Determinants of income smoothing and the moderating role of managerial ownership

Nafiria, Arneta Dela and Kholilah, Kholilah ORCID: https://orcid.org/0000-0003-1828-9642 (2026) Determinants of income smoothing and the moderating role of managerial ownership. JPAK: Jurnal Pendidikan Akuntansi dan Keuangan, 14 (1). pp. 90-109. ISSN 2656-3266

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Abstract

This study examines the effects of profitability, leverage, firm age, company size, and stock price on income smoothing practices, with managerial ownership serving as a moderating variable. The research focuses on companies in the financial sector listed on the Indonesia Stock Exchange during the 2020–2024 period. The sample comprises 22 firms observed over five years, yielding 110 observations. Data were analysed using logistic regression and moderated regression analysis. The results indicate that company size has a significant negative effect on income smoothing, suggesting that larger firms are less likely to engage in income smoothing due to stronger external monitoring. Meanwhile, profitability, leverage, firm age, and stock price do not show a significant effect on income smoothing. Managerial ownership strengthens the relationship between firm age and income smoothing, while weakening the influence of profitability, leverage, and stock price. However, managerial ownership does not moderate the effect of company size on income smoothing. These findings suggest that managerial ownership can reduce opportunistic income smoothing behaviour. Nevertheless, in more mature firms, managerial ownership may encourage management to maintain stable earnings in order to preserve investor confidence.

Item Type:	Journal Article
Keywords:	profitability; leverage, company size; managerial ownership; income smoothing
Subjects:	15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1501 Accounting, Auditing and Accountability > 150103 Financial Accounting
Divisions:	Faculty of Economics > Department of Accounting
Depositing User:	Kholilah Kholilah
Date Deposited:	17 Jul 2026 16:00

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