Corporate Social Responsibility Disclosure on Earnings Management
Keywords:
Agency Theory, Corporate Social Responsibility, Earnings Management, Indonesia Stock Exchange, Manufacturing CompaniesAbstract
This study aims to empirically examine the effect of Corporate Social Responsibility (CSR) disclosure on earnings management in manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2020–2023 period. Fluctuations in Indonesia’s manufacturing sector, reflected in the Purchasing Managers’ Index (PMI), indicate the pressure faced by companies to maintain stable profits and corporate image, particularly during periods of economic uncertainty. In such situations, CSR disclosure is often used not only as a form of accountability but also as a legitimacy strategy to manage stakeholder perceptions. Using a quantitative approach, data were collected from 31 manufacturing companies, totaling 124 firm-year observations. CSR disclosure was measured based on GRI G4 standards, while earnings management was assessed using the Modified Jones Model. The analysis employed multiple linear regression via SPSS 25. The results show that CSR disclosure has a positive and statistically significant effect on earnings management (t = 11.544, sig. = 0.000), with the model explaining 52.2% of the variance in earnings management. These findings support agency theory and align with previous research indicating that CSR can be strategically used by managers to obscure opportunistic financial behavior. The study contributes to the accounting and corporate governance literature by highlighting the dual function of CSR and offers practical recommendations for improving transparency and accountability in the manufacturing sector.Downloads
Download data is not yet available.
References
ANTARA News. (2024). Manufacturing industry stands strong amid election agendas – minister. https://en.antaranews.com/news/304656/manufacturing-industry-stands-strong-amid-election-agendas-minister?utm_source=chatgpt.com
Brahem, E., Depoers, F. and Lakhal, F. (2022). "Corporate social responsibility and earnings quality in family firms". Journal of Applied Accounting Research. Vol. 23 No. 5, pp. 1114-1134. https://doi.org/10.1108/JAAR-05-2021-0139
CNBC Indonesia. (2023, February 9). Modus proyek fiktif, Waskita manipulasi laporan keuangan sejak 2016. Retrieved from https://www.cnbcindonesia.com/news/20230209124240-4-410123/modus-proyek-fiktif-waskita-manipulasi-laporan-keuangan-sejak-2016
Financial Services Authority (OJK). (2017). Peraturan Otoritas Jasa Keuangan Nomor 51/POJK.03/2017 tentang Penerapan Keuangan Berkelanjutan bagi Lembaga Jasa Keuangan, Emiten, dan Perusahaan Publik. Otoritas Jasa Keuangan, Jakarta.
Hariyani, D. S., Purwati, T., Wasito, W., Ermawati, N., & Azizah, M. (2022). Corporate Social Responsibility: Costs and Revenue. In Advances in Social 116 Science, Education and Humanities Research (Vol. 630, pp. 330–335). Atlantis Press. https://doi.org/10.2991/assehr.k.220404.050
Healy, P. M., & Wahlen, J. M. (1999). A Review of the Earnings Management Literature and Its Implications for Standard Setting. Accounting Horizons, 13(4), 365–383. https://doi.org/10.2308/acch.1999.13.4.365
Hickman, L.E., Iyer, S.R., & Jadiyappa, N. (2021). The Effect of Voluntary and Mandatory Corporate Social Responsibility on Earnings Management: Evidence From India and the 2% Rule. Emerging Markets Review, (46).
Jensen, M. C., & Meckling, W. H. (1967). Theory Of The Firm : Managerial Behavior, Agency Costs And Ownership Structure (1st Ed.).
