Abstract
This study aims to examine the effect of managerial ownership, auditors switching and intellectual capital on the integrity of financial statements with leverage and firm size as control variables. The study employed literature and observation study of the research object to obtain the research data. The research objects are manufacturing companies listed on IDX and MYX within the period of 2014-2017. Research data were analyzed using Eviews software with multiple linear regression analysis method. In this study the t statistical test is used to measure and assess the significance level of each independent variable (managerial ownership, auditor switching and intellectual capital) and control variables (firm size and leverage) on the dependent variable, namely the integrity of financial statements applied in Indonesia and Malaysia. The results showed that in the Indonesian manufacturing companies, managerial ownership, auditors switching and intellectual capital have a positive effect on the integrity of financial statements. Meanwhile, in the Malaysian manufacturing companies, from the three dependent variables used in the study, only managerial ownership has an effect on the integrity of financial statements. With regard to the control variables used, leverage and firm size are equally positive for the integrity of financial statements of companies just in Indonesia. This research is different from the previous study in that the objects of this study are manufacturing companies listed on the Indonesia Stock Exchange (IDX) and Bursa Malaysia (MYX) within the period of 2014-2017, which is a longer period of time. Further, the researchers add independent variables to managerial ownership, auditor switching, and intellectual capital
Highlights
Business management requires accountability so that suspicion does not emerge among business people involved
This research is different from the previous study in that the objects of this study are manufacturing companies listed on the Indonesia Stock Exchange (IDX) and Bursa Malaysia (MYX) within the period of 2014-2017, which is a longer period of time
The following are the results of descriptive statistical analysis that has been carried out on the sample of manufacturing companies listed on the Indonesia Stock Exchange and Bursa Malaysia
Summary
Business management requires accountability so that suspicion does not emerge among business people involved. To provide accountability to parties who have an interest in a company, every year the company publishes financial statements. Financial statements are financial information of a company within an accounting period which can be used to describe the performance of a company. Information available in financial statements is needed by Revised Manuscript Received on November 15, 2019 * Correspondence Author. Good financial statements are presented based on the principle of integrity. Statement of Financial Accounting Concept (SFAC) No 2 [3] explains that the integrity of financial statement information is information contained in financial statements presented fairly, unbiased and honestly. The integrity of financial statements is closely related to one of the characteristics required by IFRS, namely faithful representation. Financial information is useful in decision making if it is presented honestly and for what it is, so that the information reflects the actual situation
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