AN EXAMINATION OF VOLUNTARY DISCLOSURE, INDEPENDENT BOARD, INDEPENDENT AUDIT COMMITTEE AND INSTITUTIONAL OWNERSHIP: FIRM SIZE AS A MODERATOR

Hisar Pangaribuan
| Abstract views: 531 | views: 188

Abstract

: This study examines the impact of the independent board, independent audit committee and institutional ownership on voluntary disclosure (by placing company size as a moderating variable) in Indonesia banking companies. Data collected from the annual report of banking companies listed on the Indonesia Stock Exchange throughout the year of study. Hypotheses developed to be tested with a variance based approach and the results were interpreted. The result has shown that the increase of independent board members and independent audit committee members tend to decrease the level of voluntary disclosure (although the impact is not significant). Independent board and independent audit committee performed this to reduce cost due to a high disclosure and to avoid the threat of high competition in banking companies. The other result has shown that institutional investors are considered more professional and powerful in supervising management to disclose more information to the public. The final section of the study's findings indicated that firm size cannot be as a moderating variable on the impact of the independent board, independent audit committee and institutional ownership toward voluntary disclosure.

 

Studi ini meneliti dampak dewan independen, komite audit independen dan kepemilikan institusional terhadap pengungkapan sukarela (dengan menempatkan ukuran perusahaan sebagai variabel moderasi) di perusahaan perbankan Indonesia. Data dikumpulkan dari laporan tahunan perusahaan perbankan yang terdaftar di Bursa Efek Indonesia sepanjang tahun studi. Hipotesis dikembangkan untuk diuji dengan pendekatan berbasis varians dan hasilnya ditafsirkan. Hasilnya menunjukkan bahwa peningkatan anggota dewan independen dan anggota komite audit independen cenderung menurunkan tingkat pengungkapan sukarela (walaupun dampaknya tidak signifikan). Dewan independen dan komite audit independen melakukan ini untuk mengurangi biaya karena pengungkapan yang tinggi dan untuk menghindari ancaman persaingan yang tinggi di perusahaan perbankan. Hasil lain menunjukkan bahwa investor institusional dianggap lebih profesional dan kuat dalam mengawasi manajemen untuk mengungkapkan lebih banyak informasi kepada publik. Bagian terakhir dari temuan penelitian menunjukkan bahwa ukuran perusahaan tidak dapat sebagai variabel moderat pada dampak dewan independen, komite audit independen dan kepemilikan institusional terhadap pengungkapan sukarela. 

Kata Kunci : Pengungkapan Sukarela, Dewan Independen, Komite Audit Independen, Kepemilikan Institusional, Ukuran Perusahan 


Keywords

Voluntary Disclosure; Independent Board; Independent Audit Committee; Institutional Ownership; Size

Full Text:

PDF

References

Aboagye, O. F., Bedi, I. & Kwakye, T. O. (2012). Corporate governance and disclosure practice of Ghanaian listed companies, Journal of Accounting in Emerging Economies, 2(2).

Adhikary, B. K. & Mitra, R. K. (2016). Determinants of audit committee independence in the financial sector of Bangladesh. Applied Finance and Accounting, 2(2): 46-56, August.

Akhtaruddin, M. & Haron, H. (2010). Board ownership, audit committees' effectiveness, and corporate voluntary disclosures. Asian Review of Accounting, 18(3): 245-259.

Alfraih, M. M., & Almutawa, A. M. (2017). Voluntary disclosure and corporate governance: empirical evidence from Kuwait. International Journal of Law and Management, 59(2):217-236.

Al-Harun, M. A. & Rouf, M. A. (2011). Ownership structure and voluntary disclosure in annual reports of Bangladesh. Pak. J. Commer. Soc. Sci, 5(1), 129-139.

Al-Janadi, Y., Rahman, R. A. & Omar, N. H. (2013). Corporate governance mechanism and voluntary disclosure in Saudi Arabia. Research Journal of Finance and Accounting, 4(4): 25-36.

