Main Article Content
Abstract
This study aims to examine the effect of audit quality, managerial reports and audit committees on financial reports quality in companies listed on the Jakarta Islamic Index (JII) in 2018-2020. This type of research is quantitative with multiple linear regression. The data used is secondary data in the form of consolidated reports. The samples of this study consisted of 36 companies listed on the Jakarta Islamic Index (JII) in 2018-2020. The results of this study indicate that audit quality has a significant positive effect on the financial reporting quality, managerial reports have a significant negative effect on financial reporting quality and audit committee has a positive but not significant effect on financial reporting quality quality.
Keywords
Article Details
Copyright (c) 2022 Zulifa Ivada Asikin, Faris Shalahuddin Zakiy, Wahab Zaenuri, Najim Nur Fauziah
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References
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- Arafat, M. A., Zairy, Z., & Ahmad, K. A. (2018). The role of macroeconomic factors on sukuk market development of Gulf Cooperation Council (GCC) Countries. International Journal of Economic and Financial Issues, 8(3), 333-339.
- Arifin, J. (2016). Corporate governance and intellectual capital on financial performance of bank sector companies: Indonesia stock exchange 2008-2012. Journal of Administrative Sciences and Policy Studies, 4(1), 61-82. https://doi.org/10.15640/jasps.v4n1a4
- Arifin, J. U. (2017). Corporate governance and intellectual capital on firm value of banking sector companies listed at Indonesia Stock Exchange in period 2008-2012. Corporate Governance, 20(1). https://doi.org/10.21776/ub.wacana.2017.020.01.5
- Azhar, G. A., & Islahuddin, I. (2018). The impacts of audit committee size, information asymmetry, operating cash flow and external audit quality on earnings management of manufacturing companies In Indonesia. Jurnal Ilmiah Mahasiswa Ekonomi Akuntansi, 3(4), 616-624.
- Brown-Liburd, H., Wright, A. M., & Zamora, V. L. (2016). Managers' strategic reporting judgments in audit negotiations. Auditing: A Journal of Practice & Theory, 35(1), 47-64. https://doi.org/10.2308/ajpt-51306
- Budiyono, I., & Arum, M. S. D. (2020). Determinants in detecting fraud triangle of financial statements on companies registered in Jakarta Islamic Index (JII) period 2012-2018. Journal of Islamic Accounting and Finance Research, 2(1). https://doi.org/10.21580/jiafr.2020.2.1.4818
- Chandrapala, P. (2013). The value relevance of earnings and book value: The importance of ownership concentration and firm size. Journal of Competitiveness, 5(2), 98-107. https://doi.org/10.7441/joc.2013.02.07
- Djoko, D., & Yanti, L. D. (2019). The influence of company growth, profitability, audit tenure, and size of public accounting firms on the acceptance of going concern audit opinions. eCo-Fin, 1(2), 76-83. https://doi.org/10.32877/ef.v1i2.124
- Furwanti, R., Haryono, S., & Lestari, D. M. (2021). Good corporate governance: does the timeliness of financial reporting has an effect to the investors’ reaction?. Jurnal Bisnis dan Kewirausahaan, 17(1), 11-23. https://dx.doi.org/10.31940/jbk.v17i1.2320
- Hamdani, R., Rahimah, I., & Hafiz, M. S. (2020). Exploring the professionalism and dysfunctional behavior of public accountants on audit quality. Review of Integrative Business and Economics Research, 9, 9-19.
- Hasan, S., Kassim, A. A. M., & Hamid, M. A. A. (2020). The impact of audit quality, audit committee and financial reporting quality: evidence from Malaysia. International Journal of Economics and Financial Issues, 10(5), 272.
