Journal of Accounting Science

The Impact of Digital Integrated Reporting on the Influence of Financial Performance on Firm Value

Endra Wahyu Ningdiyah — 2024-07-22

General Background: The increasing complexity of global financial markets necessitates enhanced transparency and comprehensive reporting, leading to the adoption of digital integrated reporting (DIR) as a framework to provide stakeholders with concise, strategic insights into company performance. Specific Background: In Indonesia, the integration of DIR into financial reporting practices has become crucial, particularly for firms within the LQ-45 index on the Indonesia Stock Exchange, which are considered leaders in corporate governance and reporting standards. Knowledge Gap: Despite DIR's recognized importance, its moderating role in enhancing the relationship between financial performance metrics—Return on Assets (ROA), Current Ratio (CR), and Debt to Equity Ratio (DER)—and firm value remains underexplored. Aims: This study aims to evaluate the effect of ROA, CR, and DER on firm value, considering DIR as a moderating factor, within Indonesian LQ-45 companies during 2019–2021. Results: The findings reveal that ROA and DER significantly impact firm value, while DIR positively moderates the effects of ROA and DER on firm value. Novelty: This research uniquely identifies DIR's moderating influence, offering a fresh perspective on how digital reporting mechanisms can enhance the predictive power of traditional financial metrics. Implications: The study underscores the strategic importance of DIR in corporate reporting, suggesting that enhanced disclosure can lead to increased investor confidence and potentially higher firm valuation, thereby informing policy and practice in corporate governance and financial reporting.

Non-Performing Loans and Operating Expenses Impact on Capital Adequacy Ratio

Soffia Pudji Estiasih — 2024-07-30

General Background: Banks are pivotal to economic development, serving as financial intermediaries that facilitate capital flow between savers and borrowers. Their financial health is often assessed using ratios like the Capital Adequacy Ratio (CAR), Non-Performing Loans (NPL), and Operating Expenses to Operating Income (OEOI). Specific Background: The CAR indicates a bank's ability to withstand potential losses, making it a critical measure of financial stability. The relationship between NPL, OEOI, and CAR, with Return on Equity (ROE) as a moderating variable, remains underexplored, particularly in the context of Indonesian commercial banks. Knowledge Gap: Previous studies have inadequately addressed how ROE moderates the effects of NPL and OEOI on CAR. Aims: This study aims to examine the interactions between NPL and OEOI on CAR, moderated by ROE, using data from 30 commercial banks listed on the Indonesian Stock Exchange from 2018 to 2020. Results: The findings reveal that NPL significantly negatively impacts CAR, while OEOI's effect is negative but insignificant. ROE moderates the impact of OEOI on CAR significantly but not NPL. Novelty: This study introduces ROE as a moderating variable, providing a nuanced understanding of its differential effects on CAR in the Indonesian banking sector. Implications: The results offer practical insights for bank management to optimize financial performance and contribute theoretically to the literature on banking stability and profitability. These findings can inform future research and decision-making in the financial industry.

Exploring the Interconnection: Employee Diff, Board Gender Diversity, and Earnings Management

Nadif Ahmad Hasan — 2024-07-24

General Background: The COVID-19 pandemic caused significant economic disruptions, leading to reduced demand and sales across various sectors in Indonesia, including manufacturing. Specific Background: This study focuses on manufacturing companies listed on the Indonesia Stock Exchange from 2020 to 2022 to investigate the impact of employee difference (diff) and board gender diversity on earnings management. Knowledge Gap: Previous research offers conflicting findings on the relationship between board gender diversity and earnings management, necessitating further exploration during the COVID-19 period when layoffs were prevalent. Aims: This study aims to empirically assess how employee diff and board gender diversity influence earnings management, contributing to better decision-making by investors and stakeholders. Results: The findings indicate that employee diff positively affects earnings management, while board gender diversity does not have a significant impact. Novelty: Conducted during the COVID-19 period, this research uniquely considers employee diff as a critical factor in earnings management, reflecting pandemic-related challenges. Implications: Investors and stakeholders should focus on employee diff when analyzing financial statements to avoid misinformed decisions, while also recognizing that board gender diversity may not significantly mitigate earnings management practices

