The Effect of Current Tax Expense, Deferred Tax Assets and Dividend Policy on Earnings Management

Abstract

The existence of inflation in income and accounting items, resulting in the company's efforts to engineer financial statements by managing earnings or equalising profits so that the condition of the financial statements looks stable with the previous year, so that the company's image still looks good and can attract investors. This study aims to analyse how the effect of current tax expense, deferred tax assets and dividend policy on Earnings Management in Non Cyclical Consumer Companies Listed on the Indonesia Stock Exchange for the 2017-2021 Period). This research is a type of quantitative research and uses associative methods. The data source used in this research is secondary data taken from the official website of the Indonesia Stock Exchange www.idx.co.id. and other relevant sources. The data analysis technique in this study uses statistical calculations, namely descriptive statistical analysis and panel data regression analysis adjusted based on criteria using purposive sampling method, then obtained data as many as 25 companies. Based on the results of the f test that has been carried out, it can be concluded that current tax expense, deferred tax assets, and dividend policy simultaneously affect earning management. Based on the t test partially current tax expense and deferred tax assets affect earning management, while dividend policy has no effect on earning management. The results of this study indicate that current tax expense and deferred tax assets are related to the earnings management process in a company, where if the company has good tax management it will affect the profit the company will earn.