Effect of Corporate Governance Disclosure Index, Economic Value Added, Financial Performance on Earnings Management

This study was conducted with the aim of examining the effect of the Corporate Governance Disclosure Index, Economic Value Added, Financial Performance on Earnings Management in food and beverage manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the 2015-2020 period through purposive sampling method and multiple linear analysis. by using the SPSS in the number of samples used as many as 14 data in a 6-year study period, so that the total data that has been researched is 84 data for manufacturing companies in the food and beverage sub-sector. In this study, it is stated that the Corporate Governance Disclosure Index, Economic Value Added, Financial Performance have a simultaneous effect on Earnings Management. The Corporate Governance Disclosure Index has a significant negative effect on Earnings Management. Value Added Economy holds a positive influence on Earnings Management. Return On Assets (ROA) has a positive influence on Earnings Management. Working Capital Turnover (WCTT) has a positive influence on Earnings Management.


INTRODUCTION
Manufacturing companies in the food and beverage sub-sector are now increasing rapidly, steadily, and contributing more to the economy through increased investment, range of export values, and employment (Novianida, 2016). Until the third quarter of this year, food and beverage companies still posted quite good growth as evidenced by the improvement in financial statement performance, in the last nine months Sariguna Primatirta Tbk. (CLEO) posted a revenue increase of 30.64% from IDR. 593.76 billion to IDR. 775.69 billion, while the net profit was IDR. 94.02 billion (Dwijayanto, 2019).
The company implements Earning Management (Earning Management) so that it has good financial reports so that it is more able to attract investors' interest in investing (Hermanto, 2018). In making investments, investors calculate company performance measures accompanied by evaluations to be one of the decision-making processes in determining company value (Karnawati, 2018). Management as the company's control has more information and uses these opportunities to carry out dysfunctional behavior activities by carrying out the implementation of profits listed in the company's financial statements (Madli, 2012;. The company applies the Corporate Governance Disclosure Index (IPCG) as a benchmark for calculating the level of transparent corporate governance disclosure, accountability, responsibility, independence and fairness in order to be added value for stakeholders (Putranto & Raharja, 2013). The procedure used in measuring the corporate governance disclosure index is to apply an unweighted index on the partition value, namely point 1 for each item stated and point 0 for items that are not disclosed (Nugraha, 2021;Lukman, 2020).
Economic Added Value is applied as a tool to measure economic profit that is used to reduce weaknesses in calculating capabilities and is used as a management indicator to maximize company value (Crysdayanti, 2018). Positive economic added value is able to support management to understand the company's capital costs, then the net recovery level in capital and company value will be created and affect the community's response (Farizqi, 2018;Arif, 2021).
Return On Assets (ROA) is used in the assessment, evaluation, effectiveness and efficiency of the company's asset management so as to be able to obtain greater profits (Septyanto & Welandasari, 2020). If the company's profit increases, the company's performance increases and investors are more interested in investing (Gantino & Maulana, 2013). With this performance, management is motivated to act opportunistically such as increasing or decreasing profits (Suhardi & Fadli, 2021).
Working Capital Turnover (WCTT) is needed by every company in daily operational activities to see the exchange of assets, because with the increase in the exchange of assets, the industry's operations become more efficient and profitability is increasing (Wulandari, 2021). Asset turnover is used in measuring the company's working capital capability, the more working capital moves at one time while considering the joint marketing of working capital and has a significant capacity to increase industrial profits (Manik et al., 2021;Hermanto, 2021).
There is a previous study that analyzed the influence of traditional accounting and economic value added, related to good corporate governance of the BUMN industry (Taufik et al., 2018;Hermanto, 2017). The results show that the added value of traditional economics and accounting is not through the intermediary of good corporate governance and firm value. In other words, good corporate governance does not affect the quality of industry and traditional accounting, namely, ROA and economic value added. However, the difference from this study is that the population in the food and beverage sub-sector industry is listed on the Indonesia Stock Exchange (IDX) for the 2015-2020 period. In contrast to previous studies that used ROA, economic value added, GCG as the independent variable. Meanwhile, the study uses IPCG, economic value added, ROA, and WCTT as independent variables.
This study aims to understand the effect of IPCG, economic value added, financial performance on earnings management, with this research it is hoped that new knowledge will be obtained as well as a development of knowledge that previously existed in manufacturing companies in the food and beverage sub-sector.