Factor Influencing Sustainability Reporting Assurance: A Study of Indonesian Public Listed Companies

Riescha Utami — 2024-07-24

General Background: In the era of globalization, companies are evaluated not only on their financial performance but also on their social and environmental impact. Specific Background: Sustainability reporting serves as a critical medium for communicating a company's efforts to achieve its sustainability objectives, mitigating its negative impacts on society and the environment, and fostering trust. The Global Reporting Initiative (GRI) is widely regarded as the standard for these reports, enhancing their credibility. Knowledge Gap: While previous studies have largely focused on major multinational companies, there is limited research on the assurance of sustainability reports within the context of developing economies, particularly Indonesia. Aims: This study aims to examine the effects of the sustainability committee, industry type, and awards on sustainability reporting assurance among companies listed on the Indonesia Stock Exchange in 2022. Results: Logistic regression analysis reveals that both sustainability committees and awards positively influence sustainability reporting assurance, whereas industry type shows no significant impact. Novelty: This research fills a gap by analyzing sustainability assurance practices within Indonesia, providing insights into the factors influencing assurance in emerging markets. Implications: The findings suggest that sustainability committees and awards can enhance reporting assurance, thereby boosting stakeholder confidence in corporate sustainability practices. This underscores the importance of establishing effective sustainability governance structures and recognizing exemplary efforts to drive transparency and accountability in sustainability reporting.

Factors That Affect Tax Aggressiveness With Good Corporate Governance as a Moderating Variable

Dian Eka — 2024-07-24

General Background: Taxation plays a crucial role in generating revenue for the Indonesian government, primarily through a self-assessment system that challenges taxpayers to report taxes accurately. Specific Background: However, the tax-to-GDP ratio has consistently fallen short of targets, highlighting the need for enhanced compliance and governance. Knowledge Gap: Previous studies on tax aggressiveness have yielded inconsistent results regarding the effects of managerial character, political connections, and firm size, moderated by corporate governance, on tax strategies. Aims: This study examines the impact of managerial character, political connections, and firm size on tax aggressiveness, with a focus on corporate governance as a moderating factor in manufacturing companies listed on the Indonesia Stock Exchange between 2019-2021. Results: Managerial characteristics and firm size were found to have significant positive effects on tax aggressiveness. However, executive compensation and political connections showed no significant impact. Corporate governance, represented by audit quality, moderated the relationship between managerial characteristics and firm size on tax aggressiveness but did not influence the relationships involving executive compensation and political connections. Novelty: This study uniquely highlights the moderating role of corporate governance in shaping tax strategies in the Indonesian context, providing empirical evidence of its efficacy. Implications: The findings suggest that enhancing audit quality within corporate governance frameworks could mitigate aggressive tax practices, thereby aiding policymakers and stakeholders in developing strategies to improve tax compliance.

Factors Affecting Aggressive Tax Actions with Entity Size Moderated

Sabaruddin Sabaruddin — 2024-07-24

General Background: Aggressive tax actions are methods used by companies to manage tax liabilities, aiming to reduce tax payments while increasing profits. Specific Background: Within the context of Indonesian coal mining companies, these actions have significant implications due to the sector's contribution to state revenues. Knowledge Gap: Despite existing studies, the role of entity size as a moderating factor in the relationship between liquidity, profitability, leverage, and tax aggressiveness remains underexplored. Aims: This study examines how liquidity, profitability, and leverage influence tax aggressiveness and assesses the moderating role of entity size. Results: The findings reveal that liquidity and leverage positively affect aggressive tax actions, while profitability has a negative effect. Entity size significantly moderates the influence of profitability and leverage but not liquidity on tax aggressiveness. Novelty: This study introduces entity size as a moderating variable, offering a new perspective on its role in aggressive tax behavior within the coal mining sector. Implications: The results highlight the importance of liquidity and leverage management in tax planning, offering insights for policymakers to curb aggressive tax strategies and for companies to align their practices with regulatory frameworks