ABSTRACT
A steady increase in profits will provide a sense of security in terms of investment. The management strategy commonly used at all times is income smoothing. The information presented in financial statements is a consideration for management carrying out income-smoothing practices. This investigation intends to determine the effect of profitability and company size on income-smoothing practice with industry type as a moderating variable. The type of data in this study includes quantitative data and secondary data obtained from the financial statements of each company. The population in this study is companies listed on the Indonesia Stock Exchange from 2014 to 2017. The sampling method uses a purposive sampling method. Selected samples according to criteria amounted to 63 companies from the financial and manufacturing sectors. The data analysis technique uses logistic regression analysis with interaction tests, or moderated regression analysis (MRA), because the dependent variable is a dummy variable, and there are moderating variables. Results of this study indicate that (1) profitability does not affect the practice of income smoothing; (2) company size influences the practice of income smoothing; (3) type of industry is not able to moderate profitability against income smoothing practices; and (4) type of industry can moderate the size of the company against the practice of income smoothing.
