Abstract :

This study aims to examine and analyze corporate social responsibility and corporate governance on financial performance and, through earning management as a mediating variable. Financial performance is the dependent variable which is proxied by ROA and MVA. The independent variables in this study were corporate social responsibility as proxied by 91 GRI 4.0 indicators and corporate governance as proxied by independent commissioners and institutional ownership. Earning management as a mediating variable proxied by discretionary accruals. This study uses a sample of 35 mining companies listed on the Indonesia Stock Exchange from 2016 to 2020. The data used in this study is secondary data analyzed using a multiple linear regression analysis path models with the help of SPSS 25 software, and corporate governance has a positive and significant effect on financial performance. Meanwhile, earning management has a negative and significant effect on financial performance. Corporate social responsibility has a positive and significant effect on earning management, while corporate governance has a negative and significant effect on earning management. Earning management mediates full corporate social responsibility on financial performance, while the board of commissioners partially mediates on financial performance.

---

Keywords :

Corporate Governance, Corporate Social Responsibility, Earning Management, Financial performance

---

References :

1. Abduh, M. M., & Rusliati, E. (2018). Mekanisme Good Corporate Governance Dan Kinerja Keuangan. Jurnal Riset Bisnis Dan Manajemen, 11(2), 80–87.
2. Abdul, M., & Makki, M. (2013). Impact of Corporate Governance on Financial Performance. 33(2), 265–280.
3. Abedalqader, A., Hussam, A.-T., Al-Angari, A., & Abdulrahman Alssad, S. (2016). The Effect of Corporate Governance Mechanisms on Earnings Management: Evidence from Saudi Arabia. Review of International Business and Strateg, 26(1). https://doi.org/10.1007/s10997-019-09476-y
4. Adryanti, A. F. (2019). Pengaruh Pilihan Metode Manajemen Laba Akrual dan Rill terhadap Kinerja Keuangan Perusahaan Sektor Manufaktur. Jurnal Studi Akuntansi Dan Keuangan, 2(1), 47–62.
5. Akram, M., Hunjra, A. I., Butt, S., & Ijaz, I. (2015). Earnings Management and Organizational Performance: Pakistan vs India. Basic Research Journal of Business Management and Accounts, 4(9), 211–220.
6. Al-ahdal, W. M., Alsamhi, M. H., Tabash, M. I., & Farhan, N. H. S. (2019). The Impact of Corporate Governance on Financial Performance of Indian and GCC Listed Firms: An Empirical Investigation. Research in International Business and Finance, 101083. https://doi.org/10.1016/j.ribaf.2019.101083
7. Al-ahdal, W. M., Alsamhi, M. H., Tabash, M. I., & Farhan, N. H. S. (2020). The impact of corporate governance on financial performance of Indian and GCC listed fi rms : An empirical investigation. Research in International Business and Finance, 51(September 2018), 101083. https://doi.org/10.1016/j.ribaf.2019.101083
8. Alviansyah, R., & Adiputra, I. G. (2021). Pengaruh Mekanisme GCG dan CSR Terhadap Kinerja Keuangan Yang Dimediasi Manajemen Laba. Jurnal Manajerial Dan Kewirausahaan, 3(1), 24–33.
9. Awais, M., Butt, S., Imran, A. S., & Ijaz, I. (2016). Earnings management and organizational performance: Pakistan VS India. Basic Research Journal of Business Management and Accounts, 4(9), 211–220.
10. Ayu, I. G., & Omika, A. (2019). Pengaruh Carbon Credit , Firm Size , Dan Good Corporate Governance Terhadap Kinerja Perusahaan Pada Perusahaan. 4(1), 62–72.