- Hermalin, B. E., & Weisbach, M. S. (2012). Information disclosure and corporate governance. The Journal of Finance, 67(1), 195-233. https://doi.org/10.1111/j.1540-6261.2011.01710.x
- Husaeni, U. A. A. (2021). The influence of islamic corporate governance and internal control on indications of fraud in Islamic commercial Banks in Indonesia. IJIBE (International Journal of Islamic Business Ethics), 6(2), 92-103. http://dx.doi.org/10.30659/ijibe.6.2.92-103
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- Kantudu, A. S., & Samaila, I. A. (2015). Board characteristics, independent audit committee and financial reporting quality of oil marketing firms: Evidence from Nigeria. Journal of Finance, Accounting & Management, 6(2).
- Kartika, D., & Pramuka, B. A. (2019). The influence of competency, independency, and professionalism on audit quality. Journal of Accounting and Strategic Finance, 2(2), 157-169. https://doi.org/10.33005/jasf.v2i2.58
- Khoram Abadi, A. C., & Hassan Janani, M. (2013). The role of disclosure quality in financial reporting. European Online Journal of Natural and Social Sciences, 2(3), 439.
- Kim, Y. (2020). Organizational resilience and employee work-role performance after a crisis situation: exploring the effects of organizational resilience on internal crisis communication. Journal of Public Relations Research, 32(1-2), 47-75. https://doi.org/10.1080/1062726X.2020.1765368
- Lee, K., & Menon, R. (2019). The effects of subjectivity on manager and auditor reporting. The Accounting Review, 94(5), 273-295. https://doi.org/10.2308/accr-52316
- Listyaningsih, E., Dewi, R., & Baiti, N. (2018). The effect of good corporate governance on corporate social responsibility disclosure on Jakarta Islamic index. Indonesian Journal of Business and Entrepreneurship (IJBE), 4(3), 273-273. https://doi.org/10.17358/ijbe.4.3.273
- Machdar, N. M., & Nurdiniah, D. (2018). The influence of reputation of public accounting firms on the integrity of financial statements with corporate governance as the moderating variable. Binus Business Review, 9(3), 177-186. https://doi.org/10.21512/bbr.v9i3.4311
- Mahmudi, B., & Nurhayati, E. (2015). The influence of board governance characteristics on intellectual capital performance (empirical study on listed banks in BEI 2008-2012). Review of Integrative Business and Economics Research, 4(1), 417.
- Manurung, D. T., Hardika, A. L., Mulyati, Y., & Saudi, M. H. M. (2018). Workload, tenure auditor and industrial specialization auditors on audit quality with audit committee as moderating. International Journal of Engineering & Technology, 7(4.34), 257-260.
- Mardessi, S. (2021). Audit committee and financial reporting quality: the moderating effect of audit quality. Journal of Financial Crime, 29(1), 368-388. https://doi.org/10.1108/JFC-01-2021-0010
- Mardjono, E. S., & Chen, Y. S. (2020). Earning management and the effect characteristics of audit committee, independent commissioners: Evidence from Indonesia. International Journal of Business and Society, 21(2), 569-587. https://doi.org/10.33736/ijbs.3272.2020
- Meutia, I., & Aryani, D. (2019). Characteristics of the sharia supervisory board and its relevance to Islamic social reporting at Islamic banks in Indonesia. Ekuitas: Jurnal Ekonomi dan Keuangan, 3(1), 130-147. https://doi.org/ 10.24034/j25485024.y2019.v3.i1.4160
- Morris, R. D. (1987). Signalling, agency theory and accounting policy choice. Accounting and Business Research, 18(69), 47-56. https://doi.org/10.1080/00014788.1987.9729347
- Mukhtaruddin, M., Saftiana, Y., & Dwikatama, P. A. (2018). Firm’s characteristics, corporate governance quality and corporate social responsibility disclosure. Sriwijaya International Journal of Dynamic Economics and Business, 2(3), 193-212. https://doi.org/10.29259/sijdeb.v2i3.193-212
- Murwaningsari, E., & Rachmawati, S. (2017). The influence of capital intensity and investment opportunity set toward conservatism with managerial ownership as moderating variable. Journal of Advanced Management Science, 5(6). https://doi.org/ 10.18178/joams.5.6.445-451
- Oktari, V., Mela, N. F., & Zarefar, A. (2018). The influence of good corporate governance on company value in Jakarta Islamic Index Companies. Jurnal Akuntansi Keuangan dan Bisnis, 11(1), 69-78.
