The effects of profit volatility, income smoothing, good corporate governance and non-performing financing on profit quality of sharia commercial banks

Kurniasari, A.; Adam, M.; Hamdan, U.

Growing Science » Accounting » The effects of profit volatility, income smoothing, good corporate governance and non-performing financing on profit quality of sharia commercial banks

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Accounting

ISSN 2369-7407 (Online) - ISSN 2369-7393 (Print) Quarterly Publication Volume 9 Issue 1 pp. 9-16 , 2023

The effects of profit volatility, income smoothing, good corporate governance and non-performing financing on profit quality of sharia commercial banks Pages 9-16 Download PDF

Authors: Amy Kurniasari, Mohamad Adam, Umar Hamdan

DOI: 10.5267/j.ac.2022.9.003

Keywords: Income volatility, Income smoothing, Corporate governance, Troubled financing, Profit quality of sharia banks in Indonesia

Abstract: The purpose of this study was to analyse the effects of profit volatility (X1), income smoothing (X2), corporate governance (X3), and non-performing financing (X4) on profit quality (Y) of sharia banks in Indonesia. The samples of this study were 10 sharia commercial banks in the period of 2012-2018 with 66 panel data that had been tested for outliers and normality. This study used a purposive sampling method, and it used the classical assumption tests, namely multicollinearity, autocorrelation, heteroscedasticity, and normality tests. This study used panel data regression analysis. The results of the study showed that profit volatility was detrimental to profit quality as evidenced by a beta coefficient of 0.0929 and the significance level of 0.1100, income smoothing was detrimental to profit quality as evidenced by a beta coefficient of -0.015 and the significance level of 0.1009, corporate governance had a negative influence on profit quality as evidenced by a beta coefficient of 0.0468 and the significance level of 0.293, non-performing financing was detrimental to profit quality as evidenced by a beta coefficient of -0.0096 and the significance level of 0.9139. The predictive ability of the four variables on profit quality was 16.34% while the remaining 83.66% was influenced by other factors not included in the research model.

How to cite this paper

 Kurniasari, A., Adam, M & Hamdan, U. (2023). The effects of profit volatility, income smoothing, good corporate governance and non-performing financing on profit quality of sharia commercial banks.Accounting, 9(1), 9-16.

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