THE INFLUENCE OF AUDIT COMMITTEE QUALITY, BOARD OF COMMISSIONER’S QUALITY, INSTITUTIONAL OWNERSHIPS, MANAGEMENT OWNERSHIPS TOWARD EARNINGS MANAGEMENT PRACTICE AND FINANCIAL PERFORMANCE AND THE IMPLICATION TOWARD THE FIRM VALUE (Survey on The Go-Public Companies Listed in The Indonesian Stock Exchange) | Harnovinsah | AKUNTABILITAS
THE INFLUENCE OF AUDIT COMMITTEE QUALITY, BOARD OF COMMISSIONER’S QUALITY, INSTITUTIONAL OWNERSHIPS, MANAGEMENT OWNERSHIPS TOWARD EARNINGS MANAGEMENT PRACTICE AND FINANCIAL PERFORMANCE AND THE IMPLICATION TOWARD THE FIRM VALUE (Survey on The Go-Public Companies Listed in The Indonesian Stock Exchange)
Harnovinsah Harnovinsah
Abstract
Financial report is an important factor for inventors to make investment decision in capital market. The. Publicity of financial report which has relevant information for decision making will be reacted by market player. Many investors and other users of financial report do not pay attention to the process of publishing financial report, so it pushes the emergence of dysfunctional behaviours, like earnings management practices.The purpose of this research is to study and to find out empirically the research’s evidence about the influence of audit committee and board of commissioner’s quality, institution and management ownerships toward earnings management practice and financial performance and their implication toward firm value. The population of this research is companies listed in Indonesian Stock Exchenge during the period 2007 – 2010 in amount of 105 companies. Based on the criteria, there are only 60 companies chosen as sample. The Method of analysis used in this research is path analysis, with the following hypotheses: (1) The Audit committee and the board of commissioner’s quality, institution and management ownership have influence on the earnings management practice. (2) The Audit committee and the board of commissioner’s quality, institution and management ownership, the earnings management practice have influence on corporate financial performance. (3) The earnings management practice and corporate financial performance have influence on firm value.The results of this study indicate (1)The audit committee quality negatively influence on earnings management practice, (2) The board of commissioner’s quality negatively influence on earnings management practice (3) The institutional ownership negatively influence on earnings management practice (4) the managerial ownership negatively influence on earnings management practice but not significantly (5) simultaneously The audit committee quality, The board of commissioner’s quality, institutional ownership and managerial ownership, have significant influence on earnings management practice, and (6) earnings management practice positively influence on corporate financial performance but not significant, (7) earnings management practice positively influence on firm value, but not significant, (8) corporate financial performance positively influence on firm value.
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