THE INFLUENCE OF AUDIT COMMITTEES’ CHARACTERISTICS ON EARNINGS QUALITY: EVIDENCE FROM INDONESIA
Abstract: The objective of
this research is to get empirical evidence audit committees’ characteristics:
financial expertise, number of meetings, audit committees’ sizes that moderate
the effects of unexpected earnings to cumulative abnormal return. This research
also includes independent variables that theoretically influence the relation
of unexpected earnings to cumulative abnormal return such as CEO stock
ownerships, earnings persistence, market beta, percentage of reporting loss and
discretionary accruals. The sample of this research is companies listed in
Indonesia Stock Exchange (IDX) during year 2007 to 2009. This research uses 147
data with 49 companies selected per year. The analysis tools used in this
research is multiple linear regression. The result shows that financial
expertise, number of meetings, audit committees’ sizes and others variables
altogether do not moderate the effects of unexpected earnings to cumulative
abnormal return or earnings quality reported in financial report. It shows that
investors in Indonesia do not consider the characteristics of audit committees
in their investment decision making process and the characteristic of audit committees
itself does not influence the quality of reported earnings.
Keywords: Audit committee’s
characteristics, Audit committees’ expertise, Unexpected Earnings, Cumulative
Abnormal Return
Author: NELLIYANA
Journal Code: jpakuntansigg150022
