The purpose of earnings management practice is to reach the profit goals the company wants to achieve. Therefore, this study aims to determine the relationship between related party transactions and earnings management in Indonesia by balanced panel data from consumer goods companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2019. The number of samples used in this study was 102 firm-year observations. The results showed that related party transactions positively and significantly improved corporate earnings management, with discretionary accrual as a proxy. The presence of family ownership strengthens the relationship between related party transactions and earnings management. Also, it shows that the control variable: public accountant from BIG4, company size, company losses, and ROA affect accrual earnings management. The leverage does not affect accrual earnings management. The study result indicates that family business ownership encourages an entrenchment effect that is detrimental to the company. It is carried out through related party transactions then manipulated by using accrual earnings management practices.DOI: 10.26905/jkdp.v25i3.5778

This research seeks to investigate the effect of foreign ownership structure on the level of listed Indonesian manufacturing firms’ risk-taking behavior. We predict that foreign owners prefer high-risk investment projects because they aim for short-term profits, and we use earnings volatility as the proxy of risk-taking behavior. This study uses unbalanced panel data from listed Indonesian manufacturing firms from 2014- 2017, resulting in 438 firm-year observations. The research results show that foreign ownership structure has a significantly positive impact on firms’ risk-taking behavior. Furthermore, the robustness test indicates that only firms with 80-90 percent of foreign ownership exhibit a significantly positive effect of foreign ownership on firms’ risk-taking behavior. Thus, foreign shareholders can affect firms’ risk-taking behavior more effectively when they have (almost) full control.