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Article
Publication date: 22 February 2013

Ferdinand Siagian, Sylvia V. Siregar and Yan Rahadian

The purpose of this paper is to investigate whether corporate governance practices and the quality of reporting are associated with firm value for public firms in Indonesia.

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Abstract

Purpose

The purpose of this paper is to investigate whether corporate governance practices and the quality of reporting are associated with firm value for public firms in Indonesia.

Design/methodology/approach

The authors hypothesize that there are positive associations between firm value and corporate governance practices and reporting quality. For the authors’ proxies for corporate governance and reporting quality they develop two new indices. First, they develop a corporate governance index (the CGI) to measure corporate governance practices by Indonesian firms. Second, they develop a reporting quality index (the RQI) to measure the firms’ quality of reporting and disclosures. To examine the associations the authors run multivariate regressions of their proxies for firm value on the two indices.

Findings

Consistent with the first hypothesis, the paper finds positive associations between corporate governance and different proxies of firm value. These findings suggest that firms that implement better corporate governance have higher values. Contrary to the second hypothesis, the paper finds negative associations between reporting quality and the proxies for firm value. These findings indicate that lower value firms tend to disclose more information that is consistent with the P3LKE than higher value firms.

Research limitations/implications

The results suggest that corporate governance practice by Indonesian public firms is value relevant and therefore, should provide incentives to the firms to improve their governance. This shows that the Indonesian government's efforts to promote corporate governance provide benefits to publicly traded firms. The results also indicate that firms with low values are more likely to disclose information that is consistent with the P3LKE. This warrants further research because this finding is inconsistent with the contention that more disclosures should result in higher value.

Practical implications

The authority needs to put more efforts in promoting good corporate governance implementations and making sure that public firms improve their disclosures and reporting quality in order to provide benefits to the users of financial information.

Originality/value

Corporate governance index for public firms is not readily available in Indonesia. Therefore, the authors develop an index to measure corporate governance implementations by Indonesian public firms. To the authors’ knowledge, this is the first paper that develops an index to measure adherence to the P3LKE, which is a comprehensive measure of the quality of reporting.

Details

Journal of Accounting in Emerging Economies, vol. 3 no. 1
Type: Research Article
ISSN: 2042-1168

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Article
Publication date: 5 March 2018

Refandi Budi Deswanto and Sylvia Veronica Siregar

This study aims to investigate both the direct and indirect associations of environmental disclosures with financial performance, environmental performance and firm value.

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Abstract

Purpose

This study aims to investigate both the direct and indirect associations of environmental disclosures with financial performance, environmental performance and firm value.

Design/methodology/approach

The samples are companies listed on the Indonesia Stock Exchange in the agriculture industry, mining industry, basic industry and chemicals, miscellaneous industry and consumer goods industry and that are participating in the Performance Rating Assessment Program on Environment Management (PROPER/Program Penilaian Peringkat Kinerja Perusahaan) of the Ministry of the Environment Republic of Indonesia or have been awarded the Green Industry Award by the Ministry of Industry Republic of Indonesia in 2012-2014. Data are collected from sustainability reports, annual reports and annual financial statements. The authors used simultaneous equation modeling and panel data regression analysis to analyze the data.

Findings

The authors find that the financial performance does not affect the environmental disclosures. The lagged environmental performance has a positive effect on the current environmental disclosures, and environmental disclosures do not affect the firm market value and do not mediate the effect of financial performance and environmental performance on firm value.

Originality/value

This study comprehensively examines both direct and indirect associations of environmental disclosures with financial performance, environmental performance and firm value, which is rarely examined in extant studies.

Details

Social Responsibility Journal, vol. 14 no. 1
Type: Research Article
ISSN: 1747-1117

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Article
Publication date: 29 January 2020

Rini Kumala and Sylvia Veronica Siregar

This paper aims to examine the association of corporate social responsibility (CSR), family ownership and earnings management.

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Abstract

Purpose

This paper aims to examine the association of corporate social responsibility (CSR), family ownership and earnings management.

Design/methodology/approach

The authors specifically examine mining companies listed in Indonesia Stock Exchange during 2012-2014. Total observations are 105 firm-years. Research data are collected from sustainability reports, annual reports and annual financial statements. Data are analysed using panel data regression.

