THE EFFECT OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) PERFORMANCE ON EARNINGS MANAGEMENT: THE MODERATING ROLE OF CORPORATE GOVERNANCE

Authors

  • Ayu Chairina Laksmi
  • Danang Satriadharma Priyanda Universitas Islam Indonesia, Indonesia

DOI:

https://doi.org/10.29040/ijebar.v10i3.20757

Abstract

This study examines the effect of Environmental, Social, and Governance (ESG) performance on earnings management, with gender diversity on the board of commissioners and managerial ownership serving as moderating variables. The study focuses on companies listed on the Indonesia Stock Exchange (IDX) during 2021-2025 period. A quantitative research approach was employed using secondary data obtained from the London Stock Exchange Group (LSEG) database and companies annual reports. The sample
consisted of 51 companies, resulting in 255 firm-year observations selected through purposive sampling. The hypotheses were tested using panel data regression and Moderated Regression Analysis (MRA). The findings indicate that ESG performance does not have a significant effect on earnings management. Furthermore, gender diversity on the board of commissioners does not significantly moderate the relationship between ESG perfomance and earnings management. In contrast, managerial ownership significantly
moderates the relationship between ESG perfomance and earnings management. These findings suggest that the effectivenes of ESG in contraining earnings management depends on the presence of effevtive corporate governance machanisms capable of aligning managers interests with those of shareholders.

Keywords: ESG, eanings management, gender diversity, managerial ownership,

corporate governance

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Published

2026-09-29

How to Cite

Ayu Chairina Laksmi, & Priyanda, D. S. (2026). THE EFFECT OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) PERFORMANCE ON EARNINGS MANAGEMENT: THE MODERATING ROLE OF CORPORATE GOVERNANCE. International Journal of Economics, Business and Accounting Research (IJEBAR), 10(3). https://doi.org/10.29040/ijebar.v10i3.20757

Issue

Vol. 10 No. 3 (2026): IJEBAR: Vol. 10, Issue 3, September 2026

Section

Articles

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