Arouri, H., Hossain, M., and Muttakin, M. B. (2014). Effects of board and Ownership structure on corporate performance: Evidence from GCC countries. Journal of Accounting in Emerging Economies, 4(1):117‐130.

Asian Development Bank. (2000). Corporate governance and finance in East Asia, 1st vol. Asian Development Bank, Manilla.

Audra, B. dan White, J. (2015). The effect of institutional of ownership on firm transparency and information production. Journal of Financial Economics.

Azzam, I. (2010). The impact of institutional ownership and dividend policy on stock returns and volatility: evidence from Egypt.

International Journal Of Business, 15(4), 2010 Issn: 1083-4346. Department of Management, American University in Cairo AUC Avenue, Cairo, Egypt.

Beattie, V. & Thomson, S. J. (2007). Lifting the lid on the use of content analysis to investigate intellectual capital disclosure. Accounting Forum, 31: 129-163.

Bedard, J., & Gendron, Y. (2010). Strengthening the financial reporting system: can audit committees deliver?. International Journal of Auditing, 14(2), 174-210.

Belkaoui, A. R. (2004). Accounting Theory. 5th edition. Thomson Learning.

Bhasin, M. L., Makarov, R. R. & Orazalin, N. S. (2012). Determinants of voluntary disclosure in the banking sector: An empirical study. International Journal of Contemporary Business Studies. 3(3): 2156:7506.

Botosan, C. A. (1997). Disclosure level and the cost of equity capital. The Accounting Review, 72(3):323-349. July.

Braiotta, L., Gazzaway, R. T., Colson, R. & Ramamoorti, S. (2010). The Audit Committee Handbook. Canada: John Wiley & Sons, Inc.

Chakroun, R. (2013). Family control, board of directors’ independence and extent of voluntary disclosure in the annual reports: case of Tunisian companies. Journal of Business Studies Quarterly, 5(1).

Chakroun, R. & Matoussi, H. (2012). Determinants of the extent of voluntary disclosure in the annual reports of the Tunisian firms. Accounting and Management Information Systems, 11(3) : 335-370.

Cornett, M. M., Marcus, A. J., Saunders, A. S. & Tehranian, H. T. (2006). Earning management, corporate governance, and true financial performance. Available at SSRN: https://ssrn.com/abstract=886142., [9 March 2018].

Crane, A. D., Michenaud, S., & Weston, J. P. (2016). The effect of institutional ownership on payout policy: evidence from index thresholds. The Review of Financial Studies, 29(6).

Dulacha, G. B. (2007). Determinants of voluntary disclosure in Kenyan companies annual reports. African Journal of Business Management, 1(5): 113-128.

Fama, E. F. & Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2): 301:325.

Forum for Corporate Governance in Indonesia (2000). Seri tata kelola perusahaan.

Gantyowati, E. & Nugraheni, R. L. (2014). The impact of financial distress status and coporate governance structures on the level of voluntary disclosure within annual reports of firms. (Case study non-financial firms in Indonesia over the period 2009-2011). Journal of Modern Accounting and Auditing. 10(4) : 389-403. April 2014.

Gregory, M.F., Bosch, F.A.J.V., & Henk, V. (2004). The importance of disclosure in corporate governance self-regulation across Europe: a review of the winter report and the EU action plan. International Journal of Disclosure and Governance. March 2004; Vol. 1, No.2.

Habbash, M., Hussainey, K., & Awad, A. E. (2016). The determinants of voluntary disclosure in Saudi Arabia: an empirical study. International Journal Auditing and Performance Evaluation. 12(3): 213-236.

Hendriksen, E. S. & Breda, M. F. V. (2001). Accounting Theory, 5th Ed. Boston: Southern Methodist University.

Hossain, M. & Reaz, M. (2007). The determinants and characteristics of voluntary disclosure by Indian banking companies. Corporate Social Responsibility and Environmental Management, 14: 274-288.

Huang, C. J. (2010). Board, ownership and performance of banks with a dual board system: evidence from Taiwan. Journal of Management and Organization, Vol. 16.

IFCASI - International Financial Corporation Advisory Service in Indonesia. (2014). The Indonesia corporate governance manual. Jakarta: OJK dan IFC.

