THE EFFECT OF EARNINGS MANAGEMENT, GOOD CORPORATE GOVERNANCE (GCG) AND DISCLOSURE OF SUSTAINABILITY REPORTS ON FINANCIAL PERFORMANCE IN COMPANIES LISTED IN LQ45 ON INDONESIA STOCK EXCHANGE FOR THE 2019-2023 PERIOD

Abstract

The purpose of this study is to determine the effect of earning management, good corporate governance (GCG) and disclosure of sustainability report on financial performance, as proxied by ROA, in companies listed on the Indonesia Stock Exchange (IDX) in 2019-2023. The data used in this study are secondary data, namely annual reports and sustainability reports of companies listed on the LQ45 for 5 periods, obtained from the company's official website and the official website of the Indonesia Stock Exchange. This study was processed using Eviews 12 software with a multiple regression analysis method. The population of this study was all 19 companies listed on the LQ45 in the Indonesia Stock Exchange (IDX) in 2019-2023, with 12 companies being sampled using a purposive sampling technique. The results of this study concluded that earnings management had a significant positive effect on financial performance. GCG, as proxied by institutional ownership, had a positive effect on financial performance, independent commissioners did not have a significant positive effect on financial performance, and the audit committee did not have a significant positive effect on financial performance. Disclosure of sustainability report does not have a significant positive effect on financial performance. Earnings management, GCG, and sustainability report disclosure simultaneously have a significant positive effect on financial performance. The GCG mechanism can monitor earnings management practices so that it can influence improvements in financial performance and improve the quality of sustainability report disclosures.