The Influence of Company Size, Free Cash Flow, Leverage on Profit Management with Profitability as a Moderating Variable for Basic Materials Companies Listed on the Indonesian Stock Exchange

Earnings management is a type of fraud that often occurs in Indonesia, where company management manipulates financial reports to disrupt the decisions of external parties who read financial reports. This research uses company size, leverage and free cash flow as independent variables, earnings management as an independent variable and profitability as a moderating variable. This research was conducted to determine the effect of company size, leverage and free cash flow on earnings management with profitability as a moderating variable. The population of this research is basic materials companies listed on the Indonesia Stock Exchange in the period 2020 to 2022. The research data collection technique used purposive sampling, so that 23 companies were obtained with a total of 69 data. Data analysis was carried out using multiple linear regression using SmartPLS4. Based on the research results, it was found that company size, leverage and free cash flow did not have a significant effect on earnings management, so profitability was not able to moderate the relationship between company size and free cash flow on earnings management and profitability could moderate leverage on earnings management. So profitability is not a moderating variable but an independent variable.