- Oktorina, M., & Wedari, L. K. (2015). An empirical investigation on ownership characteristics, activities of the audit committee, and audit fees in companies listed on Indonesia Stock Exchange. Applied Finance and Accounting, 1(1), 20-29.
- Patterson, E. R., Smith, J. R., & Tiras, S. L. (2019). The interrelation between audit quality and managerial reporting choices and its effects on financial reporting quality. Contemporary Accounting Research, 36(3), 1861-1882. https://doi.org/10.1111/1911-3846.12487
- Roszkowska, P. (2021). Fintech in financial reporting and audit for fraud prevention and safeguarding equity investments. Journal of Accounting and Organizational Change, 17(2), 164-196. https://doi.org/10.1108/JAOC-09-2019-0098
- Safitri, A. S., & Bahri, S. (2021). The effect of leverage, audit quality, and earnings management on the integrity of financial statements. International Journal of Educational Research & Social Sciences, 2(6), 1294-1301. https://doi.org/10.51601/ijersc.v2i6.226
- Savira, F., & Yudi S. (2013). Factors Affecting the Quality of Financial Statements. Journal of Chemical Information and Modeling. 01(01), 1689–1699.
- Setiawati, E., Putri, E., & Madyaratri, D. (2021). The effect of workload and auditor specialization on audit quality with audit committee quality as moderating variable. Equilibrium: Jurnal Ilmiah Ekonomi, Manajemen dan Akuntansi, 10(1). http://dx.doi.org/10.35906/je001.v10i1.744
- Sitanggang, S. N., Ikhsan, A., & Nasirwan, N. (2020). Analysis of the influence of managerial ownership, audit quality and audit committee on income management (Study on manufacturing companies in the consumer goods sector listed on the Indonesia Stock Exchange 2014-2018). Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 3(3), 2521-2533. https://doi.org/10.33258/birci.v3i3.1235
- Talpur, S., Lizam, M., & Zabri, S. M. (2018). Do audit committee structure increases influence the level of voluntary corporate governance disclosures?. Property Management, 36(5), 544-561. https://doi.org/10.1108/PM-07-2017-0042
- Widya, K. W. & Yuli, C. S. (2020). Effects of Institutional Ownership, Managerial Ownership, Company Size and Leverage on Financial Statement Integrity. Scientific Journal of Batanghari University Jambi. 20(2), 475.
- Yasser, S., & Soliman, M. (2018). The effect of audit quality on earnings management in developing countries: The case of Egypt. International Research Journal of Applied Finance, 9(4), 216-231.
- Yendrawati, R., & Hidayat, M. F. (2021). Determinants of financial statements integrity. Jurnal Akuntansi dan Auditing Indonesia, 25(2), 115-124. https://doi.org/10.20885/jaai.vol25.i
- Yuniarwati, I., Dewi, S. P., & Lin, C. (2017). Factors that influence tax avoidance in Indonesia stock exchange. Chinese Business Review, 16(10), 510-517. https://doi.org/10.17265/1537-1506/2017.10.005
- Zhou, D., Liang, X., Zhou, Y., & Tang, K. (2020). Does emission trading boost carbon productivity? Evidence from China’s pilot emission trading scheme. International Journal of Environmental Research and Public Health, 17(15), 5522. https://doi.org/10.3390/ijerph17155522
- Zuraida, Z., & Sugianto, S. (2021). CSR Spendings of Indonesia's IPO Prospectuses. Jurnal Keuangan dan Perbankan, 25(2), 415-433. https://doi.org/ 10.26905/jkdp.v25i2.5559
References
Amar, A. B. (2014). The effect of independence audit committee on earnings management: The case in French. International Journal of Academic Research in Accounting, Finance and Management Sciences, 4(1), 96-102.
