Abstract
This study examined the interaction effect of firm size on the impact of the independent board, independent audit committee, institutional ownership and voluntary disclosure. The study also explored the direct impact on the association between firm size, independent board, independent audit committee, institutional ownership and voluntary disclosure. Data collected from the annual report of banking companies listed on the Indonesia Stock Exchange throughout the year of an observational study. Hypotheses developed are tested with the partial least square – structural equation modelling (PLS-SEM) methodology, and the results subsequently interpreted. The results of the study revealed a positive and significant relationship between the independent board, independent audit committee, institutional ownership and firm size on voluntary disclosure in the Indonesia Stock Exchange listed banking companies. It also found that firm size, as a moderating variable, affects institutional ownership on voluntary disclosure. The existence of an independent audit committee aims at increasing the rate of voluntary disclosure in companies. Similarly, the impact of institutional ownership on voluntary disclosure has a consequence on management performance and commitment to enhance complete disclosure of information to the general public and users of financial statements for informed decision making in large companies.
Highlights
In the Asian continent, one of the causes of the crisis is the low-level implementation of corporate governance, and Indonesia as a country is not an exception
The minimum value of the proportion of independent audit committee members was 50%, while the maximum value was 100%. These findings indicate that all banking companies in Indonesia have met the requirements of the Financial Services Authority regulation, POJK no. 55/POJK.04 / 2015, which requires that members of the independent audit committee have a minimum of 30% of the total members of the audit committee
The first moderator test result shown that the path coefficient value is -0.103 and the t-statistics value is 1.305 (i.e., 1.305 < 1.96), which means that the firm size cannot moderate the influence of the proportion of independent board towards voluntary disclosure, which indicates the rejection of hypothesis H5 of the study
Summary
In the Asian continent, one of the causes of the crisis is the low-level implementation of corporate governance, and Indonesia as a country is not an exception. The audit committee monitors the implementation of information disclosure mechanisms to improve the quality of information flows between owners and managers (Rouf, 2011) Another factor expected to increase voluntary disclosure in an annual report is institutional ownership. Based on the preceding paragraphs, the implementation of the financial services authority regulations concerning directors and the independent board of public companies (Indonesia Financial Services Authority, POJK No 33/POJK.04/2014), and information and guidelines for the implementation of audit committee work (Indonesia Financial Services Authority, POJK No.55/POJK.04/2015), constitute an essential significant factor and motivation to conduct a more in-depth study about voluntary disclosure.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
