Corporate Governance mechanisms are believed to have strong impact on the companies ' performance. The implementation o f Corporate Governance in one company might be different to the implementation o f Corporate Governance in other company due to the characteristics o f the company. This study examines the difference o f Corporate Governance mechanisms in financially distressed firms and non financially distressedfirms. Corporate Governance mechanisms examined in this study are board size, independency o f board, institutional ownership and director ownership. The result o f this study shows that board size has a significant negative impact on the probability o f firm experienced financial distressed after controlling fo r firms asset and leverage. This result is also confirmed by test using lag one year. This study fails to document the evidence o f the relationship o f board independency and ownership structure with the probability o f firm experienced financial distressed.
PurposeThis study aims to analyze the effect of audit findings and audit recommendations follow-up on the quality of financial reports and the quality of public services in the context of applying accrual accounting systems to local government in Indonesia. This study also examines whether the quality of the financial report affects the quality of public services.Design/methodology/approachThis study employed cross-sectional regression using data from 1,437 observations from 491 districts/cities for 2014–2016. The data illustrates the conditions prior to the adoption of the accrual accounting system (2014), the initial year of application/transition period (2015) and the second year of the expected accrual accounting system (2016).FindingsThe results of the study indicate that, in general, the quality of financial reports affects the quality of public services. Regarding the implementation of audits in the public sector, it is also found that audit findings have a negative impact on the quality of financial report and the quality of public services, while audit recommendations follow-up plays a positive role in improving the quality of financial report and the quality of public services.Research limitations/implicationsThe implication of the results of this study is closely related to the efforts to realize the ultimate goal of the recent government reforms. In order to increase the quality of public services in the era of higher report requirements through an accrual accounting system, the government should focus on the quality of financial reports, audit findings and the audit recommendations follow-up.Originality/valueThis study provides new insight on the link between the public sector auditing and the quality of accounting in accrual implementation context and the quality of public services.
This study aims to examine a contingent factor of business strategy decisions, namely environmental uncertainty. The study applies secondary data as an alternative method to analyze technological uncertainty: a component of environmental uncertainty. To examine environmental uncertainty, this study develops an Environmental Uncertainty Index (EUI). Utilizing a sample of manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period from 2009 to 2012 and a multinomial logistic regression, this study finds that the probability of a company pursuing a prospector strategy is greater than an analyzer strategy. Notwithstanding, the study fails to prove that the probability of a company opting for a defender strategy is greater than an analyzer approach. The findings suggest that the new measure of technological uncertainty is more applicable than the other existing measures. Furthermore, EUI measures the environmental uncertainty objectively, therefore, this new measure could be applied to future research. In general, this study broadens understanding concerning the relationship between business strategy and its contingent factors, namely environmental uncertainty. KeywordsBusiness strategy, contingent factor, environmental uncertainty, Indonesia. AbstractThis study aims to examine a contingent factor of business strategy decisions, namely environmental uncertainty. The study applies secondary data as an alternative method to analyze technological uncertainty: a component of environmental uncertainty. To examine environmental uncertainty, this study develops an Environmental Uncertainty Index (EUI). Utilizing a sample of manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the period from 2009 to 2012 and a multinomial logistic regression, this study finds that the probability of a company pursuing a prospector strategy is greater than an analyzer strategy. Notwithstanding, the study fails to prove that the probability of a company opting for a defender strategy is greater than an analyzer approach. The findings suggest that the new measure of technological uncertainty is more applicable than the other existing measures. Furthermore, EUI measures the environmental uncertainty objectively, therefore, this new measure could be applied to future research. In general, this study broadens understanding concerning the relationship between business strategy and its contingent factors, namely environmental uncertainty.JEL Classification: L10, L20, M14.
This study aimed to analyze the board of directors’ commitment to the Sustainable Development Goals (SDGs) by looking at the influence of the characteristics and activities of the board of directors and the existence of Corporate Social Responsibility (CSR) committees on disclosures regarding the SDGs. The directors’ characteristics that were analyzed in this research included the board size, the proportion of independent directors, the presence of female directors, and the presence of foreign directors. The activities analyzed included the number of board meetings held in one year and the percentage of directors in meetings. The context of this study was companies in five Southeast Asian countries—Indonesia, Malaysia, Singapore, Thailand, and the Philippines—during the 2016 and 2017 reporting years. This study was an initial research work aiming to empirically examine the effect of the board of directors on SDG disclosures in public companies from five countries in Southeast Asia. The study shows that the percentage of attendance of board directors’ meetings and the existence of CSR committees positively affected SDG disclosures. It also indicates that the presence of the board at the meeting can encourage more intensive SDG disclosures. Companies with a high commitment to sustainability, as shown by their forming of CSR committees, also tended to have a higher level of SDG disclosures.
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