The Influence of Information Asymmetry, Agency Cost and Institutional Ownership on Income Smoothing

Abstrak

ABSTRACT

Income smoothing is one of the earnings management’s mechanism. This technique done by the firm that tend to choose to smooth income by reporting the stable income growth trend rather than dramatic one. The population on this research was conducted on banking companies that listed in the Indonesian Stock Exchange in the period 2011-2016. Sample on this research chosen by non-probability sampling method with purposive sampling technique. The samples on this research were 138 financial statements data observations, which consist of 23 listed banking companies in the Indonesian Stock Exchange in period 2011-2016. The analysis technique that used was logistic regression. Based on the results, it can be concluded that information asymmetry has not significant effect on income smoothing, agency cost has not significant effect on income smoothing, and the institutional ownership has negative effect on income emoothing.

Keywords: information asymmetry, agency cost, institutional ownership, and income smoothing.