THE EFFECT OF INCOME SMOOTHING, TAX RISK, AND DIGITALIZATION ON FIRM VALUE IN THE BANKING SECTOR BASED ON IDX (2022-2024)

Abstract

The purpose of this study is to ascertain how digitization, tax risk, and income smoothing affect company value in Indonesian banks. This is a quantitative study conducted with secondary data. Firm value is the dependent variable in this study, while business size is the control variable and income smoothing, tax risk, and digitalization are the independent variables. The population in this study is banks in Indonesia listed on the IDX. The sample in this study consists of 45 samples from 15 banks in Indonesia over a 3-year period. The sampling technique used is purposive sampling. This study employs a pooled least squares data analysis method. The results of this study indicate that income smoothing has a significant positive effect on firm value, tax risk has a significant negative effect on firm value, and digitalization has a positive but insignificant effect on firm value. These findings reinforce the role of signaling theory in explaining how financial and non-financial information is responded to by investors and enrich the literature on firm value in the context of the banking industry and the post pandemic era.