The Effect of Tax Planning and Deferred Tax Expense on Earnings Management on Manufacturing Companies Listed In The Indonesia Stock Exchange

Abstract

This study aims to examine the effect of tax planning and deferred tax expense on
earnings management practices. Population in the study were all manufacturing
companies listed on the Indonesia Stock Exchange. Sampling method used is
purposive sampling method by using the criterion of research sample data, so that
obtained sample of 84 annually report of manufacturing company during period of
year 2014 – 2016. Data analysis method using descriptive statistical test, classical
assumption test and multiple linear regression. The results of the study provide
empirical evidence that earnings management is not influenced by tax planning and
earnings management are affected negatively and significantly by deferred tax
expense. Meanwhile, simultaneously proves that tax planning and deferred tax
expense have significant effect to earnings management variable. Based on the
coefficient of determination proves that 11,5% variable earnings management can
be explained by variable tax planning and deferred tax expense. While 88,5% other
variables which are not used in this research influence earnings management
variable.
Keywords: TaxjPlanning, DeferrediTaxlExpense, EarningsuManagement