Findings

The evidence suggests a negative association between corporate social responsibility disclosures (CSRDs) and earnings management. The authors also examine the direct and moderating role of family ownership. The authors find a positive association between family ownership and earnings management. In addition, family ownership strengthens the negative association between CSR and earnings management.

Research limitations/implications

This research only examines mining companies listed in Indonesia Stock Exchange, which limit the generalisation of the results.

Practical implications

The results should useful for: investors wishing to use the level of CSRD as an indicator of firm ethics, especially in relation to family-owned firms; capital-market regulators wishing to improve market transparency by introducing requirements to encourage more CSRD; and other users of financial statements, especially financial analysts to consider ownership structure, specifically family ownership.

Originality/value

Previous studies have mainly focussed on companies in the USA. This paper adds to the body of knowledge regarding whether the positive relationship between family ownership and CSR is also present outside the USA, especially in emerging countries. Further, this study examines the effect of family ownership on the association of CSR and earnings management, which rarely examined in previous studies.

Details

Social Responsibility Journal, vol. 17 no. 1
Type: Research Article
ISSN: 1747-1117

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Article
Publication date: 25 April 2022

Widyahayu Warmmeswara Kusumastati, Sylvia Veronica Siregar, Dwi Martani and Desi Adhariani

Diversity in the boardroom is a social factor that spurs public debate in academic and practical arenas. In a two-tier governance system, the question lingers on the impact of…

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Abstract

Purpose

Diversity in the boardroom is a social factor that spurs public debate in academic and practical arenas. In a two-tier governance system, the question lingers on the impact of board of commissioners and board of directors’ diversity on a company’s performance. This study aims to investigate this issue based on a comprehensive set of diversity variables, namely, age, tenure, gender, education level, culture, functional expertise, industry experience, school of origin and “busyness.”

Design/methodology/approach

The authors constructed diversity indices for board of directors and board of commissioners and used multiple linear regressions to test the hypotheses using samples of companies listed on the Indonesian Stock Exchange from 2014 to 2018.

Findings

Board of director (commissioner) diversity has no significant (a positive) impact on corporate performance. However, the latter does not moderate the relationship between board of director diversity and company performance.

Research limitations/implications

Although the theories of human capital and upper echelons are applied here, the results more likely support a contingency argument, as the effect of diversity may vary by company and period, hence leading to offsetting effects. Thus, the impact of diversity on corporate performance might be better observed through in-depth case studies.

Practical implications

The positive impact of the board of commissioners’ diversity on firm performance might indicate the importance of close monitoring by this board. The results further suggest that appointment decisions of directors and commissioners from diverse backgrounds should be based on criteria other than financial performance.

Originality/value

No study has constructed comprehensive diversity indices of the board of commissioners and directors in a two-tier governance context. The study fills this gap.

Details

Team Performance Management: An International Journal, vol. 28 no. 3/4
Type: Research Article
ISSN: 1352-7592

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Article
Publication date: 14 May 2018

Astrid Rudyanto and Sylvia Veronica Siregar

The purpose of this study is to examine the effects of stakeholder pressure and corporate governance on the quality of sustainability report. This study uses environment…

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Abstract

Purpose

The purpose of this study is to examine the effects of stakeholder pressure and corporate governance on the quality of sustainability report. This study uses environment, employee, consumer and shareholder as stakeholders, while board of commissioner effectiveness and family ownership are used as corporate governance components.

Design/methodology/approach

This research uses multiple regression method with total observations of 123 sustainability reports of listed firms on Indonesia Stock Exchange in 2010-2014.

Findings

The result shows that companies which get pressure from environment and consumer have higher quality of sustainability report than other firms. Pressure from employee positively affects the quality of sustainability report. Meanwhile, pressure from shareholders has no effect on the quality of sustainability report. Board of commissioner effectiveness positively affects the quality of sustainability report, and family ownership has no effect on the quality of sustainability report.

Originality/value

This research reveals how various types of stakeholders and corporate governance in Indonesia react to corporate social responsibility and thus influence the quality of sustainability report, which has not been discussed by previous studies.

