Income Smoothing Determinants in Indonesia Banking Industry

Abstract

The research aims to determine the effect of profitability, corporate value, company size and financial risk to income smoothing. Researchers would like to review the factors affecting income smoothing, at the banking companies listed on the IDX during the period of 2014-2016. The sampling method use author is purposive sampling there are 21 company of research sample or 66 sample. The analysis technique used is logistic regression with enter method and quartile analysis. The results showed profitability, corporate value and financial risk have a positive and significant effect on income smoothing, but size of the company doesn't effect on income smoothing. Quartile analysis showed that most of companies that conduct income smoothing have PBV 0.82-1.66 and DAR > 0.8.

Profitability, Firm Value, Income Smoothing: The Moderating Role of Firm Growth

“…Previous studies has examine income smoothing using profitability (Artawan et al, 2020;Arum & Aminah, 2017;Fitri et al, 2018;Fitriani, 2018;Gunawan & Hardjunanto, 2020;Haniftian & Dillak, 2020;Herdjiono et al, 2019;Indrawan & Damayanthi, 2020;Oktaviasari et al, 2018;Oktoriza, 2018;Oktyawati & Agustia, 2014;Peranasari & Dharmadiaksa, 2014;Sellah & Herawaty, 2019;Setyaningtyas & Hadiprajitno, 2014;Yanti & Dwirandra, 2019), firm size (Arum & Aminah, 2017;Benandri & Andayani, 2018;Fitri et al, 2018;Fitriani, 2018;Gunawan & Hardjunanto, 2020;Indiraswari & Rahmayanti, 2022;Indrawan & Damayanthi, 2020;Lahaya, 2017;Lim, 2022;Nathania & Nugroho, 2023;Nugraha & Dillak, Julianti, 2018;Oktaviasari et al, 2018;Oktoriza, 2018;Peranasari & Dharmadiaksa, 2014;Setyaningtyas & Hadiprajitno, 2014;Sunetri et al, 2022), firm risks (Benandri & Andayani, 2018;Lahaya, 2017;Leviany et al, 2019;Masning et al, 2022;Peranasari & Dharmadiaksa, 2014), dividend policy (Bobby et al, 2022;…”

“…;Herdjiono et al (2019);Nugraha & Dillak, Julianti (2018);Oktaviasari et al (2018); Oktoriza (2018); Oktyawati & Agustia (2014); Peranasari & Dharmadiaksa (2014); Yanti & Dwirandra (2019)suggested that profitability is positively associated with income smoothing. Arum & Aminah (2017); Natalie & Astika (2016); Nurani & Dillak (2019) found that profitability is negatively associated with income smoothing.…”