The Impact of Free Cash Flow and Good Corporate Governance (GCG) Earning Management of the Banking Companies Listed on the Indonesia Stock Exchange

According to the Statement of Financial Accounting Concepts (SFAC) No. 1, the earnings information is a major concern for measuring performance or accountability of management. Earnings information also helps the owner or other party in measuring the power company's earnings in the future. This has created an opportunity for management to take action that can make financial reports into looks better, the manager's actions sometimes conflict with the company's goals. In defiance of the one form is earnings management (earnings management) (Mohammad Sani et all 2012). Earnings management is the impact on the freedom of a manager to choose According to Healy and Wahlen (in Theresia, 2005) earnings management is the management's efforts to change the financial statements intended to mislead shareholders who want to know the company's performance or to effect a financial report containing the earnings information. Earnings management is the impact of a manager the freedom to select and use certain accounting methods when record and organize information in the financial statements. The concept of corporate governance is in essence calls for better transparency to all users of financial statements. Based on these financial statements, it will be seen whether the performance of the company has good governance and effective (good corporate governance) and the governance of whether it can reduce the opportunistic behavior of management within the company (Cornett et all, 2008). The study concluded that an independent commissioner has positive effect but not significant to earnings management or profit management. Sylvia Veronica N.P. Siddharta Sirregar and Main (2005), the proportion of independent directors and a significant negative effect on the income smoothing (earnings management) oporunitis. Cornet et.al (2006). Institutional ownership has no significant effect on earnings management. The bigger the stake, the smaller the earnings management practices that occur. Palestine (2006) and Nuryaman (2008) Companies with free cash flow (free cash flow) is high will have greater opportunities to make profit management, because the company indicated face greater agency problems (Chung et al, 2005). Free cash flow or free cash flow is defined as cash flow actually available for distribution to shareholders and creditors after the company invested in fixed assets and working capital needed to sustain the operations of the company. Brigham and Daves (2003) The object of research in this study is perbankan.Industri banking industry has different characteristics with other industries. The banking industry has tighter regulation than any other industry, for example, a bank must have a Capital Adequacy Ratio (CAR) minimum and provide financial statements as a healthy determination whether or not a bank by Bank Indonesia Free cash flow Variable positive influence on income smoothing practices. according Negrea (2009) good corporate governance is the proportion of independent board significant positive effect on earnings management. Muh.Arief Ujiyantho (2007) Partially independent board which is a negative effect on earnings management. Is'da Rahmawati (2013) Based on the background that has been presented, the consistency is not the research that has been there a reason to re-examine the research title "Effect of Free Cash Flow and Good Corporate Governance (GCG) Profit Management Of The Banking Companies listed in Indonesia Stock Exchange Year 2010-2013 "to be important to investigate