Abstract
This research is a quantitative causality study that analyzes the effect of fraud disclosure, internal control, information technology on corporate performance and corporate governance as moderating variables. The results of this study are expected to contribute to the existing literature by overcoming some of the limitations articulated from previous studies. First, it offers new empirical insights on company risk and disclosure of fraud by management by basing research in behavioral theories that emerge from the board of directors and corporate governance, where corporate decision making is not only assumed to be underlined by formal approaches and CG mechanisms, but also CG arrangements informal, limited rationality, political bargaining, routine and satisfying behavior. The fixed-effect regression model is used to study the relationship of fraud disclosure, internal control and information technology of financial performance while the random-effect regression model is used from non-financial performance. Panel data of 192 sample observations from public companies in the banking sector which are listed on the Indonesia Stock Exchange and are included in the Top 50 ASEAN Scorecard. The findings show the disclosure of fraud, internal control and information technology have a positive effect on company performance, both financial and non-financial performance and corporate governances strengthen the financial performance but weaken the non-financial performance Keywords: Disclosure of Fraud, Internal Control, Information Technology, Corporate Performance, Corporate Governance DOI: 10.7176/EJBM/12-33-09 Publication date: November 30 th 2020
Highlights
The progress of a country's economy can be measured in various ways one of which is capital market activity in the country
A strong corporate governances (CG) structure will provide a powerful monitoring tool for managerial decision making and limit activities that have an impact on company performance both in the use of company resources and with the implementation of information technology developed or adopted by the company
Result and Discussion 4.1 Descriptive Statistics Table 1. descriptive statistics for all variables used in this study
Summary
The progress of a country's economy can be measured in various ways one of which is capital market activity in the country. Research contributes to the existing literature by overcoming some of the limitations articulated from previous studies It offers new empirical insights on company risk and disclosure of fraud by management by basing our research on behavioral theories that emerge from the board of directors and corporate governance, where corporate decision making is assumed to be underlined by formal approaches and CG mechanisms, and CG arrangements informal, limited rationality, political bargaining, routine and satisfying behavior (Van Ees et al, 2009; Huse et al, 2011). The results of this study can provide more information to senior management and the company's board of directors, so that they are more aware of the importance of their supervisory function, ethical behavior, their own behavior and tone and effective corporate governance to avoid future companies. 0 = Constant 1- 6 = Cohesive regression FP = Corporate Performance FD = Fraud Disclosure IC = Internal Control TI = Information Technology CG = Corporate Governance ε = Error.
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