Public Companies In Indonesia Research Articles

Profitability and Market Value Effect on Carbon Emission Disclosures: The Moderating Role of Environmental Performance

Climate change is an issue that is of concern to the global public and scientific community. There is a close relationship between climate change and carbon emissions, which are the primary cause of global warming. Reporting on carbon emissions is essential for corporate accountability to stakeholders when evaluating a company's financial and non-financial performance. Good management of carbon emissions will enhance the company's reputation. This study analyses the impact of company profitability and market value on the disclosure of carbon emissions, with environmental performance serving as a moderating variable in the context of Indonesian public companies. This study concludes that: (1) There is no significant impact on profitability, as measured by Return on Assets, on Carbon Emission Disclosure; (2) The study finds that there is a statistically significant positive relationship between market value, measured by Tobin's Q, and the level of carbon emission disclosure. This relationship is significant at a 5% significance level; (3) The moderating effect of environmental performance on the relationship between profitability, as measured by return on assets, and carbon emission disclosure is found to be insignificant; (4) The significance level of 10% indicates that the relationship between environmental performance, as a measure of a company's environmental practices, and market value, as represented by Tobin's Q, is strengthened concerning the disclosure of carbon emissions. This research can contribute to developing accounting knowledge to close gaps in the body of knowledge regarding the disclosure of carbon emissions in developing nations, particularly Indonesia.

Controlling Function of Corporate Governance to The Relevance of Accounting Earnings Information

The relevance of accounting earnings information is needed to help users of financial statements to make a decision. This research intends to expand previous empirical studies by examining more comprehensive corporate governance variables, which are the proportion of audit committees and commissioners, the role of financial accounting experts in the audit committee, and ownership structure to increase the relevance of accounting earnings information. The aim of this research is to examine whether controlling function held by the company in order to perform good corporate governance can affect to the informativeness of accounting earnings in Indonesia. This research method uses Pooled Least Square (PLS) with total sample 327 firm-year observations of Indonesian public companies from 2017 to 2019. The result shows that the existence of effective controling function by multiple large shareholder, accounting expert, audit committee, and board size can increase the relevance of earnings information that rely on financial statement. This research findings could be as an additional literature in financial accounting and corporate governance area, and also for practitioners in manufacturing company in Indonesia that if a firm has good controlling function, it can provide relevant information about earnings to shareholders.

Does the gender diversity of the Board of Commissioners, Family Ownership, and Institutional Ownership Reduce the Likelihood of Financial Distress During COvid-19?

The purpose of this study is to investigate the effect of the gender diversity of the board of commissioners, family ownership, and institutional ownership on the possible financial distress of Indonesian public manufacturing companies during the COVID-19 pandemic and non-pandemic periods. This study uses logistic regression panel data to determine the effect of the three aspects of Corporate Governance (CG) studied on financial distress. A total of 648 company-year observations from 108 companies during the period 2017-2022 were used in the analysis. Research findings indicate that in non-pandemic periods, family ownership has a positive effect on financial distress, but the positive effect decreases during pandemic periods. Institutional ownership has a negative influence in the non-pandemic period and that influence has not changed during the pandemic period. Meanwhile, the gender diversity of the board of commissioners does not affect financial distress in either the pandemic period or the non-pandemic period. This report provides insights for company management and regulators in developing CG mechanisms, especially related to the board of commissioners' gender diversity, family ownership, and institutional ownership.

Exploring how good corporate governance shapes financial performance

This research aims to comprehensively investigate the impact of Sharia Supervisory Board, Board of Commissioners, Board of Directors, and Audit Committee on the financial performance of Islamic banks in Indonesia through a literature review approach. Utilizing the SINTA database as the primary source, the study will identify, select, and analyze relevant literature to understand the extent of each supervisory entity's influence on the financial performance. According to the analyzed literatures, the Sharia Supervisory Board profoundly influences Islamic financial institutions, ensuring adherence to Sharia principles, building trust, and mitigating risks, positively impacting financial performance. The Board of Commissioners, integral in strategic decisions, risk management, and governance, shapes overall financial well-being. The Board of Directors significantly influences financial outcomes, overseeing transparency and regulatory compliance. The proposed commissioners' board, with an independent judiciary, aims for unbiased management evaluations, essential for good corporate governance. Lastly, the Audit Committee enhances financial performance by ensuring transparency and mitigating risks, a crucial component mandated for public companies in Indonesia.