Details

International Journal of Ethics and Systems, vol. 34 no. 2
Type: Research Article
ISSN: 0828-8666

Keywords

Available. Open Access. Open Access
Article
Publication date: 24 June 2019

Oktavia Oktavia, Sylvia Veronica Siregar, Ratna Wardhani and Ning Rahayu

The purpose of this paper is to examine the effect of financial derivatives usage and country’s tax environment characteristics on the relationship between financial derivatives…

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Abstract

Purpose

The purpose of this paper is to examine the effect of financial derivatives usage and country’s tax environment characteristics on the relationship between financial derivatives and tax avoidance.

Design/methodology/approach

This study uses a cross-country analysis with the scope of ASEAN (Association of Southeast Asian Nations) countries which consists of the Philippines, Indonesia, Malaysia, and Singapore.

Findings

The level of financial derivatives usage positively affects the level of tax avoidance. This finding indicates that financial derivatives can be used as tax avoidance tool. Furthermore, the positive effect of the level of financial derivatives usage on the level of tax avoidance is lower in countries with a competitive tax environment than in countries with an uncompetitive tax environment. This finding indicates that in country with a competitive tax environment, the use of financial derivatives as a tax avoidance tool can be replaced by the tax facilities provided by that country.

Research limitations/implications

This study uses four countries in the Association of Southeast Asian Nations region and does not test the sample based on the financial derivative types.

Practical implications

Tax authorities need to establish a clear tax regulation in regard to the tax treatment of financial derivatives transactions, e.g. define the definition of financial derivatives for hedging purposes and financial derivatives for speculative purposes; and define specific criteria to separate financial derivatives for hedging purposes from financial derivatives for speculative purposes. It is necessary to determine whether losses arising from derivative transactions are classified as deductible expenses or non-deductible expenses.

Originality/value

To the best of the authors’ knowledge, this study is also the first that provide empirical evidence that the relationship between financial derivatives and tax avoidance activities depends on a country’s tax environment.

Details

Asian Journal of Accounting Research, vol. 4 no. 1
Type: Research Article
ISSN: 2443-4175

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Article
Publication date: 18 January 2021

Megawati Oktorina, Sylvia Veronica Siregar, Desi Adhariani and Aria Farah Mita

This study aims to provide empirical evidence on the determinants of voluntary integrated reporting (<IR>) disclosure quality.

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Abstract

Purpose

This study aims to provide empirical evidence on the determinants of voluntary integrated reporting (<IR>) disclosure quality.

Design/methodology/approach

The samples include companies from the Integrated Reporting Examples Database on the International Integrated Reporting Committee’s (IIRC) website, except South Africa and Brazil, where reporting is mandatory. The final sample includes 29 countries, with 148 companies and 592 observations for the study period 2014–2017. Content analysis is used to measure <IR> disclosure quality derived from the <IR> principles and elements published by IIRC (2013). The fraction regression probit model is used to test the proposed hypothesis.

Findings

This study provides empirical evidence that competition from new entrants and country-level accounting competence encourage companies to implement the International Integrated Reporting Framework (IIRF). Signaling theory and diffusion of innovation theory can be used to explain this association. Meanwhile, product market competition of existing rivals has been found to reduce the adoption of the <IR> framework, which is consistent with the proprietary cost theory. Finally, this study finds that company reputation does not affect voluntary <IR> disclosure quality.

Research limitations/implications

This study did not examine the barriers to entry to explain the effect of competition from new entrants as a possible determinant of <IR> disclosure quality. Furthermore, the inclusion of <IR> in the accounting curriculum of universities and certification bodies in certain countries has not been considered as a control variable. The results might also be limited to companies that voluntarily submitted into the Integrated Reporting Examples Database on the IIRC website. All these limitations provide ample avenues for future research.

Practical implications

This research provides implications for governments and standard setters to further sharpen the competence of accountants through memberships in professional accountancy organisations or through training and seminars related to <IR>. The results also suggest that universities should include the topic of <IR> in the accounting program curriculum to increase the understanding of prospective accountants about this reporting regime. The results also show differences on the impact of competition between new entrants and existing rivals on <IR> disclosure quality. This can be used by IIRC or other standard setters to predict the <IR adoption>.

