The Influence of IFRS Convergence, Good Corporate Governance Mechanism, and Firm Size on The Quality of Financial Reporting (Empirical Study on Public Company Listed on IDX 2010-2013)
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Institusion
Universitas Jenderal Soedirman
Author
DEWI, Yusma
Subject
C865 Corporations Finance
Datestamp
2019-12-06 02:19:34
Abstract :
The provision of financial statement shall be made by the company with the purpose to obtain an overview of the company?s performance which is useful for investors, creditors, and owners in making economic decision. Based on its objectives, the infomation in financial statement generated through high quality of financial reporting should be able to meet the needs of users in accordance with the policies, standards, and procedures in providing financial statement. However, there are still a lot of phenomena in which the companies report their financial information are not in accordance with the existing procedure. It can cause a declining in financial reporting quality of the companies. Based on the previous research, there are empirical evidences that support the improvement of financial reporting quality by considering several factors such as the implementation of IFRS convergence, good corporate governance mechanism, and firm size. This research aims to identify and analyze the influence of IFRS convergence, good corporate governance mechanism, and firm size on the quality of financial reporting with profitability and leverage as control variables. The mechanism of good corporate governance in this research is proxied into institutional ownership, managerial ownership, foreign ownership, and composition of board of commissioners. The type of this research is empirical study with quantitative approach. The population in this research is public companies listed on Indonesia Stock Exchange (IDX) period 2010-2013. This research takes a sample of 62 public companies by using purposive sampling method. The data is analyzed by using Multiple Regression Analysis. The result of this research proves that the implementation of IFRS convergence, firm size, and proftability has significant effect on improving the quality of financial reporting. Meanwhile, leverage and four proxy of good corporate governance mechanism which are institutional ownership, managerial ownership, foreign ownership, and composition of board of commissioners proves has no significant effect on improving the quality of financial reporting.
The provision of financial statement shall be made by the company with the purpose to obtain an overview of the company?s performance which is useful for investors, creditors, and owners in making economic decision. Based on its objectives, the infomation in financial statement generated through high quality of financial reporting should be able to meet the needs of users in accordance with the policies, standards, and procedures in providing financial statement. However, there are still a lot of phenomena in which the companies report their financial information are not in accordance with the existing procedure. It can cause a declining in financial reporting quality of the companies. Based on the previous research, there are empirical evidences that support the improvement of financial reporting quality by considering several factors such as the implementation of IFRS convergence, good corporate governance mechanism, and firm size. This research aims to identify and analyze the influence of IFRS convergence, good corporate governance mechanism, and firm size on the quality of financial reporting with profitability and leverage as control variables. The mechanism of good corporate governance in this research is proxied into institutional ownership, managerial ownership, foreign ownership, and composition of board of commissioners. The type of this research is empirical study with quantitative approach. The population in this research is public companies listed on Indonesia Stock Exchange (IDX) period 2010-2013. This research takes a sample of 62 public companies by using purposive sampling method. The data is analyzed by using Multiple Regression Analysis. The result of this research proves that the implementation of IFRS convergence, firm size, and proftability has significant effect on improving the quality of financial reporting. Meanwhile, leverage and four proxy of good corporate governance mechanism which are institutional ownership, managerial ownership, foreign ownership, and composition of board of commissioners proves has no significant effect on improving the quality of financial reporting.
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