tbk. APLN 2 Bekasi Fajar Industrial Estate Tbk. BEST 3 Bukit Darmo Property Tbk. BKDP 4 Ciputra Development Tbk. CTRA 5 MNC Land Tbk. KPIG 6 Lamicitra Nusantara Tbk. LAMI 7 Indonesia Prima Property Tbk. OMRE 8 Pudjiati Prestige Tbk. PUDP 9 Pakuwon Jati Tbk. PWON 10 Rista Bintang Mahkota Sejati Tbk. RBMS 11 Roda Vivatex Tbk. RDTX 12 Summarecon Agung Tbk. SMRA Source : Data Process 104

123 APPENDIX II Table 4.3 Descriptive Statistics N Minimum Maximum Mean Std. Deviation EM 36 -,01,02,0009,00603 BOD 36 2,00 9,00 5,6111 2,34555 MO 36,01 56,70 8, ,69764 IO 36 19,18 92,88 59, ,77275 TobinsQ 36,24 2,97 1,1526,67146 Size 36 24,08 30,87 27,8583 1,95453 Valid N (listwise) 36 Source : Output SPSS 22.0 Table 4.4 One-Sample Kolmogorov-Smirnov Test (Model 1) Unstandardized Residual N 36 Normal Parameters a,b Mean, Std. Deviation, Most Extreme Differences Absolute,147 Positive,147 Negative -,088 Test Statistic,147 Asymp. Sig. (2-tailed),048 c Source : Output SPSS 22.0 Table 4.5 One-Sample Kolmogorov-Smirnov Test (Model 2) Unstandardized Residual N 36 Normal Parameters a,b Mean, Std. Deviation, Most Extreme Differences Absolute,123 Positive,123 Negative -,065 Test Statistic,123 Asymp. Sig. (2-tailed),182 c Source : Output SPSS

124 Table 4.6 One-Sample Kolmogorov-Smirnov Test (Model 3) Unstandardized Residual N 123 Normal Parameters a,b Mean, Std. Deviation, Most Extreme Differences Absolute,063 Positive,040 Negative -,063 Test Statistic,063 Asymp. Sig. (2-tailed),200 c,d Source : Output SPSS 22.0 Figure 4.1 Source : Output SPSS

125 Figure 4.2 Figure 4.3 Source : Output SPSS

126 Figure 4.4 (Model 1) Source : Output SPSS 22.0 Figure 4.5 (Model 2) 108

127 Figure 4.6 (Model 3) Source : Output SPSS 22.0 Table 4.7 Multicollinearity Test (Model 1) Coefficients a Collinearity Statistics Model 1 (Constant) Tolerance VIF EM,975 1,025 Size,975 1,025 a. Dependent Variable: TobinsQ Source : Output SPSS

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