The role of moderating audit quality relationship between corporate characteristics and financial distress in the Indonesian mining sector
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Received February 7, 2020;Accepted May 5, 2020;Published May 18, 2020
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Author(s)Link to ORCID Index: https://orcid.org/0000-0002-0221-3910Link to ORCID Index: https://orcid.org/0000-0001-8715-4659
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DOIhttp://dx.doi.org/10.21511/imfi.17(2).2020.08
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Article InfoVolume 17 2020, Issue #2, pp. 88-100
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Cited by4 articlesJournal title: Journal of Governance and RegulationArticle title: The effect of audit team and audit committee performance on the quality of auditDOI: 10.22495/jgrv13i2art5Volume: 13 / Issue: 2 / First page: 59 / Year: 2024Contributors: Hakeem Hammood Flayyih, Hala Ayyed Hadi, Ghazwan Ayad Khalid Al-Shiblawi, Wided KhiariJournal title: International Journal of Finance & Banking Studies (2147-4486)Article title: The Controlling of Ownership on the relationship between Financial Performance and Capital Structure in IndonesiaDOI: 10.20525/ijfbs.v9i3.780Volume: 9 / Issue: 3 / First page: 15 / Year: 2020Contributors: Nicko Albart, Bonar Marulitua Sinaga, Perdana Wahyu Santosa, Trias AndatiJournal title: Business: Theory and PracticeArticle title: MODERATING ROLE OF AUDIT QUALITY AND FIRM SIZE ON PRETAX PROFIT MARGIN AND RELATED PARTY TRANSACTIONS: EVIDENCE FROM INDONESIADOI: 10.3846/btp.2023.17946Volume: 24 / Issue: 1 / First page: 291 / Year: 2023Contributors: Perdana Wahyu Santosa, Sovi Ismawati Rahayu, Zainal Zawir Simon, Pramesti Wulandari SantosoJournal title: Revista de Gestão e Secretariado (Management and Administrative Professional Review)Article title: Financial distress e governança corporativa: um estudo no mercado de capitais brasileiroDOI: 10.7769/gesec.v14i11.3172Volume: 14 / Issue: 11 / First page: 20158 / Year: 2023Contributors: Renato Ribeiro Dos Santos, Fernanda Maciel Peixoto
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Financial performance and corporate governance play an important role in financial distress in the mining sector, which is one of the most significant contributors to the Indonesian economy. This study aims to analyze the effect of corporate characteristics on financial distress (FD), which is moderated by corporate governance (audit quality), and uses the controlling variables (inflation rate and GDP). The study uses data from audited financial statements from mining sector in the Indonesia Stock Exchange for the period 2013–2018. Since the dependent variable (FD) is dichotomous, this study used a binary logistic regression model, as it is the case in many studies regarding the probability of bankruptcy filing. In line with the current study and some previous studies, leverage, efficiency (activity), market-to-book value, audit quality, and GDP affect the probability of financial distress significantly. Only liquidity and inflation do not impact FD. Besides, the moderating audit quality weakens the effect of liquidity and PBV; otherwise, it strengthens leverage and efficiency in predicting financial distress. As for managerial implications, this study concludes that corporate performance, corporate governance, and macro-risk factors affect the probability of financial distress. The authors suggest that mining firms need to pay attention to corporate governance and should watch the economic condition for business sustainability.
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JEL Classification (Paper profile tab)G30, G32, G33
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References51
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Tables4
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Figures0
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- Table 1. Description of variables
- Table 2. Descriptive statistics
- Table 3. Correlation analysis
- Table 4. Logistic regression results
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Conceptualization
Perdana Wahyu Santosa, Martua Eliakim Tambunan
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Formal Analysis
Perdana Wahyu Santosa, Eva Rohima Kumullah
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Funding acquisition
Perdana Wahyu Santosa, Martua Eliakim Tambunan
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Methodology
Perdana Wahyu Santosa, Martua Eliakim Tambunan, Eva Rohima Kumullah
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Resources
Perdana Wahyu Santosa, Martua Eliakim Tambunan
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Supervision
Perdana Wahyu Santosa, Martua Eliakim Tambunan
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Writing – original draft
Perdana Wahyu Santosa, Martua Eliakim Tambunan
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Writing – review & editing
Perdana Wahyu Santosa
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Validation
Martua Eliakim Tambunan, Eva Rohima Kumullah
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Data curation
Eva Rohima Kumullah
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Investigation
Eva Rohima Kumullah
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Software
Eva Rohima Kumullah
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Conceptualization
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Does board composition have an impact on CSR reporting?
Problems and Perspectives in Management Volume 15, 2017 Issue #2 pp. 19-35 Views: 4455 Downloads: 1718 TO CITE АНОТАЦІЯCorporate social responsibility (CSR) reporting plays a key role in management control, particularly in light of the increased demand for non-financial reporting after the financial crisis of 2008–2009. This literature review evaluates 47 empirical studies that concentrate on the influence of several board composition variables on the quantity and quality of CSR reporting. The author briefly introduces the research framework that underpins current empirical studies in this field. This is followed by a discussion of the main variables of board composition: (1) committees (audit and CSR committees), (2) board independence, (3) board expertise, (4) CEO duality, (5) board diversity (gender and foreign diversity), (6) board activity, and (7) board size. The author, then, summarizes the key findings, discusses the limitations of the existing research and offers useful recommendations for researchers, firm practice and regulators.
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The impact of key audit matter (KAM) disclosure in audit reports on stakeholders’ reactions: a literature review
Problems and Perspectives in Management Volume 17, 2019 Issue #3 pp. 323-341 Views: 4454 Downloads: 1852 TO CITE АНОТАЦІЯThis article presents a literature review of 49 empirical studies on key audit matter (KAM) disclosure in audit reports. The study involves a structured literature review on KAM disclosure based on the reactions of stakeholders. The limitations of former studies and useful recommendations for research are stressed. Five major streams of empirical research that analyze the impact of KAM disclosure on stakeholders’ reactions are focused: (1) shareholders (e.g. investors’ perceptions of auditors’ responsibility and litigation, value relevance and investors’ decisions); (2) debtholders (e.g. loan contracting terms); (3) external auditors (e.g. audit processes and audit fees); (4) boards of directors (e.g. earnings management); and (5) other stakeholders (e.g. informational value for suppliers and customers). The authors stress that most of the included studies use experimental or archival data and analyze the impact of KAM disclosure on investor reactions in a US-American setting. As the international standard setters assume a positive impact of KAM on stakeholder reactions, mixed empirical results are found. Although there are some indications of decreased earnings management behavior, most studies find no significant changes in auditor behavior. Furthermore, there are many insignificant results with regard to shareholders’ reaction in line with our stakeholder and behavioral agency framework. The literature review is especially useful for management decisions, because firm reputation may be positively or negatively influenced by KAM regulations.
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Corporate governance and financial performance: an empirical analysis of selected multinational firms in Nigeria
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