Pengaruh Corporate Governance Terhadap Financial Restatement Pada Perusahaan Di Indonesia

Abstract

This study examines the influence of the number of boards of directors, proportion of independent commissioners and the frequency of audit committee meetings on financial restatement. The study used samples of listed companies ion Indonesia Stock Exchange (IDX) in all industries with excluding the financial industry, and the study period in 2012 to 2016. Result show that the number of board of directors and proportion of independent commissioners in company has a negative relationship to the restatement, but is not significant. The frequency of audit committee meetings has a positive and significant relationship, but is not in accordance with the research hypothesis.

Financial Restatement Affecting Factors Analysis on Indonesia Manufacturing Companies

“…The results of this study are not in line with the results of research by Anggraini and Dianawati (2017) which state that the board of directors has no effect on the company's financial restatement. Anggraini and Dianawati (2017) argue that the board of directors as measured by the size of the board of directors cannot affect the company's financial restatement because the number of boards of directors in the company has a certain scale, it means that the number of boards of directors in the company depends on the company's needs.…”

“…The hypothesis test result stated that independent commissioners don't have significant influence towards a company financial restatement. This research results are in line with the five previous researches which were Siregar and Rahayu (2018), Butar (2018), Anggraini and Dianawati (2017), Hasnan and Hussain (2015), also Kusumo and Meiranto (2014) which stated that independent commissioners don't have significance towards financial restatement. The hypothesis test result stated that independent commissioners don't have significance towards financial restatement of a company due to the presence of independent commissioners doesn't guarantee any improvement of supervision towards company director and management.…”

“…Therefore, routine board of directors meetings could increase company performance and increase the effectivity of directors' supervisory function towards the company management who compile the financial statements, so that financial restatement practices due to misstatement or fraud can be minimized (Schwartz-Ziv and Weisbach, 2013). With a more effective board of directors in a company, less possibility of a financial restatement would occur (Anggraini and Dianawati, 2017). H1c : Board of directors has a negative effect on financial restatement.…”

“…Financial restatement could be done to increase the integrity of financial information or due to an obligation of the company to apply accounting changes required by the standard. On the other side, financial restatement also allows the managers the opportunity to manipulate accounting data so that they could use the complexity of the restatement to remove any trace of profit management (Anggraini and Dianawati, 2017). As a result, financial restatement is considered as a mirror of credibility of bad companies and the existence of bad quality financial statements.…”