ABSTRACT

The objective of this study is examine the influence of corporate governance mechanism and firm size to earnings management. Corporate governance mechanism, namely managerial ownership, istitutional ownership, presence of independent of director, size of director and size of audit committee. this study also examines the influence of earnings management to financial performances. This research used samples from 40 companies listed on Indonesia Stock Exchange, by using purposive sampling which was published financial report among 2008-2010. The method of analysis of this research used multi regression and single regression. The results of this research show that (1) simultaneously of managerial ownership, istitutional ownership, presence of independent of director, audit committee and firms size had significant influence to earning managements, (2) managerial ownership, institutional ownership and size of audit committee had not significant influences to earnings management, (3) presence of independent of director had negative significant influences to earnings management, (4) size of director and firm size had positive significant insfluence to earnings management, 95) earnings management had negative significant influence to financial performance.

Key words : managerial ownership, institusional ownership, presence of independent of director, size of director, audit committee, firms size, earnings management, financial performance.