The Effect Of Return On Assets, Tax Planning, And Leverage On Profit Management Based On Sharia Accounting Principles

Abstract

This study aims to examine the effects of return on assets, tax planning, and leverage on earnings management from a Sharia accounting perspective. The study employs a quantitative approach using secondary data in the form of annual reports of manufacturing companies listed on the ISSI for the 2021–2024 period. A total of 23 companies were selected as samples through purposive sampling, and the data were analyzed using EViews 12. The results show that ROA and leverage have a positive and significant effect on earnings management practices, while tax planning does not have a significant effect. Simultaneously, these three variables have a significant effect on earnings management, confirming that a company's financial condition can encourage management to manipulate reported earnings. From a Sharia accounting perspective, manipulative actions in financial statements, even if still within accounting standards, are considered unethical when conducted to benefit one party at the expense of another.