Lestari, I. (2021, Oktober 2). PMI manufaktur RI cetak rekor tertinggi sepanjang sejarah di 57,2. CNBC Indonesia. https://www.cnbcindonesia.com/news/20211002110537-4-280159/pmi manufaktur-ri-cetak-rekor-tertinggi-sepanjang-sejarah-di-572
Nguyen, T.T., Doan., P.N., & Vuong, H.K. (2024). Corporate social responsibility and earnings management: Evidence from Vietnam. Asian Academy of Management Journal, 29(1), 127–142. https://doi.org/10.21315/aamj2024.29.1.5
Nugrahani, T. S., Kusuma, H., Arifin, J., & Muhammad, R. (2023). Determinants of Sustainability Report Quality in Indonesian Public Companies: An Isomorphism Theory Approach. International Journal of Sustainable Development and Planning, 18(12), 3910–3918. https://doi.org/10.18280/ijsdp.181222
Prameswari i, N. P. A. S., Suaryana, I. G. A. N., Sujana, I. K., & Rasmini, N. K. (2022). Good corporate governance moderates the effect of corporate social responsibility disclosure, financial distress and managerial ability on earnings management with variable. International Journal of Business, Economics & Management, 5(4), 453-462. https://doi.org/10.21744/ijbem.v5n4.2038
Pramudianti, P. (2024). Pengaruh Leverage, Pengungkapan Corporate Social Responsibility (CSR), dan Penerapan Green Accounting Terhadap Manajemen Laba dengan Good Corporate Governance Sebagai Variabel Moderasi. Universitas Tidar.
Riadh, G. (2021). Corporate Social Responsibility and Earnings Management: Evidence from Saudi Arabia after Mandatory IFRS Adoption. The Journal of Asian Finance, Economics and Business. 8(9). 189-199. https://doi.org/10.13106/jafeb.2021.vol8.no9.0189
Rivan Kurniawan. (2020, Oktober 23). PMI Manufaktur Indonesia kontraksi, ditandai dengan banyaknya pabrik yang tutup, manufaktur mana saja yang paling terdampak? Diakses dari blog Rivan Kurniawan. https://blog.rivankurniawan.com/2020/10/23/pmi-manufaktur-indonesia-kontraksi/?utm_source=chatgpt.com
Santos Jaén, J. M., León Gómez, A., & Serrano Madrid, J. (2021). The effect of corporate social responsibility on earnings management: Bibliometric review. International Journal of Financial Studies, 9(4), 68. https://doi.org/10.3390/ijfs9040068
Scott, W. R. (2015). Financial Accounting Theory (7th ed.). Pearson Education Canada.
Sinaga, R., Maksum, A., & Gultom, P. (2023). The Effect of Corporate Social Responsibility Disclosure, Dividend Policy on Earning Management with Audit Quality as Moderation Variable in Listed Manufacturing Companies in Indonesian Stock Exchange (2018-2022). International Journal of Current Science Research and Review. 06.
Solikhah, I. (2022). Pengaruh Pengungkapan Corporate Social Responsibility (CSR) Terhadap Profitabilitas dan Manajemen Laba (Studi Empiris Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia (BEI) Tahun 2015-2017).Jurnal Akuntansi AKUNESA, 10(2), 94-106.
Brahem, E., Depoers, F. and Lakhal, F. (2022). "Corporate social responsibility and earnings quality in family firms". Journal of Applied Accounting Research. Vol. 23 No. 5, pp. 1114-1134. https://doi.org/10.1108/JAAR-05-2021-0139
CNBC Indonesia. (2023, February 9). Modus proyek fiktif, Waskita manipulasi laporan keuangan sejak 2016. Retrieved from https://www.cnbcindonesia.com/news/20230209124240-4-410123/modus-proyek-fiktif-waskita-manipulasi-laporan-keuangan-sejak-2016
Financial Services Authority (OJK). (2017). Peraturan Otoritas Jasa Keuangan Nomor 51/POJK.03/2017 tentang Penerapan Keuangan Berkelanjutan bagi Lembaga Jasa Keuangan, Emiten, dan Perusahaan Publik. Otoritas Jasa Keuangan, Jakarta.
Hariyani, D. S., Purwati, T., Wasito, W., Ermawati, N., & Azizah, M. (2022). Corporate Social Responsibility: Costs and Revenue. In Advances in Social 116 Science, Education and Humanities Research (Vol. 630, pp. 330–335). Atlantis Press. https://doi.org/10.2991/assehr.k.220404.050
Healy, P. M., & Wahlen, J. M. (1999). A Review of the Earnings Management Literature and Its Implications for Standard Setting. Accounting Horizons, 13(4), 365–383. https://doi.org/10.2308/acch.1999.13.4.365
Hickman, L.E., Iyer, S.R., & Jadiyappa, N. (2021). The Effect of Voluntary and Mandatory Corporate Social Responsibility on Earnings Management: Evidence From India and the 2% Rule. Emerging Markets Review, (46).
