The Role of Corporate Governance as a Moderating Variable on Earnings Management and Carbon Emission Disclosure

Ayu Astari,Erwin Saraswati,Lilik Purwanti

doi:10.24815/jdab.v7i1.15402

Abstract

The purpose of this study is to examine the influence of earnings management on carbon emission disclosure with corporate governance as a moderating variable. The population was companies in the sector of industry and chemical, agriculture, energy, transportation listed on the Indonesia stock exchange (IDX). Based on the purposive sampling method, 12 companies were selected as the samples (60 firm-year observations). The data analysis technique used is the moderate regression analysis (MRA). The results showed that the earnings management has a significant positive effect on carbon emission disclosure. The board of commissioner size moderates the influence of the earnings management on the carbon emission disclosure. The board of directors has a role in affecting the carbon emission disclosure, while the independent commissioners, the institutional ownership, and the audit committee meetings do not have a significant effect on weakening the effect of profit management on carbon emission disclosure

Highlights

In 2010, Burger King decided to stop purchasing palm oil from PT
Research method The population of this study is companies in the basic industry and chemical, agriculture, energy, transportation sectors listed on the Indonesia Stock Exchange (BEI) between 2014 and 2018
Companies in the basic and chemical, agriculture, energy, transportation sectors listed on the Indonesia Stock Exchange 2014 – 2018

Summary

Introduction

In 2010, Burger King decided to stop purchasing palm oil from PT. Sinar Mas Agro Resources and Technology (SMART), because the suppling company has involved in the destruction of tropical forests, and other following consequences which contributed to global climate change or global warming (Neviana, 2010). As the gas emissions contributors, companies are encouraged to disclose information about carbon emissions they produce. Several countries such as the European Union, the United States, Canada, Japan, South Korea, and New Zealand have already mandatory regulations in place regarding carbon emission disclosure (World Resources Institute, 2015). In Indonesia, concern on the carbon emission disclosure has emerged after the government issued Presidential Regulation No 61/2011 concerning the National Action Plan for Reducing Greenhouse Gas Emissions (or RAN-GRK), and Presidential Regulatio No 71 (2011) regarding the implementation of national Greenhouse Gas Inventory (Nainggolan & Rohman, 2015). The carbon emission disclosure in Indonesia is still voluntary, every company has the flexibility in determining what information they will not disclose and consider as relevant information for the decision making process

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Results

Conclusion