Based on Law of The Republic of Indonesia Number 40 of 2007 Concerning Limited Liability Companies article 1 verse 3, corporate social responsibility is corporate commitment to contribute to economic development, which elevates the quality of life and environment for the company itself, social, and community.According to positive stakeholder relations, CSR can be part of the corporate strategy since it creates value for the stakeholder (Anderson & Bieniaszewska, 2005). Stakeholder theory stated that CSR could be an efficient way of managing the relationship between the company and its stakeholders. Since the stakeholder is a very crucial part of the company, the manager tends to do everything to keep the relationship with the stakeholder (Roberts, 1992).The company must disclose its CSR activity in its annual report (Law of The Republic of Indonesia Number 40 of 2007 concerning Limited Liability Companies article 66). Information disclosure can decrease the level of asymmetric information between investor and manager; consequently, the investor can rely on the manager and is willing to trade with the company, which causes a higher level of liquidity (Verrechia, 2001).On the other hand, disclosure of CSR activity might not be sincere or have the potential to mislead the financial statement users. Managers can strategically use CSR to disguise their opportunistic intention because by doing CSR, managers can secure their job, and then they will gain trust from the stakeholders (Cespa & Cestone, 2007). However, CSR disclosure can be used by the firm to "mask" or cover the inadequate CSR performance (Huang & Watson, 2015). Prior et al. (2008) stated that since management is doing earnings management, the company started to do more CSR to reduce stakeholder's scrutiny and increase company's reputation so that the investor will trust the company more.Regardless the cost and the benefit, several aspects affect the disclosure of CSR activity such as corporate life cycle (Widyasari et al. 2019), earnings management (
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