ABSTRACT
The purpose of this study was to determine the effect of bank efficiency on earnings management behavior at ASEAN banks. Bank efficiency included in this study was cost and profit, where the measurement employed the stochastic frontier analysis model. The data used in this study were banks listed on stock exchanges in ASEAN in the period 2010–2017. Panel data regression analysis was used to test the effect of cost and profit efficiency on earnings management. This study also employed control variables which consisted of bank size, credit risk, liquidity risk, and financial leverage. The results of the study showed that both cost efficiency and profit efficiency had a significant effect on earnings management, and the control variables that had a significant effect on earnings management were credit risk and liquidity risk.