Arafat, M. A., Zairy, Z., & Ahmad, K. A. (2018). The role of macroeconomic factors on sukuk market development of Gulf Cooperation Council (GCC) Countries. International Journal of Economic and Financial Issues, 8(3), 333-339.
Arifin, J. (2016). Corporate governance and intellectual capital on financial performance of bank sector companies: Indonesia stock exchange 2008-2012. Journal of Administrative Sciences and Policy Studies, 4(1), 61-82. https://doi.org/10.15640/jasps.v4n1a4
Arifin, J. U. (2017). Corporate governance and intellectual capital on firm value of banking sector companies listed at Indonesia Stock Exchange in period 2008-2012. Corporate Governance, 20(1). https://doi.org/10.21776/ub.wacana.2017.020.01.5
Azhar, G. A., & Islahuddin, I. (2018). The impacts of audit committee size, information asymmetry, operating cash flow and external audit quality on earnings management of manufacturing companies In Indonesia. Jurnal Ilmiah Mahasiswa Ekonomi Akuntansi, 3(4), 616-624.
Brown-Liburd, H., Wright, A. M., & Zamora, V. L. (2016). Managers' strategic reporting judgments in audit negotiations. Auditing: A Journal of Practice & Theory, 35(1), 47-64. https://doi.org/10.2308/ajpt-51306
Budiyono, I., & Arum, M. S. D. (2020). Determinants in detecting fraud triangle of financial statements on companies registered in Jakarta Islamic Index (JII) period 2012-2018. Journal of Islamic Accounting and Finance Research, 2(1). https://doi.org/10.21580/jiafr.2020.2.1.4818
Chandrapala, P. (2013). The value relevance of earnings and book value: The importance of ownership concentration and firm size. Journal of Competitiveness, 5(2), 98-107. https://doi.org/10.7441/joc.2013.02.07
Djoko, D., & Yanti, L. D. (2019). The influence of company growth, profitability, audit tenure, and size of public accounting firms on the acceptance of going concern audit opinions. eCo-Fin, 1(2), 76-83. https://doi.org/10.32877/ef.v1i2.124
Furwanti, R., Haryono, S., & Lestari, D. M. (2021). Good corporate governance: does the timeliness of financial reporting has an effect to the investors’ reaction?. Jurnal Bisnis dan Kewirausahaan, 17(1), 11-23. https://dx.doi.org/10.31940/jbk.v17i1.2320
Hamdani, R., Rahimah, I., & Hafiz, M. S. (2020). Exploring the professionalism and dysfunctional behavior of public accountants on audit quality. Review of Integrative Business and Economics Research, 9, 9-19.
Hasan, S., Kassim, A. A. M., & Hamid, M. A. A. (2020). The impact of audit quality, audit committee and financial reporting quality: evidence from Malaysia. International Journal of Economics and Financial Issues, 10(5), 272.
Hermalin, B. E., & Weisbach, M. S. (2012). Information disclosure and corporate governance. The Journal of Finance, 67(1), 195-233. https://doi.org/10.1111/j.1540-6261.2011.01710.x
Husaeni, U. A. A. (2021). The influence of islamic corporate governance and internal control on indications of fraud in Islamic commercial Banks in Indonesia. IJIBE (International Journal of Islamic Business Ethics), 6(2), 92-103. http://dx.doi.org/10.30659/ijibe.6.2.92-103
Idris, M. I., Siam, Y. I. A., & Ahmad, A. L. (2018). The impact of external auditor size on the relationship between audit committee effectiveness and earnings management. Investment Management & Financial Innovations, 15(3), 122. http://dx.doi.org/10.21511/imfi.15(3).2018.10
Irwandi, S. A. (2020). Determinants of financial reporting quality: Evidence from Indonesia. Journal of International Studies, 13(2), 25-33.