11. Bag, S., & Omrane, A. (2020). Corporate Social Responsibility and Its Overall Effects on Financial Performance : Empirical Evidence from Indian Companies Corporate Social Responsibility and Its Overall Effects on Financial Performance : Empirical Evidence from Indian. Journal of African Business, 00(00), 1–17. https://doi.org/10.1080/15228916.2020.1826884
12. Braune, E., Charosky, P., & Hikkerova, L. (2019). Corporate Social Responsibility, Financial Performance and Risk in Times of Economic Instability. Journal of Management and Governance.
13. Buertey, S., Jung Sun, E., Soon Lee, J., & 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. https://doi.org/10.1002/csr.1803
14. Bustaram, I., & Risal, Z. (2020). The Effect of Good Corporate Governance on Financial Performance in Conventional and Islamic Banks : An Empirical Studies in Indonesia. International Journal of Economics and Financial Issues, 10(3), 1–6.
15. Cherian, J., Umar, M., Thu, P. A., Nguyen-trang, T., Sial, M. S., & Khuong, N. V. (2019). Does Corporate Social Responsibility Affect the Financial Performance of the Manufacturing Sector ? Evidence from an Emerging Economy. Sustainability, 1–14. https://doi.org/10.3390/su11041182
16. Choi, H., Choi, B., & Byun, J. (2018). The Relationship Between Corporate Social Responsibility and Earnings Management : Accounting for Endogeneity. Investment Management and Financial Innovations, 15(4), 69–84. https://doi.org/10.21511/imfi.15(4).2018.06
17. Dao, B. T. T., & Ngo, H. A. (2020). Impact Of Corporate Governance On Firm Performance And Earnings Management A Study On Vietnamese Non-Financial Companies. Asian Economic and Financial Review, 10(1), 54–63. https://doi.org/10.18488/journal.aefr.2020.101.54.63
18. Deegan, C., & Unerman, J. (2011). Financial Accounting Theory. (2nd Europe). London: McGraw-Hill Higher Education.
19. Dewi, K. (2016). Effect Of Corporate Social Responsibility Disclosure On Financial Performance. Binus Business Review, 7(August), 149–155. https://doi.org/10.21512/bbr.v7i2.1687
20. Ding, R., Li, J., & Wu, Z. (2018). Government a ffi liation , real earnings management , and fi rm performance : The case of privately held fi rms. 83(October 2016), 138–150. https://doi.org/10.1016/j.jbusres.2017.10.011
21. Dwi Wahyuni, P., Angela, D., Oktavia, O., & Bayu Kristanto, S. (2019). Effectiveness of the Implementation Good Corporate Governance and Financial Performance on the Quality of Sustainability Reporting Disclosure. Saudi Journal of Economics and Finance, 3(12), 562–269. https://doi.org/10.3390/su9060867
22. Gras-gil, E., Manzano, M. P., & Fernández, J. H. (2016). Investigating the Relationship Between Corporate Social from Spain. BRQ Business Research Quartely, 19(4), 289–299. https://doi.org/10.1016/j.brq.2016.02.002
23. Gulzar, I., & Haque, S. M. I. (2020). Corporate Governance and Firm Performance in Indian Textile Companies : Evidence from NSE 500. Indian Journal of Corporate Governance, 1–17. https://doi.org/10.1177/0974686220966809
24. Gunawan, B., & Riska, Y. (2018). Pengaruh Pengungkapan Corporate Social Responsibility Terhadap Kinerja Keuangan Yang Dimoderasi Oleh Struktur Kepemilikan. Riset Akuntansi Dan Keuangan Indonesia, 3(1), 58–70.
25. Holly, A., & Lukman, L. (2021). Effect Managerial Ownership, Institutional Ownership, Earning Management on Financial Performance. The Asian Journal of Accounting Research, 04(01), 64–86.
26. Homaidi, E. A. Al, Almaqtari, F. A., & Ahmad, A. (2019). Impact of Corporate Governance Mechanisms on Financial Performance of Hotel Companies : Empirical Evidence from India. African Journal of Hospitality, Tourism and Leisure, 8(2), 1–21.
27. Ikhsan, A., Nurlaila, Bambang Suprasto, H., & Yanti Batubara, F. (2021). Determinant of The Corporate Social Responsibility Disclosure : Evidence of Indonesian Manufacturing Companies. 16(1).