Jensen, M. C., & Meckling, W. H. (1967). Theory Of The Firm : Managerial Behavior, Agency Costs And Ownership Structure (1st Ed.).
Lestari, I. (2021, Oktober 2). PMI manufaktur RI cetak rekor tertinggi sepanjang sejarah di 57,2. CNBC Indonesia. https://www.cnbcindonesia.com/news/20211002110537-4-280159/pmi manufaktur-ri-cetak-rekor-tertinggi-sepanjang-sejarah-di-572
Nguyen, T.T., Doan., P.N., & Vuong, H.K. (2024). Corporate social responsibility and earnings management: Evidence from Vietnam. Asian Academy of Management Journal, 29(1), 127–142. https://doi.org/10.21315/aamj2024.29.1.5
Nugrahani, T. S., Kusuma, H., Arifin, J., & Muhammad, R. (2023). Determinants of Sustainability Report Quality in Indonesian Public Companies: An Isomorphism Theory Approach. International Journal of Sustainable Development and Planning, 18(12), 3910–3918. https://doi.org/10.18280/ijsdp.181222
Prameswari i, N. P. A. S., Suaryana, I. G. A. N., Sujana, I. K., & Rasmini, N. K. (2022). Good corporate governance moderates the effect of corporate social responsibility disclosure, financial distress and managerial ability on earnings management with variable. International Journal of Business, Economics & Management, 5(4), 453-462. https://doi.org/10.21744/ijbem.v5n4.2038
Pramudianti, P. (2024). Pengaruh Leverage, Pengungkapan Corporate Social Responsibility (CSR), dan Penerapan Green Accounting Terhadap Manajemen Laba dengan Good Corporate Governance Sebagai Variabel Moderasi. Universitas Tidar.
Riadh, G. (2021). Corporate Social Responsibility and Earnings Management: Evidence from Saudi Arabia after Mandatory IFRS Adoption. The Journal of Asian Finance, Economics and Business. 8(9). 189-199. https://doi.org/10.13106/jafeb.2021.vol8.no9.0189
Rivan Kurniawan. (2020, Oktober 23). PMI Manufaktur Indonesia kontraksi, ditandai dengan banyaknya pabrik yang tutup, manufaktur mana saja yang paling terdampak? Diakses dari blog Rivan Kurniawan. https://blog.rivankurniawan.com/2020/10/23/pmi-manufaktur-indonesia-kontraksi/?utm_source=chatgpt.com
Santos Jaén, J. M., León Gómez, A., & Serrano Madrid, J. (2021). The effect of corporate social responsibility on earnings management: Bibliometric review. International Journal of Financial Studies, 9(4), 68. https://doi.org/10.3390/ijfs9040068
Scott, W. R. (2015). Financial Accounting Theory (7th ed.). Pearson Education Canada.
Sinaga, R., Maksum, A., & Gultom, P. (2023). The Effect of Corporate Social Responsibility Disclosure, Dividend Policy on Earning Management with Audit Quality as Moderation Variable in Listed Manufacturing Companies in Indonesian Stock Exchange (2018-2022). International Journal of Current Science Research and Review. 06.
Solikhah, I. (2022). Pengaruh Pengungkapan Corporate Social Responsibility (CSR) Terhadap Profitabilitas dan Manajemen Laba (Studi Empiris Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia (BEI) Tahun 2015-2017).Jurnal Akuntansi AKUNESA, 10(2), 94-106.
Downloads
Published
2025-07-21
Issue
Section
Articles
How to Cite
Corporate Social Responsibility Disclosure on Earnings Management. (2025). Proceeding of International Conference on Economics, Technology, Management, Accounting, Education, and Social Science (ICETEA), 1, 74-83. https://conference.unita.ac.id/index.php/icetea/article/view/327