Kalbuana, N., & Aryadi, R. C. (2020). The effect of audit quality, tax avoidance, leverage, and presentation of other comprehensive income on firm’s value in Jakarta Islamic index company. Journal of Islamic Economics Perspectives, 2(1), 1-10. https://doi.org/10.35719/jiep.v2i1.29
Kantudu, A. S., & Samaila, I. A. (2015). Board characteristics, independent audit committee and financial reporting quality of oil marketing firms: Evidence from Nigeria. Journal of Finance, Accounting & Management, 6(2).
Kartika, D., & Pramuka, B. A. (2019). The influence of competency, independency, and professionalism on audit quality. Journal of Accounting and Strategic Finance, 2(2), 157-169. https://doi.org/10.33005/jasf.v2i2.58
Khoram Abadi, A. C., & Hassan Janani, M. (2013). The role of disclosure quality in financial reporting. European Online Journal of Natural and Social Sciences, 2(3), 439.
Kim, Y. (2020). Organizational resilience and employee work-role performance after a crisis situation: exploring the effects of organizational resilience on internal crisis communication. Journal of Public Relations Research, 32(1-2), 47-75. https://doi.org/10.1080/1062726X.2020.1765368
Lee, K., & Menon, R. (2019). The effects of subjectivity on manager and auditor reporting. The Accounting Review, 94(5), 273-295. https://doi.org/10.2308/accr-52316
Listyaningsih, E., Dewi, R., & Baiti, N. (2018). The effect of good corporate governance on corporate social responsibility disclosure on Jakarta Islamic index. Indonesian Journal of Business and Entrepreneurship (IJBE), 4(3), 273-273. https://doi.org/10.17358/ijbe.4.3.273
Machdar, N. M., & Nurdiniah, D. (2018). The influence of reputation of public accounting firms on the integrity of financial statements with corporate governance as the moderating variable. Binus Business Review, 9(3), 177-186. https://doi.org/10.21512/bbr.v9i3.4311
Mahmudi, B., & Nurhayati, E. (2015). The influence of board governance characteristics on intellectual capital performance (empirical study on listed banks in BEI 2008-2012). Review of Integrative Business and Economics Research, 4(1), 417.
Manurung, D. T., Hardika, A. L., Mulyati, Y., & Saudi, M. H. M. (2018). Workload, tenure auditor and industrial specialization auditors on audit quality with audit committee as moderating. International Journal of Engineering & Technology, 7(4.34), 257-260.
Mardessi, S. (2021). Audit committee and financial reporting quality: the moderating effect of audit quality. Journal of Financial Crime, 29(1), 368-388. https://doi.org/10.1108/JFC-01-2021-0010
Mardjono, E. S., & Chen, Y. S. (2020). Earning management and the effect characteristics of audit committee, independent commissioners: Evidence from Indonesia. International Journal of Business and Society, 21(2), 569-587. https://doi.org/10.33736/ijbs.3272.2020
Meutia, I., & Aryani, D. (2019). Characteristics of the sharia supervisory board and its relevance to Islamic social reporting at Islamic banks in Indonesia. Ekuitas: Jurnal Ekonomi dan Keuangan, 3(1), 130-147. https://doi.org/ 10.24034/j25485024.y2019.v3.i1.4160
Morris, R. D. (1987). Signalling, agency theory and accounting policy choice. Accounting and Business Research, 18(69), 47-56. https://doi.org/10.1080/00014788.1987.9729347
Mukhtaruddin, M., Saftiana, Y., & Dwikatama, P. A. (2018). Firm’s characteristics, corporate governance quality and corporate social responsibility disclosure. Sriwijaya International Journal of Dynamic Economics and Business, 2(3), 193-212. https://doi.org/10.29259/sijdeb.v2i3.193-212
Murwaningsari, E., & Rachmawati, S. (2017). The influence of capital intensity and investment opportunity set toward conservatism with managerial ownership as moderating variable. Journal of Advanced Management Science, 5(6). https://doi.org/ 10.18178/joams.5.6.445-451
Oktari, V., Mela, N. F., & Zarefar, A. (2018). The influence of good corporate governance on company value in Jakarta Islamic Index Companies. Jurnal Akuntansi Keuangan dan Bisnis, 11(1), 69-78.
