Abstract
This study aims to examine the effects of company size, net profit margin (NPM), and debt-to-equity ratio (DER) on income smoothing practices in textile and garment companies listed on the Indonesia Stock Exchange (IDX) from 2018 to 2022. Income smoothing is a managerial action designed to reduce profit fluctuations, thereby presenting a more stable financial performance and increasing stakeholder confidence. This quantitative research employs multiple linear regression analysis, accompanied by classical assumption tests, including normality, multicollinearity, heteroscedasticity, and autocorrelation tests. The results show that partially, company size, NPM, and DER each have a significant effect on income smoothing. Simultaneously, these three variables also significantly influence income smoothing practices, with an explanatory power of 85.7%. These findings suggest that the combination of firm size, profitability, and capital structure significantly contributes to managerial decisions related to income smoothing. This research enriches empirical evidence on earnings management behaviour. It provides implications for investors, auditors, and regulators in evaluating the quality of financial reporting and corporate transparency within Indonesia’s textile and garment sector.
References
Afala, L. M., Bintang, J., Karsiwi, R. R. M., Octaviany, V., Presiden Republik Indonesia, Lolyana, L. A. P., Mohammad Wahed, Ahmad Sholikin, Amalia, A. S., Hanifah, L., Filantropi, B., Bella, P. A., Apriyanti, M. E., Subiyantoro, H., Astuti, P., Yohanes P. Lian1,Merlin Laka2,Yohan Semi3, G. D., Syahreddy, Cirprandy Riopaldotambunan, Sinaga, N. A., … Bempah, I. (2023). Kontribusi Umkm Dalam Perekonomian Indonesia. Jurnal Politik Dan Sosial Kemasyarakatan, 9(2).
Bulang Witari. (2020). Pengaruh Kompensasi Dan Motivasi Terhadap Loyalitas Karyawan Di Ktm Resort. Universitas Putera Batam, 01.
Dessy Susilawati, & Muhammad Hafil. (2020). Kementrian : Industri Fashion Muslim Ikut Terdampak Pandemi. Khazanah.
Gaventa, J., & Mcgee, R. (2013). The Impact Of Transparency And Accountability Initiatives. Development Policy Review, 31(S1). Https://Doi.Org/10.1111/Dpr.12017
Hadi, N., & Widyasari, W. (2023). Faktor – Faktor Yang Mempengaruhi Praktik Income Smoothing. Jurnal Paradigma Akuntansi, 5(1). Https://Doi.Org/10.24912/Jpa.V5i1.22167
Indah, B. (2023). Faktor Yang Mempengaruhi Income Smoothing. Kompak :Jurnal Ilmiah Komputerisasi Akuntansi, 16(1). Https://Doi.Org/10.51903/Kompak.V16i1.1036
Kaawaase, T. K., Nairuba, C., Akankunda, B., & Bananuka, J. (2021). Corporate Governance, Internal Audit Quality And Financial Reporting Quality Of Financial Institutions. Asian Journal Of Accounting Research, 6(3). Https://Doi.Org/10.1108/Ajar-11-2020-0117
Kustono, A. S. (2021). Corporate Governance Mechanism As Income Smoothing Suppressor. Accounting, 7(4). Https://Doi.Org/10.5267/J.Ac.2021.1.010
Ma, L., Zhang, W., Ma, J., Luo, J., & Yan, Z. (2024). Transjugular Intrahepatic Portosystemic Shunt Versus Endoscopy With Drug Therapy Warrants Further Exploration. In Radiology (Vol. 310, Issue 1). Https://Doi.Org/10.1148/Radiol.232499
Mahrani, W. (2023). Peranan Perbankan Dalam Meningkatkan Perekonomian Indonesia. Jurnal Al Wadiah, 1(2). Https://Doi.Org/10.62214/Jaw.V1i2.138
Manjunatha. N. (2021). Quantitative Methods: Descriptive Research. Journal Of Emerging Technologies And Innovative Research, 6(6).
Maotama, N. S., & Astika, I. B. P. (2020). Pengaruh Profitabilitas, Ukuran Perusahaan, Dan Kepemilikan Manajerial Terhadap Praktik Perataan Laba (Income Smoothing). E-Jurnal Akuntansi, 30(7). Https://Doi.Org/10.24843/Eja.2020.V30.I07.P12
Mazengo, S., & Mwaifyusi, H. (2021). The Effect Of Liquidity, Profitability And Company Size On Dividend Payout: Evidence From Financial Institutions Listed In Dar Es Salaam Stock Exchange. Business Education Journal, 10(1). Https://Doi.Org/10.54156/Cbe.Bej.10.1.242
Meiryani, R. A., Puspokusumo, A. W., Udjaja, Y., & Juwita, A. (2020a). The Effect Of Debt To Equity And Company Size On Income Smoothing Practices. In Journal Of Critical Reviews (Vol. 7, Issue 7). Https://Doi.Org/10.31838/Jcr.07.07.51
Meiryani, R. A., Puspokusumo, A. W., Udjaja, Y., & Juwita, A. (2020b). The Effect Of Debt To Equity And Company Size On Income Smoothing Practices. In Journal Of Critical Reviews (Vol. 7, Issue 7). Https://Doi.Org/10.31838/Jcr.07.07.51
Mokosolang, C., Prang, J., & Mananohas, M. (2015). Analisis Heteroskedastisitas Pada Data Cross Section Dengan White Heteroscedasticity Test Dan Weighted Least Squares. D’cartesian, 4(2). Https://Doi.Org/10.35799/Dc.4.2.2015.9056
Nurhayati, E., Hamzah, A., & Nugraha, H. (2021). Stock Return Determinants In Indonesia. Indonesia Accounting Journal, 3(1). Https://Doi.Org/10.32400/Iaj.32196
Savitri, E. (2019). Can Effective Tax Rates Mediate The Effect Of Profitability And Debts On Income Smoothing? Problems And Perspectives In Management, 17(3). Https://Doi.Org/10.21511/Ppm.17(3).2019.07
Sürücü, L., & Maslakçi, A. (2020). Validity And Reliability In Quantitative Research. Business & Management Studies: An International Journal, 8(3). Https://Doi.Org/10.15295/Bmij.V8i3.1540
Suyono, E., Wiratno, A., Purwati, A. S., Suparlinah, I., Mustafa, R. M., & Lestari, P. (2023). Factors Affecting Income Smoothing Practice: Insights From The Indonesian Capital Market. Corporate And Business Strategy Review, 4(1). Https://Doi.Org/10.22495/Cbsrv4i1art6
Uyanto, S. S. (2020). Power Comparisons Of Five Most Commonly Used Autocorrelation Tests. Pakistan Journal Of Statistics And Operation Research, 16(1). Https://Doi.Org/10.18187/Pjsor.V16i1.2691
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.