Abstract
<p>This research has an aim to empirically prove the influence of a company's broad size, audit committee, growth opportunities, firm size, firm risk, capital intensity, and leverage on accounting conservatism. The research sample are the manufacturing companies listed on the Indonesia Stock Exchange (BEI) in the period of 2011-2014 which was chosen by purposive sampling and 28 companies in criteria were obtained.</p><p><br />This research used the multiple linear regression for data analysis. The results of the research showed that (1) broad size, audit committee, growth opportunities, firm size, firm risk, capital intensity, and leverage had a simultaneous influence to accounting conservatism, (2) broad size, firm size, and firm risk had a partial influence to accounting conservatism, (3) audit committee, growth opportunities, capital intensity, and leverage do not have partial influence to accounting conservatism.</p><p><br />Keywords: Accounting Conservatism, Audit Committee, Broad Size, Capital Intensity, Firm Size, Firm Risk, Growth Opportunities, Leverage</p>
Highlights
Financial reports have to fulfill the aim, regulations and principles of accounting which are corresponding with the general applied regulations to be able to produce financial reports which are able to be accountable and beneficial to every user
The phenomenon of the presence of a case which has occurred in the Indonesia Stock Exchange as a cause of that flexibility which are such as PT
The cases which occurred on Kimia Farma and Indofarma showed the failure in accounting conservatism, where the management party are not careful in presenting financial reports so it causes an overstate of profit on net profit
Summary
Financial reports have to fulfill the aim, regulations and principles of accounting which are corresponding with the general applied regulations to be able to produce financial reports which are able to be accountable and beneficial to every user. Conservatism is an attitude or view in facing uncertainty for taking action or deciding based on the worst outcome of the uncertainty (Soewardjono, 2010) The implication of this concept to financial reporting is that generally accounting will acknowledge soon the costs or losses which most likely will occur but are not anticipated (acknowledging first) the profit or income that will come though they are very likely to occur. The cases which occurred on Kimia Farma and Indofarma showed the failure in accounting conservatism, where the management party are not careful in presenting financial reports so it causes an overstate of profit on net profit. In this case the AFEBI Accounting Review (AAR) Vol.. In this case the AFEBI Accounting Review (AAR) Vol. No.01, June 2017 company is judged to have excess optimism in acknowledging profit so the profit value becomes larger than it should
Sign-in/Register to view highlights & summary 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 callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
