Value Relevance of Accounting Information and Corporate Social Responsibility in Indonesia and Singapore

Abstract

Abstract:This study aims to examine the value relevance of accounting information and corporate social responsibility (CSR) for measuring the firm value of companies in Indonesia and Singapore. This study used secondary data in the form of financial statements, annual reports, CSR/ sustainability reports, as well as the company's stock price data. 34 companies were taken as a sample in this study during period 2013-2015. The results show that earnings information was relevant for measuring firm value, both in Indonesia and Singapore. The book value of equity and operating cash flow information was considered relevant in Singapore companies, but in Indonesia, this information was not considered relevant for measuring firm value. CSR information was considered irrelevant in both countries.Keywords: value relevance, earnings, book value of equity, operating cash flow, CSR.Research on the value relevance of accounting information has been widely conducted, but there is no study that compares value relevance of accounting information in Indonesia to other countries. This study was conducted with the aim to analyze value relevance of accounting information in a number of companies in Indonesia and compare with value relevance of accounting information in a number of companies other countries. In addition, this study also examined value relevance of corporate social 9 responsibility information, given that CSR issues are being noticed currently.The relevant information allows investors to measure firm value well so that investors can make informed decisions rationally. Value relevance approach has a view that investors want to make their own predictions about the future return on security; investors collect and process all information to achieve this goal (Scott, 2015: 154). Generally, in decision making, the information first seen by most investors as a consideration is earnings information, since earnings information has the ability to evaluate past events, present events, and predict future events, and to assert expectations that have been created before.In line with changes in economic conditions, there is an issue that value relevance of earnings information is decreasing. Many studies have found that value relevance of earnings information de-JAM 16, 1

Value Relevance of Sustainability Report and Its Impact on Value of Companies

“…Result ofAdjusted This high R2 is also similar toprevious studies examining the topic value relevance on sustainability/ CSR reporting using the [21] model, namely [5] at 67.2 percent, [22] at 87.4 percent, [23] at 96 percent, and [4] at 75.1 percent. The value of the F test model (1) also indicates that the variables BV, EARN, and NEG*EARN can jointly affect firm value with a significant level at the one percent level.…”

“…One of the financial information that is often disclosed by companies is financial information earnings. Information earnings generally empowered by investors in valuing a company because earnings allegedly able to evaluate the company's performance in the past, present, and can also predict the company's future performance [4].…”

Relevansi Nilai Laporan Keberlanjutan Di Indonesia

“…Informasi keuangan yang sering diungkapkan oleh perusahaan salah satunya yaitu informasi earning. Informasi earning umumnya diberdayakan oleh investor dalam menilai suatu perusahaan karena earning diduga mampu mengevalu asi kinerja perusahaan tersebut di masa lalu, saat ini, dan juga dapat memprediksi kinerja masa depan perusahaan (Narullia & Subroto, 2018). Akan tetapi, hanya menggunakan informasi earning tidak cukup bagi investor dalam membuat keputusan investasi di era sekarang.…”

The Value Relevance of Corporate Disclosures: Social Responsibility, Intellectual Capital, Corporate Governance

“…Therefore, the disclosure information is not used by investors in investment decision making. Also, it is expected not relevant information as a source of decision making in investment because of the lack of quality information on social responsibility reported by the company Narullia & Subroto (2018). The legislation regarding corporate social responsibility in Indonesia is inconsistent in the concept as well as has not yet regulated the mechanism for implementing it in practice, and do not regulate clear sanctions (Dewi et al, 2015).…”