Determinant of Income Smoothing : View of Indonesia Stock Exchange

ABSTRACT : This study aims to determine the impact of company size, cash holding, and return on assets on the implementation of income smoothing in food and beverage manufacturing companies listed on the Indonesian Securities Exchange throughout the period of 2017–2021. The research employed the purposive sampling method for sampling. The research sample consisted of 85 companies. This research uses logistic regression analysis as its analytical tool. The study classifies the practice of income smoothing using the Eckel index, assigning a value of 1 to organizations that engage in income smoothing and a value of 0 to companies that do not engage in income smoothing. The research findings indicate that the company size and its Return On Assets have no impact on the practice of income smoothing. However, cash holding does influence the practice of income smoothing.

KEYWORDS: Cash Holding, Company Size, Income Smoothing, Return on Assets