The Effect of Profitability and Firm Size on Earnings Quality with Good Corporate Governance as a Moderating Variable
DOI:
https://doi.org/10.47768/gema.v16i2.202403Keywords:
Profitability, firm size, earnings quality, corporate governance.Abstract
Although the food and beverage sector contribute significantly to the economy, it struggles to maintain high-quality profitability, which may erode investor trust. The purpose of the research is to investigate how business size and profitability affect the quality of earnings, as well as how Good Corporate Governance (GCG) influences these relationships. Thirteen food and beverage firms listed on Bursa Efek Indonesia (BEI) between 2019 and 2023 are selected using a quantitative technique. Partial Least Squares (PLS) with SmartPLS 4.0 software is used for analysis. The findings indicate that while business size has a considerable negative impact on earnings quality, profitability has a significant favorable impact. Nevertheless, these interactions are not substantially impacted by GCG moderation. The study's implications emphasize the significance of firm size and profitability in terms of earnings quality, which is pertinent for regulators and investors assessing the performance of businesses. It is suggested that future studies investigate additional moderating factors and broaden the sample to include additional industry sectors.
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