• Nia Mardiana Nia Universitas Brawijaya
  • Nila Firdausi Nuzula Universitas Brawijaya
  • Cacik Rut Damayanti Universitas Brawijaya



Keywords: Corporate Governance, Corporate Social Responsibility, Accounting Conservatism, Earnings Management, Indonesia’s SOE Company


This study aims to analyze the implementation of governance practices and social activities in minimizing earnings management practices by strengthening conservative reporting practices in Indonesian state-owned companies. This study uses an explanatory model and uses 10 SOE companies listed on IDX 2014-2019 as a sample. Our findings reveal that the corporate governance has no significant effect on conservative financial reporting practices so that this triggers the ineffectiveness of companies in avoiding earnings management practices. Meanwhile, it was found that CSR practices had a significant effect in minimizing managers in SOE companies to act opportunistically, but did not significantly affect implementing conservative reporting practices.

Author Biography

Nia Mardiana Nia, Universitas Brawijaya

Master Student in Faculty Administrative of Science, Brawijaya University, Malang, Indonesia


ACFE Indonesia Chapter. (2019). Survai Fraud Indonesia 2019. Acfe Indonesia Chapter, 76.

Alim, S. (2013). Accrual dan Real Earning Management dalam Merespon Penurunan Tarif Pajak Penghasilan Badan Tahun 2010. Jurnal Keuangan Dan Perbankan, 17(2), 253–266.

Alkurdi, A., Al-Nimer, M., & Dabaghia, M. (2017). Accounting conservatism and ownership structure effect: A look at industrial and financial jordanian listed companies. Journal of Environmental Accounting and Management, 5(2), 153–169.

Almutairi, A. R., & Quttainah, M. A. (2019). Corporate governance and accounting conservatism in Islamic banks. Thunderbird International Business Review, 61(5), 745–764.

Bonazzi, L., & Islam, S. M. . (2007). Agency theory and corporate governance: A study of the effectiveness of board in their monitoring of the CEO. Journal of Modelling in Management, Vol. 2(No. 1), 7–23.

Buertey, S., Sun, E. J., Lee, J. S., & Hwang, J. (2020). Corporate social responsibility and earnings management: The moderating effect of corporate governance mechanisms. Corporate Social Responsibility and Environmental Management, 27(1), 256–271.

Caskey, J., & Laux, V. (2017). Corporate governance, accounting conservatism, and manipulation. Management Science, 63(2), 424–437.

Chen, J. J., & Zhang, H. (2014). The Impact of the Corporate Governance Code on Earnings Management - Evidence from Chinese Listed Companies. European Financial Management, 20(3), 596–632.

Cheng, C. L., & Kung, F. H. (2016). The effects of mandatory corporate social responsibility policy on accounting conservatism. Review of Accounting and Finance, 15(1), 2–20.

Cnbc Indonesia. (2019). Gara-gara Lapkeu, Deretan KAP Ini Malah Kena Sanksi OJK. Retrieved from

Dwiridotjahjono, J. (2009). Penerapan Good Corporate Governance : Manfaat Dan Tantangan Serta Kesempatan Bagi Perusahaan Publik Di Indonesia. Jurnal Administrasi Bisnis Unpar, 5(2), 101–112.

El Diri, M., Lambrinoudakis, C., & Alhadab, M. (2020). Corporate governance and earnings management in concentrated markets. Journal of Business Research, 108(October 2019), 291–306.

Fama, E. F., & Jensen, M. C. (2019). Separation of ownership and control. Corporate Governance: Values, Ethics and Leadership, XXVI(June), 163–188.

Francis, R. N., Harrast, S., Mattingly, J., & Olsen, L. (2013). The relation between accounting conservatism and corporate social performance: An empirical investigation. Business and Society Review, 118(2), 193–222.

García Lara, J. M., García Osma, B., & Penalva, F. (2009). Accounting conservatism and corporate governance. Review of Accounting Studies, 14(1), 161–201.

