The Influence Of Ethical Leadership on the Quality of Earnings Management in Multinational Corporations

Abstract

The This study aims to analyze the influence of ethical leadership on the quality of earnings management in multinational corporations. The research method employed is a qualitative approach through a literature review, examining recent studies related to ethical leadership, earnings management, and corporate governance. The findings indicate that ethical leadership has a positive impact on reducing earnings manipulation by creating an environment that fosters transparency, integrity, and accountability in financial reporting. Ethical leadership also plays a key role in shaping corporate culture and governance, which in turn improves the quality of financial reporting and reduces earnings management. Additionally, the study found that corporate social responsibility (CSR) initiatives driven by ethical leaders can enhance financial transparency, while cross-cultural challenges in multinational corporations require ethical leadership capable of aligning global ethical standards with local cultures. Overall, this research underscores the critical role of ethical leadership in strengthening corporate governance and improving earnings management quality, especially in multinational corporations operating in diverse regulatory environments. The findings contribute to the theory of leadership, corporate governance, and financial reporting practices.