Bid-Ask Spread on Earnings Management with Good Corporate Governance as Moderation Variables: Banking Sector in Indonesia IMAM GHOZALI, SUGENG WAHYUDI, HERSUGONDO Department Management, Faculty of Economics and Business, Diponegoro University, INDONESIA ANTON SATRIA PRABUWONO Faculty of Computing and Information Technology, King Abdul Aziz University, Saudi Arabia IMANG DAPIT PAMUNGKAS Department of Accounting, Faculty of Economics and Business, Dian Nuswantoro University, INDONESIA Abstract: - This study aims to determine the effect of the bid-ask spread on earnings management and good corporate governance (GCG) as moderating variables. The research method used is a quantitatively descriptive research method that aims to examine the effect of bid-ask spread on the earning management moderated by GCG. The population in this study are banking companies listed on the Indonesia Stock Exchange (IDX). In this study, found that the sample was obtained using purposive sampling. So, the model in this study with 102 total samples. The analysis tool used is Warp-PLS 6.0. This study shows that the bid-ask spread significantly influences on earnings management of banking companies on the IDX in the years 2014-2020. GCG cannot the effects of bid-ask spreads on the earnings management of banking companies on the IDX in the years 2014- 2020. Key-Words: - Bid-Ask Spread, Earnings Management, Good Corporate Governance Received: June 17, 2021. Revised: December 21, 2021. Accepted: January 16, 2022. Published: January 18, 2022. 1 Introduction Financial statements are an essential tool and source of information used by outside parties to assess the company's performance. The information provided must be relevant and reliable to describe the actual financial position of a company. Earning is one of the primary goals of starting a business. This is the main factor that leads managers to take many avenues, such as earning management, to increase their company's bottom line [1]. Management always tries to perform well. The goal is also to produce good financial reports. If management fails to do this, it usually changes the financial statements by increasing or decreasing profits, known as earning management [2]. In financial accounting, earning management is still controversial. According to [3], earning management is a deviation due to profit figures in the annual financial statements. Earning management arises from agency problems, namely from the conflicts of interest between owners and management. Earning management measures are based on two behaviour of managers, namely opportunistic behaviour and efficient contract drafting. Both can affect the results reported in the annual financial statements, which can mislead users of annual financial statements in making economic decisions. The part of financial statements that shareholders often use to make investment decisions is income information. Because profit is an indicator that is widely used to measure the success of the company's operational performance, by agency theory, earnings management practices are reflected in the opportunistic behavior of management. [4]. Agency theory explains that managers can act opportunistically when the company performs poorly by increasing book profit to hide poor performance. Conversely, managers can work opportunistically by lowering their book profit to delay exemplary implementation [5]. There have been many cases of revenue management in several banking companies, particularly PT Bank Mandiri Syariah (BSM.) in 2018. The subsidiary of PT Bank Mandiri Tbk has launched a fictional action worth Rs.1.1 trillion. The Indonesian Anti-Corruption Society (MAKI) assesses whether the money disbursed is not used by submitting a financing proposal from the debtor so that it is called fictitious. In addition, the question of the disbursement of financing is used in self- interest. Gave the allegedly fictional funding to WSEAS TRANSACTIONS on BUSINESS and ECONOMICS DOI: 10.37394/23207.2022.19.34 Imam Ghozali, Sugeng Wahyudi, Hersugondo, Anton Satria Prabuwono, Imang Dapit Pamungkas E-ISSN: 2224-2899 386 Volume 19, 2022