Minimizing Disguised Equity as Mandated by the Income Tax Law of Indonesia

The Indonesian government has limited the Debt-to-Equity Ratio (DER) to a maximum of 4:1 since the 2016 tax year and reduced the corporate income tax rate from 25% to 22% since the 2020 tax year. I compared data on public companies in Indonesia and Thailand to see the impact of reducing tax rates to reduce Tax Avoidance and reduce Disguised Equity. I also analyzed the findings of eleven previous studies regarding the effectiveness of DER restrictions in Reducing Tax Avoidance and Disguised Equity. As a result, a decrease in the tax rate has not been correlated with tax avoidance and DER. DER restrictions, although effective in reducing Disguised Equity, are ineffective in boosting tax revenues through company capital structure changes because with a DER limit of 4:1, companies still have room for tax savings. The DER limit of 4:1 is still higher than the average DER in sample companies of 0.3:1. Therefore, I suggest that the government immediately implement interest cost limitation regulations with the Interest Expense Limitation Based on EBITDA provisions as recommended by the OECD. I simulated changes in interest cost financing restrictions for companies listed on the Indonesia Stock Exchange between 2016 and 2021 if using a DER limit of 4:1 and if using Interest Expense Limitation Based on EBITDA. As a result, the government can increase potential tax revenues significantly.

Unveiling the Motivation of Fraudulent Financial Statement in ENVY: Fraud Triangle Theory

This study aims to unravel the motivations behind the production of fraudulent financial statements by PT. Envy Technologies Indonesia Tbk. It employs a case study approach and the fraud triangle theory to shed light on this critical issue. This research is of paramount importance because fraudulent financial statements can have severe repercussions, adversely affecting shareholders and the broader capital markets. The primary findings of this investigation indicate that three key factors played a significant role in encouraging fraud within PT. Envy Technologies Indonesia Tbk. These factors are pressure, opportunity, and rationalization. The impetus for such fraudulent actions is traced back to the pressure exerted on maintaining high stock prices. The opportunities for manipulation arise from a deficiency in internal oversight mechanisms, enabling misconduct. Furthermore, rationalizations are formulated to justify the diversion of IPO funds in a manner that aligns with the information disclosed in the prospectus. This research offers a nuanced understanding of the factors that drive financial statement fraud in Indonesian public companies. It highlights that fraudulent activities are often the result of a combination of pressures, opportunities, and rationalizations. Recognizing these factors can be instrumental in implementing preventive measures to mitigate the occurrence of such fraud in the future.

The Influence of Tax Exclusion Policies and Other Factors on the Value of Dividends Paid by Public Companies in Indonesia

This research aims to determine the effect of the dividend exclusion policy as a tax object as regulated in the Undang-Undang Cipta Kerja and its derivatives on dividends paid by companies. It is hoped that dividend payments can become a source of investment in Indonesia so that an increase in the amount of dividends paid will increase investment in Indonesia. This research also wants to know the effect of net profit, return on assets (ROA), free cash flow (FCF), and debt-to-equity ratio (DER) on the dividends paid by the company. The data used in the research is data from 2017 – 2022 which comes from 30 companies with the largest market capitalization on the IDX. The analysis was carried out using multiple linear regression on panel data using the Stata application version 16. Based on the research results, it is known that the policy of excluding dividends as a tax object does not have a significant effect on the dividends paid by companies. Meanwhile, net profit, ROA, and FCF have a significant and positive effect on the dividends paid by the company. DER is also known to have a significant and negative effect on the dividends paid by companies. The implication of this research is that to increase the dividends paid by the company, the policies implemented must be able to be utilized by the majority shareholders and there will be an increase in the company's net profit, ROA, and FCF as well as a decrease in DER.

Determinants of Sustainability Report Quality in Indonesian Public Companies: An Isomorphism Theory Approach

Determinants of Sustainability Report Quality in Indonesian Public Companies: An Isomorphism Theory Approach

FINANCIAL SHENANIGANS AND COMPANY CHARACTERISTICS IN INDONESIA PUBLIC COMPANY

Financial shenanigans are moves made by a company's management with the intention of falsifying the company's financial status and stated performance. The goal of this study is to clarify if financial considerations and company size have an impact on a company's propensity to engage in financial misdeeds in Indonesian public companies. Financial leverage, financial stability, personal financial need, and return on assets are the financial characteristics that were examined in this study. An Indonesian firm that has gone public serves as the study's sample. Purposive sampling was used in this study's sampling. This study's analysis method makes use of multiple linear regression. The findings revealed that the company was unaffected by all variables except for financial leverage.

The effect of independent commissioners, EVA, and ROA on firm value

The rising number of companies listed on the Indonesia Stock Exchange (IDX) each year reflects a growing trend of public companies in Indonesia. Investment in the manufacturing sector escalated from IDR 272.9 trillion in 2020 to IDR 325.4 trillion in 2021. This research aims to measure influence of the number of independent commissioners, Economic Value Added (EVA), and Return on Assets (ROA) on firm value. Multiple regression analysis is used as the method of analysis, and sampling is done using purposive sampling. The total sample consists of 202 samples from 45 consumer goods sector companies for the period of 2015-2019. The results of this research indicate that the number of independent commissioners, EVA, and ROA have a significant influence on the value of consumer goods sector companies registered on the Indonesia Stock Exchange (IDX) for the period of 2015-2019. This highlights the importance of ROA and EVA that can impact firm value and the role of independent commissioners in running a company.

