The Role of Corporate Governance as a Moderating Variable on Earnings Management and Carbon Emission Disclosure

Abstract

The purpose of this study is to examine the influence of earnings management on carbon emission disclosure with corporate governance as a moderating variable. The population was companies in the sector of industry and chemical, agriculture, energy, transportation listed on the Indonesia stock exchange (IDX). Based on the purposive sampling method, 12 companies were selected as the samples (60 firmyear observations). The data analysis technique used is the moderate regression analysis (MRA). The results showed that the earnings management has a significant positive effect on carbon emission disclosure. The board of commissioner size moderates the influence of the earnings management on the carbon emission disclosure. The board of directors has a role in affecting the carbon emission disclosure, while the independent commissioners, the institutional ownership, and the audit committee meetings do not have a significant effect on weakening the effect of profit management on carbon emission disclosure.

The effect of earnings management and media exposure on corporate social responsibility disclosure with corporate governance as a moderating variable

“…Managers believe that by meeting stakeholder satisfaction and creating a good impression on the social and environmental aspects, the suspicion and vigilance of stakeholders can be reduced. Prior et al (2008) research is supported by the results of Gavana et al (2017), Rosani & Santosa (2020) and Astari et al (2020) research which found earnings management has a positive effect on corporate social responsibility disclosure. Based on this explanation, a hypothesis can be proposed: H1: Earnings management has a positive effect on corporate social responsibility disclosure…”

“…The board of commissioners is required to maintain integrity and ensure that the supervisory and advisory functions are carried out properly. There is a significant positive relationship between the board of commissioners and CSR disclosure (Liu & Zhang, 2016;Astari et al, 2020;Ratmono et al, 2021). Larger board sizes tend to carry out effective monitoring mechanisms and encourage disclosure, to reduce information asymmetry between management and shareholders (Buertey et al, 2019).…”

“…The board of commissioners is an organ of issuers or public companies that is tasked with conducting general/or specific supervision in accordance with the articles of association and providing advice to the board of directors. The measurement of the board of commissioners in this study refers to the research of Astari et al (2020) and Ratmono et al (2021) that is adding up all the board of commissioners in a company.…”

“…According to Soliman & Ragab (2014) committee meeting audits are held regularly every year to ensure that the process of financial reporting and social responsibility disclosure is functioning properly. Referring to the research of Astari et al (2020), the audit committee meetings in this study were measured by the number of meetings held by the audit committee in the current year.…”

“…Several studies related to earnings management and media exposure to corporate social responsibility disclosures show inconsistent results. For example, research that shows that there is a positive influence between earnings management and corporate social responsibility disclosures conducted by Gavana et al (2017), Rosani & Santosa (2020) and Astari et al (2020) is inversely proportional to the results of research by Laksmi & Kamila (2018), Pertiwi & Violita (2018) and Anggita et al (2019) which show that earnings management has no effect on CSR disclosure. Furthermore, research that shows a positive influence between media exposure and corporate social responsibility disclosure is shown from the results of research by Hammami & Zadeh (2020), namely a high frequency of media exposure will encourage companies to disclose information related to CSR more broadly and transparently.…”