The Role Of Good Corporate Governance In Minimizing Earning Management To Increase Value Of Firm
Journal: International Journal of Scientific & Technology Research (Vol.4, No. 9)Publication Date: 2015-09-15
Authors : Mardiani Tanjung; Sucherly; Sutisna; Rahmat sudarsono;
Page : 21-27
Keywords : Keyword Good corporate governance; earning management; value of firms;
Abstract
Abstract The theory of an agency problem describes about the conflict of the agents interests and the principal which influence the value of a firm. The gap of information between them puts an agent in certain places to become more superior than the principal to do earning management. Good corporate governance is as a controlling mechanism and a balancing system in the company in accommodating the interest of the agent and the principal. The purpose of this paper is to present a conceptual model of best corporate governance role earning management the value of the firm by adding a compensation as another variable to minimize earning management. Good corporate governance consists of the three mechanisms which are Institutional shareholders Independent commissioner and executive compensation.
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