DO FINANCIAL REPORTING QUALITY AND CORPORATE GOVERNANCE HAVE RECURSIVE SIMULTANEOUS EFFECT? EVIDENCE FROM INDONESIAN MANUFACTURING COMPANIES
Journal Title: AKRUAL: Jurnal Akuntansi - Year 2018, Vol 9, Issue 2
Abstract
Financial reporting reflects transparency of the firm and if it could not explain the changes in shareholders‟ value in a timely manner; shareholders need additional monitoring mechanism. This study aims to investigate the effect of financial statements‟ quality on corporate governance mechanism and to examine the recursive simultaneous effect between both. This study uses earnings timelines as a proxy of financial reporting‟s quality; proportion of independent board and board size as proxies of corporate governance mechanism. Using Two Stage Linear Regression (TSLS) and samples consist of manufacturing companies listed on Indonesian Stock Exchange (IDX) in 2015, this study finds that earnings timelines have significant influence on board size; earnings timelines and proportion of independent board have the recursive simultaneous effect; however, it fails to document the recursive simultaneous effect of earnings timelines and ownership concentration. This study is the first that investigates the recursive simultaneous effects of financial reporting quality and corporate governance.
Authors and Affiliations
Dianwicaksih Arieftiara, Sidharta Utama
Keywords
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- EP ID EP359317
- DOI 10.26740/jaj.v9n2.p168-185
- Views 138
- Downloads 0
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