Abstract
The main purpose of the company’s operation today is to maximize the value of the company. Corporate value is not only influenced by economic performance, but can come from performance derived from social activities. But in reality, it eventually leads to a conflict of interest that occurs within the company, so that necessary to implement mechanisms to reduce the conflict. The purpose of this research to provide evidence to determine effect of intellectual capital, corporate sustainability disclosure, and corporate governance to corporate values with company size and leverage as control variables. This research can provide benefits as knowledge related to how wide the company pursues intellectual capital, corporate social responsibility, and corporate governance in increasing the value of the company. This research samples is focused on state owned enterprises listed in Indonesia Stock Exchange for period 2013 – 2016 with total 48 data used in this research. This research use multiple regression to test the hypothesis. The result of this research is intellectual capital and corporate sustainability disclosure have positively influence towards corporate values. Corporate governance has no influence towards corporate values. For control variables, company size has no influence towards corporate values and leverage has negatively influence towards corporate values.
Highlights
A recent 2-year report issued by Association of Certified Fraud Examiners (ACFE), one of the largest anti-fraud organization based in the United States, stated that there are more than 2,400 scandals have been reported during January 2014 – October 2015 period in 114 countries
The purpose of this research is to analyze the effect of audit committee policy introduced in 2012 and other good corporate governance (GCG) determinants such as independent commissioner, ownership concentration, credit rating, and audit quality on earnings management for listed companies in Indonesia Stock Exchange
This research aims to measure the effect of audit committee policy along with several GCG determinants on earnings management
Summary
A recent 2-year report issued by Association of Certified Fraud Examiners (ACFE), one of the largest anti-fraud organization based in the United States, stated that there are more than 2,400 scandals have been reported during January 2014 – October 2015 period in 114 countries. Total reported loss would reach more than US$6,3 billion, roughly IDR85 trillion using IDR13,500/US$1 exchange rate (ACFE, 2016). Thanks to these financial scandals, earnings management has notoriously gained popularity. Earnings management has been practiced by senior management of corporation to manipulate the financials, affecting its net profit/loss. According to Dechow et al (1995), one of the most occurred earnings management practices would be the abuse of discretionary accruals, which could be revenue or expense type of accrual booked by management within flexibility in accounting regulations. Several well-known global corporations such as Enron, WorldCom, and Tyco as well as the Asian counterparties like Toshiba and Kimia Farma have experienced serious financial difficulties caused by this type of earnings management
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