Jensen, M. C. & Meckling, W. H. (1976). Theory of the firm: managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3:303-360.

Jiang, H., Habib, A. & Hu, B. (2011). Ownership concentration, voluntary disclosures and information asymmetry in New Zealand. The British Accounting Review, 43(1):39-53.

Kangarlouei, S. J., Birjandi, H. A. & Motavassel, M. (2013). The effect of ownership structure on voluntary disclosure in Tehran Stock Exchange. International Journal of Business Analytics and Intelligence. 1(1): 22-31.

Karim, K. E., Pinsker, R., & Robin, A. (2013). Firm size and the voluntary disclosure of nonfinancial information by private versus public firm managers. Managerial Auditing Journal, 28(9):866-892.

Kaya, D. (2014). The influence of firm-specific characteristics on the extent of voluntary disclosure in XBRL: Empirical analysis of SEC filings. International Journal of Accounting and Information Management, 22(1): 2-17.

Li, J., Mangena, M. & Pike, R. (2012). The effect of audit committee characteristics on intellectual capital disclosure. The British Accounting Review, 44(2):98-110.

Madi, H. K., Ishak, Z. & Manaf, N. A. (2014). The impact of audit committee characteristics on corporate voluntary disclosure. International Conference on Accounting Studies. ICAS 2014.

Mokhtari, Z. & Makerani, K. F. (2013). Relationship of institutional ownership with firm value and earning quality: Evidance from Tehran Atock Exchange. International Journal of Economy. 2(7):495-502. July.

Monks, R. A. G. & Minow, N. (2011) Corporate Governance 5th edition. United Kingdom: John Wiley & Son Ltd.

Nandi, S. & Ghosh, S. (2012). Corporate governance attributes, firm characteristics and the level of corporate disclosure: Evidence from the Indian listed firms. Decision Science Letters, 2:45-58.

Pangaribuan, H. (2016). Pengaruh Karakteristik Komite Audit, Karakteristik Dewan Komisaris dan Struktur Kepemilikan terhadap Kualitas Audit serta Implikasinya terhadap Kinerja Keuangan Perusahaan. Disertasi doktoral. Universitas Katolik Parahyangan, Bandung.

Otoritas Jasa Keuangan. (2014). Peraturan Otoritas Jasa Keuangan Nomor 33/POJK.04/2014 tentang direksi dan dewan komisaris emitem atau perusahaan publik. Jakarta: Otoritas Jasa Keuangan.

_________________. (2015). Peraturan Otoritas Jasa Keuangan Nomor 55/POJK.04/2015 tentang Pembentukan dan Pedoman Pelaksanaan Kerja Komite Audit. Jakarta: Otoritas Jasa Keuangan.

Rouf. A. (2011). Corporate characteristics, governance attributes and the extent of voluntary disclosure in Bangladesh. African Journal of Business

Management. 5 (19): 7836-7845. 9 September 2011.

Sanjaya, I.P.S., & Young, L. (2012). Voluntary disclosure and earnings management at bank companies listed in Indonesia Stock Exchange. China-USA Business Review. ISSN 1537-1514. March 2012, Vol. 11, No. 3.

Scaltrito, D. (2016). Voluntary disclosure in Italy: Firm-specific determinants an empirical analysis of Italian listed companies. EuroMed Journal of Business, 11(2): 272-303.

Sihombing, J., & Pangaribuan, H. (2016). Corporate governance structure, disclosure and information asymmetry in Indonesia banking industry. Journal of International Scholars’ Conference. Vol 1, No 3 (2016)

Utama, A. A. (2012). Company disclosure in Indonesia: Corporate governance practice, ownership structure, competition and total assets. Asian Journal of Business and Accounting, 5(1):75-108.

Wijantini. (2006). Voluntary disclosure in the annual Reports of financially distressed Companies in Indonesia. Gadjah Mada International Journal of Business. September-December 2006, Vol. 8, No. 3, pp. 343–365.

Copyright (c) 2019 Jurnal Muara Ilmu Ekonomi dan Bisnis

Refbacks

  • There are currently no refbacks.