The Effects of Earnings Management and Corporate Governance Mechanism on Corporate Social Responsibility Disclosure: An Empirical Study at Public Companies in Indonesia Stock Exchange  

Oleh:

Handajani, Lilik ; Sutrisno ; Chandrarin, Grahita

Jenis: Article from Journal - ilmiah internasional - terdaftar di DIKTI
Dalam koleksi: The Indonesian Journal of Accounting Research (Jurnal Riset Akuntansi Indonesia) vol. 12 no. 3 (Sep. 2009), page 233-248.
Topik: Corporate Governance Mechanism; Corporate Social Responsibility Disclosure; Earning Management

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: RR17.8 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

The research examines the effect of earnings management and corporate governance mechanism on corporate social responsibility disclosure. The proportion of independent boards of directors, institutional ownership, and audit committee are used as the proxy for corporate governance mechanism. We test our hypothesis on 67 public companies listed in Indonesia Stock Exchange that disclose corporate social responsibility activities for the period of 2005 to 2007. Our empirical tests are consistent with our hypothesis that earnings management and the existence of audit committee are significantly positively associated with corporate social responsibility disclosure even after controlling for firm size and type of industry. This results indicate that corporate social responsibility becomes apart of managerial entrenchment strategy for opportunistic management behaviour to gain stakeholders supports. The existence and expanding role of audit committee which is integrated with corporate action plays an important role in assuring the accountability strategy and the implementation of corporate social responsibility. These findings may be of interest to policy makers. The obligations to disclose corporate social responsibility information also need to be followed by other supporting policies to avoid firms opportunistic behavior. Finally, the findings suggest that integrating corporate governance into corporate social responsibility implementation and reporting need to be improved.

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