Originality/value

This study uses the diffusion of innovation theory to explain the association between country-level accounting competence and <IR> disclosure quality. Few studies have researched this association. The results show that a country’s accounting competence increases the application of the IIRF in corporate reporting. <IR> has been considered an innovation in corporate reporting and can be implemented by the company if its professional accountants have enough knowledge of this reporting framework.

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Article
Publication date: 4 October 2021

Mohamad Rifai and Sylvia Veronica Siregar

This study aims to examine the effect of the audit committee characteristics on forward-looking disclosure.

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Abstract

Purpose

This study aims to examine the effect of the audit committee characteristics on forward-looking disclosure.

Design/methodology/approach

The characteristics of audit committee that examined are audit committee expertise, audit committee meeting frequency and audit committee size. To measure the extent of forward-looking disclosure, this study did content analysis using a checklist of 22 forward-looking items. The samples of this research are 285 non-financial firms listed on the Indonesia Stock Exchange in the year 2015. Ordinary least square regression is used for hypotheses testing.

Findings

The results of this study show that the audit committee accounting expertise, audit committee financial expertise, the frequency of audit committee meetings and the size of the audit committee have a significant positive effect on the forward-looking disclosure.

Originality/value

To the best of the authors’ knowledge, this is the first study examining the audit committee characteristics on forward-looking disclosure in the context of Indonesia, one of the emerging markets.

Details

Journal of Financial Reporting and Accounting, vol. 19 no. 5
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 22 September 2021

Sylvia Veronica Siregar and Siti Nurwahyuningsih Harahap

The purpose of this study is to examine the effect of business uncertainty on the information technology (IT) governance of listed firms in Indonesia.

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Abstract

Purpose

The purpose of this study is to examine the effect of business uncertainty on the information technology (IT) governance of listed firms in Indonesia.

Design/methodology/approach

The samples are listed firms in Indonesia Stock Exchange for the years 2015–2018. Total observations are 1,215 firm years. The authors used the random effect panel regression to test the hypotheses.

Findings

The authors find that business uncertainty has a significant positive association with IT governance, consistent with the prediction. Companies with higher business uncertainty are in higher demand for implementing IT governance.

Originality/value

The authors have not found previous studies that examine business uncertainty as to the determinant of IT governance. The authors also examined the IT governance in Indonesia, one of the emerging countries. Most previous studies on IT governance were conducted in developed countries, which results may not be generalized to emerging countries.

Details

Journal of Financial Reporting and Accounting, vol. 21 no. 2
Type: Research Article
ISSN: 1985-2517

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Book part
Publication date: 9 June 2020

Sylvia Veronica Siregar, Chaerul Djusman Djakman, Aria Farah Mita and Agustin Setya Ningrum

The purpose of this study is to examine the perception of practitioners, auditors, and academics about important issues on International Financial Reporting Standards (IFRS…

Abstract

The purpose of this study is to examine the perception of practitioners, auditors, and academics about important issues on International Financial Reporting Standards (IFRS) convergence in Indonesia as well as the plan to fully adopt IFRS in Indonesia. Indonesia is one of the emerging countries with distinct features that could shed some lights on IFRS convergence issues. Total respondents of our study are 170 (consist of 43 practitioners, 50 auditors, and 77 academics). The authors find that the respondents are quite familiar with IFRS as well as IFRS convergence in Indonesia. There are several challenges in IFRS convergence in Indonesia, namely complexity to measure fair value, complexity of IFRS-based accounting standards, and tax and accounting standard differences. Regarding the plan to fully adopt IFRS, respondents in average agree that the most significant benefit of IFRS full adoption is IFRS create uniformity in global financial reporting. However, there are several obstacles: lack of education, understanding, and experience by preparers of financial reports with the use of IFRS based, coordination and collaboration among global regulators, and required changes in accounting standards. Majority of respondents do agree that Indonesia fully adopt IFRS, and they stated that it will take at least three to five years for Indonesia to fully adopt IFRS.

Details

Advanced Issues in the Economics of Emerging Markets
Type: Book
ISBN: 978-1-78973-578-9

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