Tax avoidance, leverage, audit quality, and earnings management: the moderating role of firm size in mining companies listed on the indonesia stock exchange 2020-2024

Abstract

Background: Earnings are a central component of financial statements, yet managerial discretion may create opportunities for earnings management. Evidence on tax avoidance, leverage, audit quality, and earnings management remains mixed, especially in capital-intensive industries mining companies. Aims: This study examines their associations and tests whether firm size moderates these relationships in Indonesian mining companies. Methods: Using 70 firm-year observations from 14 Indonesia Stock Exchange (IDX)-listed mining companies during 2020-2024. Result: ETR is negatively associated with discretionary accruals (β=-0.115674, p=0.0442). Because lower ETR indicates greater tax avoidance, the ETR-based result implies that greater tax avoidance is associated with higher earnings management. Leverage and the Big Four audit-quality proxy are not statistically significant. Firm size is positively associated with earnings management in the direct-effects model (β=0.140549, p=0.0203), but no interaction term is significant. Conclusion: The study contributes context-specific mining-sector panel evidence by separating firm size's direct and moderating roles and by clarifying ETR direction. Findings are observational and limited by the purposive sample, proxy choices, and unverified robustness extensions.