INTERNATIONAL JOURNAL OF RESEARCH IN BUSINESS AND SOCIAL SCIENCE 11(1)(2022) 138-151 * Corresponding author. ORCID ID: 0000-0002-0552-0932 © 2022 by the authors. Hosting by SSBFNET. Peer review under responsibility of Center for Strategic Studies in Business and Finance. https://doi.org/10.20525/ijrbs.v11i1.1541 Citation: Mismiwati, M., Haryadi, H., Arum, E. D. P., & Lubis, T. A. (2022). The role of profit management in mediation of financial performance and transparency towards profit distribution management in sharia commercial banks . International Journal of Research in Business and Social Science (2147- 4478), 11(1). The role of profit management in mediation of financial performance and transparency towards profit distribution management in sharia commercial banks Mismiwati (a)* Haryadi (b) Enggar Diah Puspa Arum (c) Tona Aurora Lubis (d) (a) Doctoral Program in Economics, Faculty of Economics and Business, Universitas Jambi, Indonesia (b,c,d) Faculty of Economics and Business, Universitas Jambi, Indonesia A R T I C L E I N F O Article history: Received 23 December 2021 Received in rev. form 02 Feb. 2022 Accepted 06 February 2021 Keywords: Earnings Management, Financial Performance, Transparency, Profit Distribution Management JEL Classification: O15 A B S T R A C T This study aims to examine the effect of financial performance and transparency on profit distribution management with earnings management as a mediating variable in Islamic commercial banks in Indonesia. The population in this study were all Islamic Commercial Banks for 2014 - 2019, with as many as 14 Islamic commercial banks. Determination of the sample using the criteria to obtain 10 Islamic Commercial Banks. The data used is secondary data, in the form of financial statements of Islamic Commercial Banks, with data collection techniques in documentation. The analytical method used is the Structural Equation Model – Partial Least Square (SEM-PLS) method. The study results indicate that Financial Performance, Transparency affects Earnings Management Financial performance affects Profit Distribution Management, while transparency does not affect Profit Distribution Management. Profit management can mediate financial performance and transparency of Profit Distribution Management. © 2022 by the authors. Licensee SSBFNET, Istanbul, Turkey. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/). Introduction Banking institutions have a significant position in supporting a country's economy. As part of the economic structure, banking institutions play an essential role in maintaining macroeconomic stability and balance, including fluctuations in aggregate demand, such as too much or too little money in circulation. This means that banking institutions can act as an instrument to create stability and balance macroeconomic conditions. The growth of the financial sector, especially the change in the composition or structure of the banking sector in Indonesia, is expected to bring positive changes to the national economy. For example, when there is a decrease in the amount of credit disbursed due to the conservative attitude of the bank, it will indirectly cause a slowdown in economic growth in the country concerned. Indonesia, predominantly Muslim, makes this country the world's largest market for Islamic banking. The sizeable Muslim population provides a comprehensive enough space for developing Islamic banks in Indonesia. The first Islamic bank in Indonesia was born in 1991 and officially operated in 1992. After being proven to survive the 1998 crisis, the government issued Law No. 10 of 1998, which allowed banks to conduct sharia transactions (dual banking system). Since then, many Islamic banks have sprung up in Indonesia. Research in Business & Social Science IJRBS VOL 11 NO 1 (2022) ISSN: 2147-4478 Available online at www.ssbfnet.com Journal homepage: https://www.ssbfnet.com/ojs/index.php/ijrbs