B.
LITERATURE REVIEW

Relationship between Corporate Governance Disclosure Index (IPCG), Economic Value Added, Return on Assets (ROA), Working Capital Turnover (WCTT) on Earnings Management
Based on agency theory, GCG and earnings management are used as a basis to get rid of asymmetry ties with owners and management in order to maximize economic added value and reflect good company performance. The size of the profit obtained by the industry in the future will affect the behavior of earnings management in intervening in the method of preparing financial reports for external parties (

The Relationship of the Corporate Governance Disclosure Index (IPCG) to Earnings Management
The implementation of the Corporate Governance Disclosure Index (IPCG) reflects that the industry carries out good operational activities so that it can achieve the company's target, namely by obtaining the maximum profit. The components contained in IPCG can be used to suppress management behavior in order to carry out earnings management behavior (Isnanta, 2008). If the implementation of good corporate governance goes well, it is hoped that the capacity of financial statements and the value of the company will increase in the eyes of investors so that this becomes an effort to reduce earnings management actions (Arrozi, 2020

The Relationship of Economic Value Added to Earnings Management
Industries that have maximum economic added value tend to attract investors to invest in the industry (Amna, 2020). Therefore, in order to attract investors, management takes earnings management actions by presenting good financial reports in order to provide added economic value for users of financial statements

Relationship of Return on Assets (ROA) to Earnings Management
The management carries out earnings management behavior so that the industry's capabilities can look good and in accordance with the expectations of the management (Amertha, 2013). Therefore, the greater the percentage level of profit, the higher the level of management performance in realizing profit and later it can be a basis for investors' determination in carrying out investment in the industry (Hermanto & Natasya, 2021). If ROA increases, earnings management in the company has an indicator of increasing maximum profit recovery, company management tends to carry out earnings management habits to get rid of political budgets such as taxes, therefore management tends to reduce the profits that have been obtained so that they are free from taxes (Husna, 2018). Previous research from Umami (2019)

Relationship of Working Capital Turnover (WCTT) to Earnings Management
Working Capital Turnover (WCTT) relates to the level of effectiveness of the company's working capital in supporting operational activities in minimizing liquidity risk. The increase in sales at manufacturing companies directly increases the profits that will be obtained by the company which will be used to achieve company goals (

C. METHOD
The form of measurement used in this study is to measure the causal relationship (explanatory causality) which examines the independent and dependent variables in quantitative methods with multiple linear regression equations. Testing the data in this study used normality test, multicollinearity test, autocorrelation test, heteroscedasticity test, simultaneous test (f test), partial test (t test), and adjusted R 2 test. The data is processed using data processing software with purposive sampling data collection method in the food and beverage sub-sector manufacturing industry which is listed on the Indonesia Stock Exchange (IDX) during 2015-2020. The data in the form of annual financial reports in the study are secondary data obtained via the official web page of the Indonesia Stock Exchange (IDX) as well as the official web pages of each manufacturing industry in the food and beverage sub-sector. The total population of the food and beverage sub-sector manufacturing industry is 34 industries, the sample taken for this study is 14 industries and the object of the food and beverage sub-sector manufacturing industry for the 2015-2020 period. So that the total sample obtained in the study was 84 samples (14 industries with 6 years of observation). The research period starts from October 4, 2021 to February 28, 2022.

D. RESULT AND DISCUSSION
The following is a description of the results of statistical data processing in table 1 below:  With the provision that the tolerance value is greater than 0.10 and the VIF value is less than 10, based on this value, it is concluded that there is no multicollinearity in this study.
Heteroscedasticity test, this test uses the Scatter Plot method with the provisions that the image does not form a certain pattern and the resulting points are spread out, based on this value, it is concluded that in this study there are no symptoms of heteroscedasticity.
Simultaneous Test (Test f), the variables IPCG, EVA, ROA, and WCTT have a significance value of 0.000, based on this value, it is concluded that in this study the variables IPCG, EVA, ROA, and WCTT have a simultaneous effect on Earnings Management. If seen from table 2, the IPCG, EVA, and ROA variables have a significance value of 0.000, based on this value, it is concluded that in this study the IPCG, EVA, and ROA variables have a partial impact on earnings management, the WCTT variable has a significance value of 0.008., it can be concluded that in this study the WCTT variable does not have a partial impact on earnings management. Provisions on independent variables have an impact on the dependent variable partially if the significance value is less than 0.005.

