The Effect of Deferred Tax Assets and Deferred Tax Expense on Earnings Management in Banking Sub-Sector Service Companies and Financing Institutions

This purpose of this research is to know The effect of Deferred Tax Asset and Deferred Tax Expense on Earning Management in service companies sub sector banking and financial institution listed at Indonesia Stock Exchange period 2013-2017.This research used quantitative and the data source is from secondary data. . The object in this study is service companies sub sector banking and financial institution listed at Indonesia Stock Exchange period 2013-2017, with total of population of 61 companies. From this population, 10 companies are chosen by purposive sampling technique throughout 5 periods of time, specifically from 2013-2017 which sum up to 50 samples. This analysis includes of descriptive statisticstest and the assumptions of regression analysis, classical hypotesis, multiple regression analysis , testing the hypothesis through a test of, t-test, F-test and determination coefficients. The analysis result obtained regression analysis Earning Management = -0.006 + 0.044 Deferred Tax Asset – 11.761 Deferred Tax Expense + e. Result of research partially indicate that Deferred Tax Asset has effect significantly to Earning Management with a value of the tcount > ttable of 3.316 > 2.01537 and significant value < 0.05 with value 0.002 < 0.05. As the result, the first hypotheses is accepted. Result of research partially indicate that Deferred Tax Expense not effect significantly to Earning Management with a value of the tcount < ttable of -2.338 < 2.01537 and significant value < 0.05 with value 0.024 < 0.05. As the result, the second hypotheses is accepted. The result of simultaneously Deferred Tax Asset and Deferred Tax Expense take effect and significantly to Earning Management with a value of Fcount > Ftable  of  6.371 > 3.21 and significant value  < 0.05 with value 0.004 < 0.05. As the result, the third hypotheses is accepted. This study hyphothesis results was supported by R Square value 22.9% which is indicates that the variable Earning Management can be explained by the variables of Deferred Tax Asset and Deferred Tax Expense, while the remaining 77.1% of Earning Management  variable can be explained by other variables for example Tax Planning, Debt Rate and others which are not used in this study.