The Influence Of Independent Commissioners, Leverage, And Internal Control On Earnings Quality With Firm Size As A Moderating Variable

Abstract

Earnings quality measures how well reported earnings reflect a company's true condition and performance, providing an accurate and reliable picture for decision-making. This study aims to analyze the influence of independent commissioners, leverage, and internal control on earnings quality, with company size as a moderating variable. The population in this study was non-cyclical consumer sector companies listed on the Indonesia Stock Exchange (IDX) during the 2022-2024 period. Using a purposive sampling method, a sample of 67 companies was obtained. The results show that independent commissioners and internal control have no significant effect on earnings quality, indicating that companies do not implement the independent commissioner function optimally or merely symbolically, and do not implement internal control effectively despite having a sound control system. Meanwhile, leverage has a significant positive effect on earnings quality, indicating that leverage functions as an effective external discipline mechanism. Oversight from creditors has been shown to limit opportunistic management behavior. In this study, company size only negatively moderated the effect of leverage on earnings quality, indicating that the supervisory role of creditors is more crucial in small companies than in larger companies, which may already have other forms of oversight.