This study was aimed to analyze the effect of free cash flow and audit
committee towards earnings management. This study was performed using secondary
data. Data were collected from The Indonesian Capital Market Directory (ICMD)
and annual report. The population in this study is 63 firms which are listed at the
Jakarta Stock Exchange from 2006-2009. This study use Linear Regression
technique.
The result showed that earnings management was negatively affected by free
cash flow but was not significant affected by audit committee. It meant that bigger
free cash flow, the company tended to perform earnings management by minimize
earnings
