Earnings Management As A Moderator On The Effect Of Information Asymmetry On The Cost Of Equity Capital

Authors

  • Dian Urna Fasihat Fasihat Sekolah Tinggi Ilmu Ekonomi Yapis
  • Rizkiana Iskandar Iskandar Sekolah Tinggi Ilmu Ekonomi Yapis

DOI:

https://doi.org/10.38035/dijefa.v5i4.3367

Keywords:

Information Asymmetry, Earnings Management, Cost of Equity Capital

Abstract

 

To maximize the company's value, management must aim to reduce the Cost of Equity Capital (CEC) as much as possible. Investors will assume that the company's risk is low when the CEC is low, which in turn will enhance the company's value. However, the reality in Indonesia shows the opposite; the CEC of companies has been increasing year after year. Based on this phenomenon, it is necessary to examine the factors influencing CEC. Agency theory suggests that information asymmetry and earnings management can affect CEC. This study aims to test the direct effects of information asymmetry on CEC and earnings management on CEC, as well as the indirect effect of information asymmetry on CEC using earnings management as a moderating variable. The results of the data analysis show that information asymmetry affects earnings management and CEC. Furthermore, it was found that earnings management does not affect CEC. However, earnings management can moderate the relationship between information asymmetry and CEC

Author Biographies

Dian Urna Fasihat Fasihat, Sekolah Tinggi Ilmu Ekonomi Yapis

Manajemen

Rizkiana Iskandar Iskandar, Sekolah Tinggi Ilmu Ekonomi Yapis

Accounting

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Published

2024-10-05

How to Cite

Fasihat, D. U. F., & Iskandar, R. I. (2024). Earnings Management As A Moderator On The Effect Of Information Asymmetry On The Cost Of Equity Capital. Dinasti International Journal of Economics, Finance &Amp; Accounting, 5(4), 4637–4646. https://doi.org/10.38035/dijefa.v5i4.3367

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Vol. 5 No. 4 (2024): Dinasti International Journal of Economics, Finance & Accounting (September - October 2024)

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