Author(s): Yulius Kurnia Susanto, Arya Pradipta, Ellen Cecilia
The aim of this research is to provide empirical evidence about the influence of Employee Stock Ownership Programs (ESOP), information asymmetry, leverage, profitability, firm size, managerial ownership, institutional ownership, audit quality, and firm age on earnings management. Sample of this research are 87 non-financial companies listed in Indonesia Stock Exchange during the research period 2014 until 2016, thus totaled 261 data. Sample selection method used was purposive sampling. Data were analyzed using multiple regression analysis. The empirical evidence of this research indicated that ESOP, profitability, firm size, and firm age influence on earnings management. While, information asymmetry, leverage, managerial ownership, institutional ownership, and audit quality don’t influence on earnings management. ESOP is attractive in Indonesia as a way to reduce agency problems between shareholders and managers. The purpose of ESOP is to create alignment of interests and mission of employees and executives with shareholders interest and mission. ESOP can be considered a long term incentives provided by the company to engage a sense of belonging by the employee to the company. This believed can increased the employee productivity and company performance.