This study aims to examine the effect of leverage, company size and
corporate governance practices against earnings management in LQ-45 index. The
method used in sampling is purposive sampling method with the criterion that at
least two times the company listed in the LQ-45 index, have issued financial
statements continuously from 2005 until the year 2008 by entering the year 2005
as the base, all have data on managerial ownership, institutional ownership, audit
committee (corporate governance), leverage and firm size. The analytical method
used is multiple linear regression test with significance level (α) 0.05.
The research concluded that partially leverage, firm size, audit committee
and institutional ownership has no significant impact of earnings management, but
managerial ownership is partially significant effect on earnings management.
Simultaneously leverage, firm size, audit committee, managerial ownership and
institutional ownership has no effect on earnings management.