Information Asymmetry and Firm Value on Web-Based Integrated Reporting System Quality

Abstract

This study aims to determine the quality of a web-based integrated reporting system in public companies in Indonesia. In addition, it investigates the implications of information asymmetry and firm value on the quality of a web-based integrated reporting system. This study uses content analysis of a company's reporting system, website, stock performance, and financial performance. It selects samples using the purposive sampling technique, with companies that are members of the LQ45 stock index from February to July 2019. This study combines the concept of integrated reporting with internet financial reporting, resulting in a web-based integrated reporting system. It analyzes data using descriptive analysis and differential test analysis. The results show differences in the quality of web-based integrated reporting systems between companies, as measured by firm value. The results did not show any difference in information asymmetry. This study contributes to the knowledge framework of information that needs to be disclosed to the public and utilities that must be available on company websites. By including website quality criteria, it also contributes to other studies on the use of an integrated reporting system.

The Influence of Environmental, Social, and Governance (ESG) Disclosure on Firm Value: An Asymmetric Information Perspective in Indonesian Listed Companies

“…The bid-ask spread value can be calculated by taking the difference between the average or the lowest bid price of the stock and the ask price or highest demand for each stock (Salnika et al, 2021;Weli & Betseda, 2021). The stock prices used are those recorded immediately after the publication of the sustainability report, specifically three months (quarterly).…”

“…This approach aims to reflect better the level of information asymmetry resulting from companies' ESG disclosures through market reactions, i.e., stock price fluctuations. Equation ( 2) calculates the level of information asymmetry (Salnika et al, 2021;Weli & Betseda, 2021). It has SPREAD as the difference between the ask and bid prices, i as company, t as reporting period, Ask as the highest asking price of company's shares that occurred in period t, and Bid as the lowest bid price of company shares in period t.…”