Oktorina, M., & Wedari, L. K. (2015). An empirical investigation on ownership characteristics, activities of the audit committee, and audit fees in companies listed on Indonesia Stock Exchange. Applied Finance and Accounting, 1(1), 20-29.
Patterson, E. R., Smith, J. R., & Tiras, S. L. (2019). The interrelation between audit quality and managerial reporting choices and its effects on financial reporting quality. Contemporary Accounting Research, 36(3), 1861-1882. https://doi.org/10.1111/1911-3846.12487
Roszkowska, P. (2021). Fintech in financial reporting and audit for fraud prevention and safeguarding equity investments. Journal of Accounting and Organizational Change, 17(2), 164-196. https://doi.org/10.1108/JAOC-09-2019-0098
Safitri, A. S., & Bahri, S. (2021). The effect of leverage, audit quality, and earnings management on the integrity of financial statements. International Journal of Educational Research & Social Sciences, 2(6), 1294-1301. https://doi.org/10.51601/ijersc.v2i6.226
Savira, F., & Yudi S. (2013). Factors Affecting the Quality of Financial Statements. Journal of Chemical Information and Modeling. 01(01), 1689–1699.
Setiawati, E., Putri, E., & Madyaratri, D. (2021). The effect of workload and auditor specialization on audit quality with audit committee quality as moderating variable. Equilibrium: Jurnal Ilmiah Ekonomi, Manajemen dan Akuntansi, 10(1). http://dx.doi.org/10.35906/je001.v10i1.744
Sitanggang, S. N., Ikhsan, A., & Nasirwan, N. (2020). Analysis of the influence of managerial ownership, audit quality and audit committee on income management (Study on manufacturing companies in the consumer goods sector listed on the Indonesia Stock Exchange 2014-2018). Budapest International Research and Critics Institute (BIRCI-Journal): Humanities and Social Sciences, 3(3), 2521-2533. https://doi.org/10.33258/birci.v3i3.1235
Talpur, S., Lizam, M., & Zabri, S. M. (2018). Do audit committee structure increases influence the level of voluntary corporate governance disclosures?. Property Management, 36(5), 544-561. https://doi.org/10.1108/PM-07-2017-0042
Widya, K. W. & Yuli, C. S. (2020). Effects of Institutional Ownership, Managerial Ownership, Company Size and Leverage on Financial Statement Integrity. Scientific Journal of Batanghari University Jambi. 20(2), 475.
Yasser, S., & Soliman, M. (2018). The effect of audit quality on earnings management in developing countries: The case of Egypt. International Research Journal of Applied Finance, 9(4), 216-231.
Yendrawati, R., & Hidayat, M. F. (2021). Determinants of financial statements integrity. Jurnal Akuntansi dan Auditing Indonesia, 25(2), 115-124. https://doi.org/10.20885/jaai.vol25.i
Yuniarwati, I., Dewi, S. P., & Lin, C. (2017). Factors that influence tax avoidance in Indonesia stock exchange. Chinese Business Review, 16(10), 510-517. https://doi.org/10.17265/1537-1506/2017.10.005
Zhou, D., Liang, X., Zhou, Y., & Tang, K. (2020). Does emission trading boost carbon productivity? Evidence from China’s pilot emission trading scheme. International Journal of Environmental Research and Public Health, 17(15), 5522. https://doi.org/10.3390/ijerph17155522
Zuraida, Z., & Sugianto, S. (2021). CSR Spendings of Indonesia's IPO Prospectuses. Jurnal Keuangan dan Perbankan, 25(2), 415-433. https://doi.org/ 10.26905/jkdp.v25i2.5559