EARNINGS MANAGEMENT AND REPORTING QUALITY IN MINING FIRMS: THE ROLE OF DEBT AND GOVERNANCE DURING COVID-19

Abstract

This study examines the impact of debt financing and corporate governance on earnings management in Indonesian mining firms listed on the IDX between 2015 and 2024, with particular attention to the COVID-19 period. Using a balanced panel of 500 firm-year observations, we estimate fixed-effects regressions (with random-effects as robustness) to assess discretionary accruals based on the Modified Jones Model. The results show that higher leverage is associated with significantly lower earnings management, while individual governance mechanisms (audit committee activity and institutional ownership) have limited direct effects. However, debt combined with active audit committees strengthens reporting discipline, and the COVID-19 shock further amplifies these relationships. These findings extend capital structure and governance theories to the mining sector in emerging markets and suggest that stronger audit committee disclosure and lender monitoring can serve as effective transparency levers during crises.