Authors:
Indra Kusumawardhani
and
Windyastuti
Affiliation:
Universitas Pembangunan Nasional Veteran Yogyakarta, Indonesia
Keyword(s):
accrual quality, real earnings management, corporate governance, credit rating, the board size, independent board, audit committee
Abstract:
This research examined whether accrual quality, real earnings management, and corporate governance
affect the firm's credit rating in Indonesia. Specifically, investigation on whether real earnings management
components, represented by AbnCFO, AbnDisExp, and AbnPROD, together with corporate governance
components, which are represented by board size, independent board, and audit committee affect the firm's
credit rating. This research used several corporate governance mechanisms developed by Bursa Efek
Indonesia and credit rating classification developed by PEFINDO. Multiple regression model is selected to
test the research problem. This research found that accrual quality, ABnCFO, ABnPROD, and board size
affected the firm's credit rating, while the independent board and audit committee did not affect credit
rating.