Abstract
AbstractObjective – This study aims to analyze the influence of internal mechanisms (independent commissioner, ownership structure and audit committee) on accounting conservatism in mining companies listed on the Indonesia Stock Exchange for the period of 2015-2017. Design/methodology – Secondary data in the form of financial statements are collected from the sub-sector companies in mining industry from the Indonesian capital market directory (ICMD). The data is taken from companies listed in Indonesia stock exchange for the period of 2015-2017. Samples are determined by using purposive sampling method and are selected based on certain considerations or criteria. The analysis model used in this study is path analysis. Results – The results of this study prove that independent commissioners, ownership structures and audit committees have a positive effect on accounting conservatism. Research limitations/implications – This study is perhaps limited in the number of variables used to test the model. There may be other variables that affect accounting conservatism so that further studies can extend this study by utilizing more variables.
Highlights
Accounting conservatism is one of the accounting principles used in achieving the objectives of financial statements
The results of this study prove that independent commissioners, ownership structures and audit committees have a positive effect on accounting conservatism
Based on the description of the results of this study it is can be concluded that: 1) the results of testing the first hypothesis indicate that independent commissioners have a positive effect on accounting conservatism
Summary
Accounting conservatism is one of the accounting principles used in achieving the objectives of financial statements. The principle of conservatism assumes that when managers are faced with choosing between two or more accounting principles that are accepted, the manager must choose the option that has the least effect on shareholders' equity. This principle implies that the lowest value of assets and income and the highest value of obligations and expenses should be chosen for reporting (Belkaoui, 2011: 288). There are two conflicting opinions regarding the principles of accounting conservatism. Accounting conservatism is used to reduce risk and the excessive use of optimism carried out by managers and business owners (Sulastri and Anna, 2018)
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