https://doi.org/10.24843/JIAB.2020.v16.i01.p05

28. Jensen, M. C., & Meckling, W. H. (1976). Theory of the Firm : Managerial Behavior , Agency Costs and Ownership Structure Related papers. Journal of Financial Economics, 3(4), 305–360.
29. Jordaan, L., De Klerk, M., & De Villiers, C. J. (2018). Corporate Social Responsibility and Earnings Management of South African Companies. South African Journal of Economic and Management Sciences, 2(1), 1–13.
30. Kalbuana, N., Utami, S., Pratama, A., Teknologi, I., & Dahlan, A. (2020). Pengaruh Pengungkapan Corporate Social Responsibility ,Persistensi Laba dan Pertumbuhan Laba . Terhadap Manajemen Laba pada Perusahaan yang Terdaftar di Jakarta Islamic Index. 6(02), 350–358.
31. Kartika, I., Indriastuti, M., & Sutapa. (2021). The Role of Intellectual Capital and Good Corporate Governance Toward Financial Performance. Jurnal Aset, 13(1), 50–62.
32. Kinasih, H. W., Oktafiyani, M., Akuntansi, P. S., & Nuswantoro, U. D. (2018). Keterkaitan Antara Corporate Social Responsibility Terhadap Manajemen Laba : Sebuah Perspektif Teori Agency. 3(2), 101–109.
33. Kumala, R., & Siregar, S. V. (2019). Corporate Social Responsibility , Family Ownership And Earnings Management : The Case Of Indonesia. https://doi.org/10.1108/SRJ-09-2016-0156
34. Latifah, S. W., Rosyid, M. F., Purwanti, L., & Oktavendi, T. W. (2019). Good Corporate Governance, Kinerja Keuangan Dan Sustainability Report (BUMN yang listed di BEI). Jurnal Riset Akuntansi Dan Keuangan, 9(2), 200–213. https://doi.org/10.22219/jrak.v9i2.56
35. Lin, W. L., Ho, J. A., & Lee, C. (2020). Impact Of Positive And Negative Corporate Social Responsibility On Automotive Firms ’ Financial Performance : A Market-Based Asset Perspective. Corporate Social Responsibility Environmental Management, February, 1–13. https://doi.org/10.1002/csr.1923
36. Luffarelli, J., & Gonçalves, D. (2019). The Effect Of Corporate Social Performance On The Financial Performance Of Business To Business And Business To Consumer Firms. Corporate Social Responsibility Environmental Management, February, 1–18. https://doi.org/10.1002/csr.1750
37. Maharjan, R. (2019). Corporate Governance and Financial Performance of Insurance Companies in Nepal. International Research Journal of Management Science, 4(1).
38. Mahrani, M., & Soewar, N. (2018). The Effect of Good Corporate Governance Mechanism and Corporate Social Responsibility on Financial Performance with Earnings Management as Mediating Variable. Asian Journal of Accounting Research, 3(1), 226–236.
39. Mahrani, M., & Soewarno, N. (2018). The Effect Of Good Corporate Governance Mechanism And Corporate Social Responsibility On Financial Performance With Earnings Management As Mediating Variable. 3(1), 41–60. https://doi.org/10.1108/AJAR-06-2018-0008
40. Makhija, H., & Trivedi, P. (2019). An Empirical Investigation Of The Relationship Between TSR , Value- Based And Accounting-Based Performance Measures. International Journal of Productivity and Performance Management. https://doi.org/10.1108/IJPPM-05-2019-0231
41. Mangkusuryo, Y., & Jati, A. W. (2017). Pengaruh Mekanisme Good Corporate Governance Terhadap Manajemen Laba. Jurnal Riset Akuntansi Dan Keuangan, 7(2), 1067–1080.
42. Maqbool, S., & Zameer, M. N. (2018). Corporate Social Responsibility and Financial Performance : An Empirical Analysis of Indian Banks. Future Business Journal, 4(1), 84–93. https://doi.org/10.1016/j.fbj.2017.12.002
43. Martin, R., Yadiati, W., & Pratama, A. (2018). CSR Disclosure and Company Financial Performance : Do High and Low – Profile Industry Moderate the Result ? Indonesian Journal of Sustainability Accounting and Management, 2(40), 15–24. https://doi.org/10.28992/ijsam.v2i1.42
44. Matar, A., & Eneizan, B. M. (2018). Determinants of Financial Performance in the Industrial Firms : Evidence from Jordan. 22(1), 1–10. https://doi.org/10.9734/AJAEES/2018/37476
45. Mersni, H., & Ben Othman, H. (2016). The Impact of Corporate Governance Mechanisms on Earnings Management in Islamic Banks in The Middle East Region. Journal of Islamic Accounting and Business Research, 7(4), 318–248.
