ABSTRACT
Corporate governance is a system that directs and controls the company (FCGI, 2001). By implementing corporate governance, it is expected that the manipulation of financial statements by managers will be reduced. The purpose of this study is to provide empirical evidence of the influence of the adoption of the International Financial Reporting Standard (IFRS) on earnings management and the Good Corporate Governance (GCG) mechanism in moderating the relationship between IFRS adoption and earnings management. This research used data of a total of 120 banking companies listed on the Indonesia Stock Exchange (IDX) during 2007 to 2014. Hypothesis testing in this research was conducted using a moderated regression analysis test. The results show a decrease in the level of earnings management at the time of the adoption of IFRS in banking companies in Indonesia. However, GCG mechanisms cannot moderate the influence of IFRS adoption on earnings management.
