The Role of Audit Committee in Moderating The Effect of PSAK 109 (Financial Instrument) on Earnings Management in Indonesian Banks
DOI:
10.47353/ecbis.v4i6.462Published:
2026-09-01Downloads
Abstract
This study examines the effect of PSAK 109 implementation on earnings management and investigates the moderating role of the audit committee. The study employs a quantitative approach using secondary data from annual reports of banking companies listed on the Indonesia Stock Exchange. The sample comprises 40 banks with 240 observations during the pre-implementation period (2017–2019) and post-implementation period (2022–2024), excluding 2020–2021 due to the impact of the COVID-19 pandemic. Earnings management is proxied by Discretionary Loan Loss Provisions (DLLP), while hypothesis testing is conducted using panel data regression and Moderated Regression Analysis (MRA). The findings reveal that PSAK 109 implementation significantly reduces earnings management practices. In addition, the audit committee significantly moderates the relationship between PSAK 109 and earnings management. These findings highlight the importance of accounting standards and effective governance mechanisms in enhancing the quality of financial reporting in the banking sector.
Keywords:
PSAK 109 Earnings Management Audit Committee Expected Credit Loss BankingReferences
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