Do CEO Characteristics Influence Earnings Management?
Keywords:
CEO Narcissism, CEO Tenure, CEO Ownership, CEO characteristics, Earnings ManagementAbstract
Earnings management remains a prevalent phenomenon in Indonesia, particularly within industries experiencing structural pressure. This study investigates the influence of Chief Executive Officer (CEO) on earnings management practices. The research focuses on textile and garment companies listed on the Indonesia Stock Exchange (IDX) from 2018 to 2024. Employing a quantitative approach with panel data regression, this study analyzes 105 firm-year observations from 15 companies selected through purposive sampling. Earnings management is measured using discretionary accruals calculated through the Modified Jones Model. CEO narcissism is assessed using unobtrusive indicators based on CEO photo dimensions in annual reports, CEO tenure is calculated as the difference between the observation year and the year the CEO assumed office, and CEO ownership is measured as the proportion of shares owned by the CEO. The findings reveal that CEO tenure has a positive and significant effect on earnings management, supporting Upper Echelons Theory which suggests that longer tenure enables CEOs to better understand and control company operations, potentially leading to increased earnings management practices. Conversely, CEO narcissism and CEO ownership demonstrate no significant effect on earnings management. The lack of significance for CEO narcissism may be attributed to standardized corporate communication policies rather than genuine personality traits, while minimal CEO ownership in the sample limits the variable's explanatory power. This research contributes to the earnings management literature from an upper echelons perspective and offers practical implications for investors and regulators evaluating corporate governance in pressured industrial sectors.
References
[1] ACFE, “Key findings survei fraud Indonesia 2025,” 2025. [Online]. Available: https://acfe-indonesia.or.id/survei-fraud-indonesia/
[2] T. Murdijaningsih, S. K. Octisari, I. Rokhayati, G. A. Nugraha, and A. Budiastuti, “The Impact Of Information Asymmetry, Profitability, And Managerial Ownership On Earning Management,” PARAMETER, vol. 8, no. 2, pp. 189–198, Sep. 2023, doi: 10.37751/PARAMETER.V8I2.249.
[3] A. R. Respati and S. R. D. Setiawan, “Badai PHK di Industri Tekstil dan Produk Tekstil Masih Mengintai,” Kompas. Accessed: Sep. 06, 2007. [Online]. Available: https://money.kompas.com/read/2025/05/07/130359326/badai-phk-di-industri-tekstil-dan-produk-tekstil-masih-mengintai?page=all
[4] S. Siregar, “Imbas Lesu Order, 28 Perusahaan Garmen-Tekstil Pangkas Hari Kerja,” Mistar. Accessed: Sep. 06, 2007. [Online]. Available: https://mistar.id/news/ekonomi/imbas-lesu-order-28-perusahaan-garmen-tekstil-pangkas-hari-kerja
[5] Alpha Investasi, “17 Daftar Saham Tekstil Yang Terdaftar Di Bursa Efek Indonesia,” Alpha Investasi.
[6] N. Lukita, K. S. Danuta, and S. K. Octisari, “Ukuran Perusahaan sebagai Pemoderasi Faktor- Faktor yang Mempengaruhi Financial Distress pada Perusahaan Entertainment Korea Selatan,” vol. 13, no. 1, 2024.
[7] KBA News, “Manajemen Laba: Solusi Sementara atau Jerat Kebangkrutan?,” KBA News. Accessed: Sep. 06, 2007. [Online]. Available: https://kbanews.com/resonansi/manajemen-laba-solusi-sementara-atau-jerat-kebangkrutan/
[8] M. C. Jensen and W. H. Meckling, “Agency Costs and the Theory of the Firm,” J. financ. econ., no. 3, pp. 305–360, 1976, doi: 10.1111/j.1540-6288.1986.tb00759.x.
[9] D. C. Hambrick and P. A. Mason, “Upper Echelons : The organization as a reflection of its top managers,” Up. Echelons Organ. as a Reflect. 1st Top Manag., vol. 9, no. 2, pp. 193–206, 1984.
[10] J. Dewey, “Manajemen Laba dalam Akuntansi,” EBSCO. Accessed: Aug. 02, 2007. [Online]. Available: https://www.ebsco.com/research-starters/business-and-management/earnings-management-accounting-0#:~:text=“Earnings management” describes accounting strategies,prosperous and healthy as possible.
[11] A. Chatterjee and D. C. Hambrick, “It’s all about me: Narcissistic chief executive officers and their effects on company strategy and performance,” Adm. Sci. Q., vol. 52, no. 3, pp. 351–386, 2007, doi: 10.2189/asqu.52.3.351.
[12] M. D. A. Dennis and R. Suhendah, “Karakteristik CEO dan Manajemen Laba,” J. Akuntansi, Keuangan, dan Manaj., vol. 6, no. 1, pp. 151–161, 2024, doi: 10.35912/jakman.v6i1.3566.
[13] S. Y. Qawasmeh and M. J. Azzam, “CEO characteristics and earnings management,” vol. 6, no. 2020, pp. 1403–1410, 2020, doi: 10.5267/j.ac.2020.8.009.
[14] S. Chen, D. Tzavara, M. Argyropoulou, D. Koufopoulos, and R. Argyropoulou, “CEO Characteristics and Earnings Management: A Study of Manager Tenure, Age, Gender, and Overconfidence,” Stud. Bus. Econ., vol. 19, no. 3, pp. 335–347, 2024, doi: 10.2478/sbe-2024-0059.
