The Role of Human Capital as Mediating Relationship between Audit Committee Effectiveness and Real Earnings Management
Sri Layla Wahyu Istanti, Anis Chariri, and Agung Juliarto

Diponegoro University

Abstract

This paper aims to examine the impact of the effectiveness of the audit committee which consists of two elements, namely the number of audit committee meetings and independent audit committees on real earnings management with human capital as a mediating variable. This research is a quantitative study using data from manufacturing companies listed on the Indonesia Stock Exchange in 2018-2020. The data were tested using path analysis. The results showed that the number of audit committee meetings had a significant effect on human capital, but the independent audit committee had no effect on human capital. This study also found that only the number of audit committee meetings had a significant effect on real earnings management, while the independent audit committee and human capital had no effect on real earnings management. Furthermore, there is empirical evidence showing that human capital has a mediating effect on the number of audit committee meetings and independent audit committees with real earnings management. The main contribution to the originality of this research is the role of human capital as a mediation in the relationship between the effectiveness of the audit committee and real earnings management.

Keywords: number of audit committee meetings, independent audit committee, human capital, real earnings management

Topic: Accounting