ESG Performance and Firm Value – Do Busy Directors Help?

ESG is an important issue companies encounter when conducting business. The implementation of ESG with good performance will lead the company to be more prosperous and attractive to investors. This study examines how busy directors affect the increase in the value of companies that have good ESG performance within a sample of 41 public companies in Indonesia during the years 2017-2021. Data were obtained from Thomson Reuters and the companies’ annual reports. By using ESG score as a proxy for ESG performance variables and the percentage of busy directors’ presence in public companies, we can determine their influence on firm value. Panel data regression in e-views shows a positive and significant influence between ESG performance and firm value, and there is no significant effect between busy directors and firm value. Furthermore, we also find that the influence of busy directors as a moderator weakened the positive impact of ESG performance on firm value.

Dampak Pandemi Covid-19 Terhadap Aktivitas Pengauditan

This study investigates the impact of the COVID-19 pandemic on the auditing activities of Indonesian public companies. During a pandemic auditing activities are predicted to affect the auditor's opinion regarding going concern, audit delay, audit opinion, and the decision to use Big-4 versus non-Big-4 auditors. A sample was selected from tourism and manufacturing companies from 2018-2021 due to the severe impact of COVID-19 on these two sectors. The results of the quantitative analysis show that: 1) Auditors issued more going-concern opinions during the Covid-19 pandemic. 2) Auditors spent more time completing auditing tasks during the Covid-19 pandemic. 3) The number of qualified opinions was relatively similar in the pre-pandemic period and during the Covid-19 pandemic. 4) Clients using Big-4 KAPs decreased during the pandemic. In addition, the content analysis shows: 1) More going concern audit opinions should have been issued during the pandemic than currently available. Some auditors seem to deliberately not mention explicitly the impact of Covid 19 on the continuity of the company. 2) Only a small number of companies disclose the impact of Covid 19 on the company's financial performance.

The Effect of Audit Quality, Auditor Independence, and Financial Reporting Transparency on Internal Control Effectiveness: A Case Study of a Public Company in Indonesia

This study investigates the intricate dynamics of corporate governance in publicly traded companies in Indonesia, focusing particularly on the interaction of Audit Quality, Auditor Independence, Financial Reporting Transparency, and Internal Control Effectiveness. The present study showcases the development of a comprehensive measurement model, hence offering empirical support for the reliability and validity of the chosen constructs. The utilization of structural equation modeling reveals statistically significant positive correlations, indicating that heightened levels of Audit Quality, Auditor Independence, and Financial Reporting Transparency are associated with enhanced Internal Control Effectiveness. The model fit assessment confirms the adequacy of the proposed structural equation model in capturing the observed covariance structure. The explained variance in Internal Control Effectiveness highlights the substantial impact of these governance elements. These findings offer valuable insights for stakeholders and policymakers seeking to fortify corporate governance practices in the Indonesian business landscape.

Tinjauan Akuntansi Aset Tak Berwujud dalam Industri Sepak Bola di PT Bali Bintang Sejahtera Tbk Review of

Football is the most popular sport in the world. Its popularity makes football a professional industry that generates trillions of rupiah. This rapid development requires the football team to pay attention to its accounting records. One of the most important assets to pay attention to in accounting for a football team is players and team officials, which are classified as intangible assets. This study aims to determine and understand the accounting treatment of football team players and officials and to determine the suitability of their treatment with the Statement of Financial Accounting Standards Number 19 regarding intangible assets. The research object chosen was the first football team to become a public company in Indonesia, PT Bali Bintang Sejahtera Tbk or Bali United FC. The accounting treatments discussed include general policies, initial recognition and measurement, measurement after initial recognition, amortization, impairment, derecognition, disposal, and disclosure. The method used in collecting data is literature study and secondary data in the form of the 2019 Financial Statements of PT Bali Bintang Sejahtera Tbk. The intangible assets in the form of players and team officials at PT Bali Bintang Sejahtera Tbk are called registration. Based on the results of the study, it can be concluded that the accounting treatment of players and team officials at PT Bali Bintang Sejahtera Tbk is in accordance with Statement of Financial Accounting Standards Number 19.