46. Messier, J., & William, F. (2014). Auditing & Assurance Services A Systematic Approach: Jasa Audit & Assurance Pendekatan Sistematis. Jakarta: Salemba Empat.
47. Muda, I., Maulana, W., Siregar, H. S., & Indra, N. (2018). The Analysis of Effects of Good Corporate Governance on Earnings Management in Indonesia with Panel Data Approach. Iranian Economic Review, 22(2), 599–625.
48. (2021). Pengaruh Kepemimpinan Etis Dan Good Corporate Governance Terhadap Kinerja Perusahaan Bumn Di Indonesia. Media Riset Akuntansi, Auditing & Informasi, 21(1), 137–160.
49. Mwangi, C. I., & Jerotich, O. J. (2013). The Relationship between Corporate Social Responsibility Practices and Financial Performance of Firms in the Manufacturing , Construction and Allied Sector of the Nairobi Securities Exchange. International Journal of Business, Humanities and Technology, 3(2), 81–90.
50. Partalidou, X., Zafeiriou, E., & Sariannidis, N. (2020). The effect of corporate social responsibility performance on financial performance : the case of food industry. Benchmarking: An International Journal, 2280. https://doi.org/10.1108/BIJ-11-2019-0501
51. Peters, G. T. (2014). Corporate Governance Mechanisms and Financial Performance of Listed Firms in Nigeria : A Content Analysis. 2, 103–128.
52. Rading Outa, E., Eisenberg, P., & K Ozili, P. (2017). The Impact of Corporate Governance Code on Earnings Management in Listed NonFinancial Firms: Evidence from Kenya. Journal of Accounting in Emerging Economies.
53. Rahmawardani, D. D. (2020). Corporate Social Responsibility Terhadap Manajemen Laba Dan Kinerja Perusahaan. 12(2), 52–59.
54. Rahmawati, I. A. (2017). Pengaruh Dewan Direksi, Dewan Komisaris, Komite Audit Dan Corporate Social Responsibility Terhadap Kinerja Keuangan Perusahaan (Studi Kasus pada Perusahaan Sub Sektor Pertambangan Batu Bara yang terdaftar di Bursa Efek Indonesia Tahun 2013-2015). Jurnal Akuntansi, 2(2), 54–70.
55. Sehrawat, K. N., Kumar, A., Lohia, N., Bansal, S., & Agarwal, T. (2019). Impact of Corporate Governance on Earnings Management : Large Sample Evidence from India. Asian Economic and Financial Review, 9(12), 1335–1345. https://doi.org/10.18488/journal.aefr.2019.912.1335.1345
56. Setiawan, M. H. (2015). Pengaruh Mekanisme Corporate Governance Terhadap Kinerja Keuangan Dengan Manajemen Laba Sebagai Variabel Intervening. Jurnal Manajerial Dan Kewirausahaan.
57. Setyarini, M., Manggala Putra, A., & Nugraheni, R. (2021). Perubahan Ukuran Komite Audit dan Dewan Direksi terhadap Kinerja Keuangan pada Perusahaan Sektor Keuangan. Jurnal Akuntansi Aktual, 8(1), 65–75.
58. Siregar, B. G. (2017). Corporate Social Responsibility In Minimizing Earnings.
59. Sitanggang, R. P., & Ratmono, D. (2019). Pengaruh Tata Kelola Perusahaan dan Pengungkapan Tanggung Jawab Ssosial Perusahaan terhadap Kinerja Keuangan Dengan Manajemen Laba Sebagai Variabel Mediasi. Diponegoro Journal of Accounting, 8(4).
60. Situmorang, C. V., & Simanjuntak, A. (2019). Pengaruh Good Corporate Governance Terhadap Kinerja Keuangan Perusahaan Perbankan Yang Terdaftar Di Bursa Efek Indonesia. Jurnal Akuntansi Dan Bisnis, 5(November), 160–169. https://doi.org/10.31289/jab.v5i2.2694
61. Thanh, B. T., & Ngo, H. A. (2020). Impact Of Corporate Governance On Firm Performance And Earnings Management A Study On Vietnamese Non-Financial Companies. Asian Economic and Financial Review, 10(5), 480–501. https://doi.org/10.18488/journal.aefr.2020.105.480.501
62. Wahyu, S., & Widiatmi, A. (2019). Interaksi Manajemen Laba Dalam Pengungkapan Corporate Social Responsibility Dan Kinerja. 2(2), 139–153.
63. Wahyuningsih, A., & Rasmini, N. K. (2020). CSR Disclosure on Earnings Management with the Presence of Women in the GCG Structure. Jurnal Ilmiah Akuntansi Dan Bisnis, 15(2).
64. Wang, Y., Liu, J., Sui, X., & Liu, L. (2020). Does Corporate Social Responsibility improve financial performance? -evidence from pure green side. Finance Research Letters, 101522. https://doi.org/10.1016/j.frl.2020.101522
65. Wijaya, Y., & Trisnawati, E. (2021). Tanggung Jawab Sosial Dan Modal Intelektual Terhadap Kinerja Keuangan Perusahaan Manufaktur Konsumsi. Jurnal Multiparadigma Akuntansi, III(1), 435–443.