[15] Herlina and Mardianto, “Analisis Pengaruh Karakteristik Ceo Terhadap Manajemen Laba Pada Perusahaan Non Keuangan Yang Terdaftar Di Bursa Efek Indonesia,” Financ. J. Akunt., vol. 8, no. 2, pp. 156–169, 2022, [Online]. Available: https://financial.ac.id/index.php/financial
[16] Sugiyono, Metode penelitian kuantitatif, kualitatif, R&D, vol. 5, no. 1. Bandung: Alfabeta, 2019.
[17] H. S. Sulistiyanto, Manajemen Laba: Teori dan Model Empiris, Cetakan II. Jakarta: PT Grasindo, 2008.
[18] J. Jones, “Earnings management during import relief investigation,” J. Account. Reasearch, pp. 193–228, 1991.
[19] P. M. Dechow, R. G. Sloan, and A. P. Sweeney, “Detecting Earnings Management,” Account. Rev., vol. 70, no. 2, pp. 193–225, 1995.
[20] R. Fiqriansyah, M. M. Sari, I. Amandayu, W. Orchidia, and K. Br, “Manajemen Laba dengan Pendekatan Model Jones,” vol. 3, no. 01, pp. 39–46, 2024, doi: https://doi.org/10.58812/jakws.v3i01.910.
[21] D. Bouaziz, B. Salhi, and A. Jarboui, “CEO characteristics and earnings management: empirical evidence from France,” J. Financ. Report. Account., vol. 18, no. 1, pp. 77–110, Jan. 2020, doi: 10.1108/JFRA-01-2019-0008.
[22] Sumardi and E. Wati, “Pengaruh Karakteristik Ceo Dan Hubungan Politik Terhadap Manajemen Laba Riil,” J. Ilm. Akunt. dan Keuang., vol. 4, no. 3, pp. 1288–1303, 2022.
[23] A. T. Basuki and N. Prawoto, Analisis Regresi Dalam Penelitian Ekonomi & Bisnis. Rajawali Pers, 2017.
[24] A. Utami and Rina Trisnawati, “Pengaruh Karakteristik CEO Terhadap Earnings Management,” El-Mal J. Kaji. Ekon. Bisnis Islam, vol. 6, no. 2, pp. 935–954, 2025, doi: 10.47467/elmal.v6i2.7191.
[25] D. S. Budhyarto and Hasnawati, “Pengaruh Gender Diversity, Board Ethnicity, Board Education, Dan Tenure Terhadap Manajemen Laba,” J. Ekon. Trisakti, vol. 3, no. 1, pp. 341–354, 2023, doi: 10.25105/jet.v3i1.15750.
[26] E. Ilahiyah, D. Ratnasari Yahya, and D. Widyawati, “Effects of Chief Executive Officer’s Narsismic Characteristics on Earnings Management Practices in Indonesia,” Glob. Sci. Acad. Res. J. Econ. Bus. Manag., vol. 5645, pp. 41–46, 2024, [Online]. Available: https://gsarpublishers.com/journals-gsarjebm-home/
[27] I. Ivone, V. Vivin, and R. Karina, “Pengaruh Karakteristik Chief Executive Officer Terhadap Real Earnings Management Dengan Koneksi Politik Sebagai Moderasi,” Gorontalo Account. J., vol. 7, no. 1, p. 46, 2024, doi: 10.32662/gaj.v7i1.3249.
[28] N. S. Anggraeni and R. Dewi, “Pengaruh Profile Ceo Dan Profitabilitas Terhadap Manajemen Laba,” Value, vol. 4, no. 1, pp. 128–147, 2023, doi: 10.36490/value.v4i1.735.
[29] M. Kontesa, R. Brahmana, and A. H. H. Tong, “Narcissistic CEOs and their earnings management,” J. Manag. Gov., vol. 25, no. 1, pp. 223–249, 2021, doi: 10.1007/s10997-020-09506-0.
[30] A. Wijanarko, A. N. Cahyono, M. Susilawati, F. Santoso, and M. Pardede, “The Influence of CEO Tenure on Earnings Management,” Innov. J. Soc. Sci. Res., vol. 4, no. 3, pp. 494–503, 2024, doi: 10.31004/innovative.v4i3.10479.
[31] M. Boudiab and M. Belhimer, “The impact of CEO attributes on real earnings management in Saudi Arabia,” Corp. Gov., vol. 10, no. 01, pp. 450–459, Oct. 2025, doi: 10.1108/CG-04-2015-0041.
[32] L. E. Putri and Y. Darmayanti, “PENGARUH USIA, PENDIDIKAN, ETNIS, TENURE DAN BOARD OWNERSHIP TERHADAP MANAJEMEN LABA PADA PERUSAHAAN MANUFAKTUR DI BURSA EFEK INDONESIA 2014-2018,” J. Kaji. Akunt. dan Audit., vol. 16, no. 2, pp. 107–121, Nov. 2021, doi: 10.37301/jkaa.v16i2.47.
[33] Mardianto and J. Vanessa, “Analisis Pengaruh Kepemilikan Asing dalam Memoderasi Karakteristik CEO terhadap Kualitas Pelaporan Keuangan,” vol. 12, no. 2, pp. 97–108, 2024.