Top Company Officers and Auditor School-ties on Audit Fee: Evidence From Indonesia

The purpose of this study is to examine the relationship between top management school-ties represented by the CEO (Chief Executive Officer), CFO (Chief Financial Officer), and the Auditor with the Audit Fee. This study uses 627 observations from companies listed on the Indonesia Stock Exchange from 2010 to 2018 and uses the Ordinary Least Square Regression analysis model. This study finds that the combination of school-ties between CFO and Auditor showed a positive relationship with Audit Fee, while the combination of school-ties between CEO and Auditor did not. This study contributes to literature related to the relationship between school-ties and audit fees of public companies in Indonesia. It is also hoped that it can contribute to the implementation of company policies, management, external parties, named regulators, and investors. This study chose school-ties as a part of social-ties to represent the condition of Top company officers and Auditors ties. JEL Classification: H83, M42, G32, G34

Determinants of Audit Report Lags of Public Companies in Indonesia

The Indonesian Financial Service Authority (FSA) mandates that every listed company submit its financial reports by the end of the fourth month following the end of the financial year. When COVID-19 struck the world in 2020, the FSA extended the reporting deadline until the end of May. This policy was implemented to account for delays caused by COVID-19. This research aims to determine the factors associated with audit report lags and ensure the timeliness of financial reporting. This research is categorized as descriptive verification research. The descriptive method employed in this study aims to elucidate the determinants of audit report lags. The verification research aspect involves conducting hypothesis tests to examine the relationship between profitability, leverage, the size of Public Accounting firms, and audit opinions on audit report lags. Our research was conducted to gather empirical evidence regarding the relationship between profitability, leverage, the size of accounting firms, and audit opinions on audit report lag. This research contributes to maintaining the relevance of the information contained in financial reports. The test results indicate that profitability positively correlates significantly with audit report lags. Companies audited by the Big Four firms have shorter audit durations compared to non-Big Four firms.Additionally, companies with standard audit opinions experience shorter audit durations than those with non-standard audit opinions. Leverage was found to have no significant correlation with audit report lags. Our findings suggest that smaller firms tend to delay their reports. However, they are published as soon as possible when audited by a reputable accounting firm and receive a standard audit opinion. The COVID-19 pandemic may have prompted our sample companies to postpone their reports. Future studies should consider the pandemic's impact on audit report lag.

Determinants of Carbon Emission Disclosure: A Study on Non-Financial Public Companies in Indonesia

This study investigates the direct and indirect associations between carbon emission disclosure with firm size, financial performance, and environmental performance. The samples were selected using a purposive technique and obtained 113 observations. Data are collected by downloading sustainability reports, annual reports, and annual financial statements and analyzed using WarpPLS 7.0 software. The authors find that firm size has a negative influence on financial performance. Firm size has a positive influence on environmental performance and carbon emission disclosure. Financial performance and environmental performance do not affect the carbon emission disclosure and do not mediate the effect of firm size on carbon emission disclosure.

Board of Commissioners and Corporate Social Responsibility Disclosure: The Role of Corporate Performance As Moderation

This research has the desire to prove the role of financial performance in strengthening the relationship between the role of the board of commissioners of liquidity and CSR. Research was conducted on consumer sector companies in the Indonesian capital market. The research was carried out from 2017 – 2021. The data analysis method used is Moderating Regression Analysis (MRA). The process of statistical testing is done with the help of STATA. The result of founding independent commissioners' roles and liquidity has a positive effect on CSR disclosure, besides that company performance which functions as a moderating variable also has a positive effect on company performance. In testing the moderating effect it was found that the company's performance weakened the relationship between liquidity and CSR, while the second test found that the company's performance strengthened the board of commissioners' relationship with CSR disclosure in consumers of good companies in the Indonesian Stock Market, Theoretically, our research will contribute to the development of the concept of green accounting and governance, which of course will encourage increased corporate reputation, besides that practically our research results can be used as a policy reference for public companies in Indonesia in increasing the implementation of environmental, social and environmental responsibility values governance.

Internal audit function and investment efficiency: Evidence from public companies in Indonesia

Internal audit function and investment efficiency: Evidence from public companies in Indonesia

The Influences of Slack Resources, Board Gender Diversity on the Quality of Corporate Social Responsibility Disclosure

This study aims to examine the effect of slack resources and board gender diversity on the quality of corporate social responsibility disclosure. This study also examines the board's moderating role of gender diversity on slack resources and the quality of corporate social responsibility disclosure. The analysis of this research uses the panel data analysis method. The research sample consisted of 44 companies listed on the IDX and published sustainability reports during the 2018-2019 period. The results of the study found that board gender diversity on the board of commissioners has a negative effect on the quality of corporate social responsibility disclosure. Slack resources and board gender diversity of directors are proven to have no effect on the quality of corporate social responsibility disclosure. The results also show that the gender diversity board does not moderate the relationship between slack resources and the quality of corporate social responsibility disclosure. This is due to the low proportion of women in the board structure of public companies in Indonesia