Pembimbing : Wiwik Pratiwi

Abstrak:
This study aims to empirically examine whether profitability, cash holding, and bonus plan affect the practice of income smoothing listed in Indonesia Stock Exchange in 2015-2019 period.

The research uses secondary data. Sample used in this research are companies listed in the Indonesia Stock Exchange (IDX) LQ45 index in 2015-2019 period by using purposive sampling method. There are 25 companies that fulfill the criteria as research sample. This research used quantitative methods. Research variables being used are profitability, cash holding, and bonus plan. The hypothesis test used is logistic regression analysis with binary logit method and using application program Eviews 10.

The result from this research showed that the variables profitability which is proxied by ROA partially has a significant effect on the practice of income smoothing with a negative coefficient and variable cash holding partially has a significant effect on the practice of income smoothing with a positive coefficient. While variable bonus plan partially does not have a significant effect on the practice of income smoothing, simultaneously, the results of this research showed that the variables profitability, cash holding, and bonus plan have a significant effect on the practice of income smoothing.

Keywords: Return on Asset, Cash Holding, Bonus Plan, and Income Smoothing