The Influence of Leverage and Its Size on the Earnings Management

This study aimed to determine the effect of leverage and firm size on earnings management. Sampling was done by purposive sampling method with the criteria listed in the Indonesia Stock Exchange and has a complete set of financial statements. The study sample consisted of 30 manufacturing companies, used multiple regression analysis techniques and to test the research hypothesis, F test and t test.From the results of calculations using SPSS for Windows version 20, showed that: 1) The value of operating leverage coefficient of 0.215, significant operating leverage affect earnings management by 21.5%; 2) financial leverage coefficient of 0.505, meaning financial leverage affect earnings management by 50.5%; 3) The size of the company coefficient of 0.417, meaning the size of the company affect earnings management of 41.7%.Rated R square (R2) of 0.603, illustrates that earnings management (Y), can be explained by the operating leverage, financial leverage, and the size of the company amounted to 60.3%, while the remaining 39.7%, can be explained by other factors, which are not included in this study.From the results of hypothesis testing F, obtained value of F (2,082) <F table (2.769), this means that there is no effect of operating leverage, financial leverage, and the size of the companies jointly to earnings management. While the results of hypothesis testing t, obtained the following results: 1) tcount (-0.537) <t table (1.672) which means that there is no effect of operating leverage on earnings management; 2) tcount (-0.153) <t table (1.672) which means that there is no financial leverage effect on earnings management; 3) tcount (0.686) <t table (1.672) which means that there is no effect of firm size on earnings management. Keywords: operating leverage, financial leverage, firm size, earnings managemen