Moderated Mediation in Earnings Management and Firm Value: Examining the Roles of CSR Disclosure and Accounting Conservatism

This study examines the relationship between earnings management and firm value, emphasizing the mediating role of corporate social responsibility (CSR) disclosure and the moderating effect of accounting conservatism. Using a sample of 731 non-financial companies listed on the Indonesia Stock Exchange from 2016 to 2023, with 5,848 firm-year observations, the research employs panel regression and conditional process modelling to test moderated mediation effects. The findings reveal that earnings management negatively impacts firm value, as profit manipulation erodes investor confidence and diminishes the reliability of financial statements. CSR disclosure fully mediates this relationship by mitigating the adverse effects of earnings management, signalling the firm’s commitment to social responsibility, and enhancing stakeholder trust. Furthermore, accounting conservatism moderates these relationships by weakening the negative association between earnings management and firm value while strengthening the positive effect of CSR disclosure on firm value. These results highlight the strategic importance of combining CSR disclosure and conservative accounting practices as governance mechanisms to bolster investor confidence and stabilize firm value.