In
the
last
several
years,
the
GCG
concept
is
becoming
more
popular.
The
concept
is
believed
to
be
the
foundation
for
a
company
to
grow
and
succeed
in
the
global business competition. The popularity of
GCG was triggered by outrageous events,
such
as
Enron,
WorldCom,
and
many
more.
Moreover,
Asia
experienced a
substantial
financial crisis during 1998
which both events was
allegedly occurred due to
the
failure
of
implementing the Good Corporate Governance concept (Daniri, 2005). In accordance
with
the
allegation,
Booz-Allen survey
which
was
conducted
on
1998
showed
that
Indonesia
ranked
the
lowest
with
the
score
of
2.88
in
the
corporate
governance index.
According
to Moeljono (2005),
the ability of a country
to recover
from a financial crisis
depends
on
each
corporate
in
its
country.
Consequently, Indonesian
companies
should
start
to build
GCG
awareness in
order
to excel
in
the
business
environment,
especially
globally.
The past researches had examined the relationship between corporate
governance
with earnings management in
which the total discretionary accruals used as the proxy for
earnings
management. The
author
is
interested
in
examining
the
capability of
corporate
governance variables on
reducing the
earnings
management
in
Indonesian
non-financial
companies.
1.2. Problem Statement
The
problem statement
that
the
author
tries
to
examine
is
how
the
corporate
governance
variables
affecting
the
opportunistic earnings
management
in
which
the
abnormal working capital accruals
is
used as the proxy. The author
is
trying
to
identify
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