Partial Test (t Test)
Adjusted R 2 test, the value obtained is 0.607, based on this value, it is concluded that in this study the variables IPCG, EVA, ROA, and WCTT provide an explanation of the Earnings Management variable. There is a provision if the value is close to 1, then the independent variable has a bigger impact on the explanation of the dependent variable, whereas if the value is close to 0, then the independent variable has a smaller impact on the explanation of the dependent variable.

Effect of Corporate Governance Disclosure Index, Economic Value Added, Financial Performance on Earnings Management
Based on the processed conclusions from the simultaneous test (f test) regarding the Corporate Governance Disclosure Index, Economic Value Added, Financial Performance on Earnings Management, it shows that these results have a simultaneous impact on earnings management in the food and beverage sub-sector industry listed on the Indonesia Stock Exchange (IDX). These results are in accordance with previous studies which state that the large and small profits obtained by the industry in the future will affect the behavior of earnings management in intervening in the method of preparing financial statements for external parties (Safitri & Triyonowati, 2015). With these results, investors can obtain information related to the condition of the company's development and growth from year to year. And information about higher profits can make it easier for investors to make decisions so as to reduce investors' mistakes in investing in industries listed on the Indonesia Stock Exchange (IDX).

Effect of Corporate Governance Disclosure Index on Earnings Management
Based on the conclusion of the t test obtained from the value of Sig. IPCG 0.000 < 0.050 means that the Corporate Governance Disclosure Index has a negative impact on earnings management in industries listed on the Indonesia Stock Exchange (IDX) for the 2015-2020 period. These results are in accordance with previous studies which state that there is a negative impact of the Corporate Governance Disclosure Index on earnings management, this is supported by the components contained in the Corporate Governance Disclosure Index which aims to minimize actions on earnings management by measuring interval scale as a measuring tool (Janrosl & Lim, 2019). The procedure used in measuring the corporate governance disclosure index is to apply an unweighted index on the partition value, namely point 1 for each item that is stated and point 0 for items that are not disclosed (Nugraha, 2021).

The Effect of Economic Value Added on Earnings Management
Economic Value Added which has been tested using the t test can be concluded that the economic added value on earnings management has a positive impact on the value of Sig. EVA .000 < .050 in food and beverage sub-sector manufacturing companies that have been recorded in the 2015-2020 period. These results are in accordance with previous studies which state that economic value added has a relevant positive impact on earnings management (Riswandi et al., 2020). EVA which has a positive impact can be seen by the level of management's ability to create a company calculation, so that investors can consider investing in the company (Karmawan & Badjra, 2019). This is because the economic value of the company tends to attract investors to invest.

Effect of Return on Assets (ROA) on Earnings Management
Return On Assets (ROA) which has been tested using the t-test shows that the results used have a positive impact on earnings management, this is determined by the conclusion that the value of Sig. ROA .000 < .050. These results are in accordance with previous studies which stated that Return on Assets (ROA) had a positive impact on earnings management in the food and beverage sub-sector industry (Umami, 2019). Positive ROA results, ROA can help investors and managers to identify the condition of the company in managing its investment into a profit or profit, with this, if the ROA is low, it will be less good for earnings management (Ambarita, 2019).

Effect of Working Capital Turn Over (WCTT) on Earnings Management
Based on the t-test related to the results of Working Capital Turnover (WCTT) obtained with the value of Sig. .008 < .050 means that Working Capital Turnover (WCTT) has a positive impact on earnings management. This result is in accordance with previous studies which state that Working Capital Turnover (WCTT) has a relevant positive impact on earnings management (Anggadini & Miharjo, 2019). It is also supported by previous research which states that Working Capital Turnover (WCTT) has a relevant positive impact on earnings management (Ramadhan & Supraja, 2019). This is evidenced by an increase in profit, thus this can be a reference for investors to see the company's working capital turnover is increasing and efficient by comparing the previous year.

E. CONCLUSION
Based on the results of this study, it can be concluded that the results of testing the variables IPCG, EVA, ROA, and WCTT have a simultaneous impact on Earnings Management. The Corporate Governance Disclosure Index has a relevant negative impact on Earnings Management, Economic Added Value has a positive impact on Earnings Management. Return On Assets (ROA) has a positive impact on Earnings Management. Working Capital Turnover (WCTT) has a positive impact on earnings management.
Implementation of the Corporate Governance Disclosure Index (IPCG), reflecting that the industry can carry out operational activities well so that the company's goals can be achieved, namely by obtaining the maximum profit because companies that have added economic value and good financial performance tend to be more attractive to investors.