The Role of Profit Management as an Intervening Variable in Mediating the Effect of Credit Risk on Financial Distress
(Pages 1240-1246)Abdul Haris1, Imam Ghozali2 and Najmudin3,*
1,3Faculty of Economics and Business, Universitas of Jenderal Soedirman, Indonesia;
1Faculty of Economics and Business, Universitas of Gunung Jati Swadaya, Indonesia;
2Faculty of Economics and Business, Universitas of Diponegoro, Indonesia;
DOI: https://doi.org/10.55365/1923.x2023.21.137
Abstract:
The purpose of this paper is to build a predictive model of financial distress in the banking sector with accrual-based earnings management as an intervening variable in mediating the effect of credit risk on financial distress. The sampling method used in determining the sample is 'purposive sampling'. The number of sample selected in this paper was 36 conventional commercial banks which experienced a decrease in profits during the 2016-2020 period with a total of 180 observations. To analyze the data, the panel data regression method was applyied. The result shows that ROA and LDR have an effect positively on financial distress. Likewise, credit risk as the main factor has an effect negatively on financial distress, and credit has an effect positively on on earnings management.
Keywords:
Earnings Management, Financial Distress.
JEL Classification:
E51, M10, M41, M48.
How to Cite:
Abdul Haris, Imam Ghozali and Najmudin. The Role of Profit Management as an Intervening Variable in Mediating the Effect of Credit Risk on Financial Distress. [ref]: vol.21.2023. available at: https://refpress.org/ref-vol21-a137/
Licensee REF Press This is an open access article licensed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0/) which permits unrestricted, non-commercial use, distribution and reproduction in any medium, provided the work is properly cited.