Gras-Gil, E., Palacios Manzano, M., & Hernández Fernández, J. (2016). Investigating the relationship between corporate social responsibility and earnings management: Evidence from Spain. BRQ Business Research Quarterly, 19(4), 289–299.

Grougiou, V., Leventis, S., Dedoulis, E., & Owusu-Ansah, S. (2014). Corporate social responsibility and earnings management in U.S. banks. Accounting Forum, 38(3), 155–169.

Handoko, M., & Ahmar, N. (2016). The effect of accrual earnings management, using Khotari Model Approach, on the performance of manufacturing companies listed in Indonesia Stock Exchange. The Indonesian Accounting Review, 5(1), 11.

Haque, A., Mughal, A., & Zahid, Z. (2016). Earning Management and the Role of Accounting Conservatism at Firm Level. International Journal of Economics and Finance, 8(2), 197.

Hong, S. (2020). Corporate social responsibility and accounting conservatism. International Journal of Economics and Business Research, 19(1), 1–18.

Kartasasmita, P. S. (2020). Corporate Social Responsibility Disclosure by State-Owned Enterprises in Indonesia. International Journal of Economics and Business Administration, VIII(1), 327–339.

Kassem, R. (2013). Earnings Management and Financial Reporting Fraud: Can External Auditors Spot the Difference? American Journal of Business and Management, 2(1), 30.

Leventis, S., Dimitropoulos, P., & Owusu-Ansah, S. (2013). Corporate governance and accounting conservatism: Evidence from the banking industry. Corporate Governance: An International Review, 21(3), 264–286.

Lin, F., Wu, C. M., Fang, T. Y., & Wun, J. C. (2014). The relations among accounting conservatism, institutional investors and earnings manipulation. Economic Modelling, 37, 164–174.

Linggau Pos. (2018). Realisasi CSR Amanah Undang-undang.

Murdock, D. H. (2018). Association of Certified Fraud Examiners (ACFE). Auditor Essentials, 7–10.

Nasr, M. A., & Ntim, C. G. (2018). Corporate governance mechanisms and accounting conservatism: evidence from Egypt. Corporate Governance (Bingley), 18(3), 386–407.

Otoritas Jasa Keuangan. (2014). Peraturaan Otoritas Jasa Keuangan Nomor 33/POJK.04/2014 Tentang Direksi dan Dewan Komisaris Emiten Atau Perusahaan Publik. 33. Direksi dan Dewan Komisaris Emiten Atau Perusahaan Publik.pdf

Puspitaningrum, D., & Atmini, S. (2012). Corporate Governance Mechanism and the Level of Internet Financial Reporting: Evidence from Indonesian Companies. Procedia Economics and Finance, 2(Af), 157–166.

Rahayu, S. M., Ramadhanti, W., Rahayu, D. S., Osada, H., & Indrayanto, A. (2019). Gender Stereotypes in Indonesian Public Companies’ Performance. Jurnal Aplikasi Manajemen, 17(1), 1–7.

Savitri, E. (2016). Konservatisme Akuntansi. 113.

Utama, C. A., Utama, S., & Amarullah, F. (2017). Corporate governance and ownership structure: Indonesia evidence. Corporate Governance (Bingley), 17(2), 165–191.

Wang, L. (2015). Board Gender Diversity and Accounting Conservatism: Evidence from Finland. Master Thesis, December, 1–74.

Worang, F. G., & Holloway, D. A. (2006). Corporate governance in Indonesian State-Owned Enterprises: Feeding with western ingredients. Corporate Ownership and Control, 4(2 B), 205–215.

Xia, D., & Zhu, S. (2009). Corporate Governance and Accounting Conservatism in China. China Journal of Accounting Research, 2(2), 81–108.

Xie, B., Davidson, W. N., & Dadalt, P. J. (2003). Earnings management and

corporate governance: The role of the board and the audit committee. Journal of Corporate Finance, 9(3), 295–316.