THE ROLE OF MANAGERIAL OWNERSHIP, LEVERAGE, AND COMPANY SIZE IN EARNINGS MANAGEMENT PRACTICES

Abstract

Earnings management is a practice carried out by management to influence accounting information for specific purposes, which often affects the transparency and reliability of financial statements. Numerous studies have examined various factors that influence earnings management, including managerial ownership, leverage, and firm size. This article aims to review the literature that discusses how these three variables affect earnings management. The method used is a literature review based on relevant national and international journal articles published between 2020 and 2025. The findings show that the influence of managerial ownership, leverage, and firm size on earnings management remains inconsistent. Managerial ownership may suppress earnings management in certain contexts but appears insignificant in others. Leverage is often associated with debt pressure that encourages earnings management, while the impact of firm size varies across studies. This review provides a comprehensive understanding of the dynamics of earnings management and offers theoretical and practical implications for future research and decision-making.