This research aims to determine factors affecting income smoothing from the positive accounting theory hypothesis viewpoint. Using a logistic regression analysis, it analysed how such variables as a firm size, a bonus, a debt covenant, reputation of Big Four Audit Firms, institutional ownership, managerial ownership, independent commissioners, and the audit committees, affect the firms' income smoothing practices. The data of this research was sourced from the financial statements of listed non-financing companies in Indonesia Stock Exchange (IDX) of 762 samples from the period of 2011-2013. The dependent variable in this research was income smoothing firm status. With a 5% significance level, the results of this research show that the firm size, the bonus, and the audit committee significantly influence income smoothing, while the other variables have no significant effect. The study concludes that the firm size, the bonus, and the audit committee can influence income smoothing practices.
|Number of pages||17|
|Journal||International Journal of Innovation, Creativity and Change|
|Publication status||Published - 2020|
- Corporate governance
- Income smoothing
- Positive accounting theory
- Reputation of big four audit firms