Factors Affecting the Integrity of Manufacturing Company Financial Statements in Indonesian Stock Exchange and Malaysian Stock Exchange
Syarifah Nurul Fauziah1, Rosinta Ria Panggabean2
1Syarifah Nurul Fauziah, Accounting Department, Faculty of Economics and Communication, Bina Nusantara University, Jakarta, Indonesia.
2Rosinta Ria Panggabean*, Accounting Department, Faculty of Economics and Communication, Bina Nusantara University, Jakarta, Indonesia.
Manuscript received on November 15, 2019. | Revised Manuscript received on November 23, 2019. | Manuscript published on November 30, 2019. | PP: 2252-2259 | Volume-8 Issue-4, November 2019. | Retrieval Number: D7141118419/2019©BEIESP | DOI: 10.35940/ijrte.D7141.118419
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: This study aims to examine the effect of managerial ownership, auditors switching and intellectual capital on the integrity of financial statements with leverage and firm size as control variables. The study employed literature and observation study of the research object to obtain the research data. The research objects are manufacturing companies listed on IDX and MYX within the period of 2014-2017. Research data were analyzed using Eviews software with multiple linear regression analysis method. In this study the t statistical test is used to measure and assess the significance level of each independent variable (managerial ownership, auditor switching and intellectual capital) and control variables (firm size and leverage) on the dependent variable, namely the integrity of financial statements applied in Indonesia and Malaysia. The results showed that in the Indonesian manufacturing companies, managerial ownership, auditors switching and intellectual capital have a positive effect on the integrity of financial statements. Meanwhile, in the Malaysian manufacturing companies, from the three dependent variables used in the study, only managerial ownership has an effect on the integrity of financial statements. With regard to the control variables used, leverage and firm size are equally positive for the integrity of financial statements of companies just in Indonesia. This research is different from the previous study in that the objects of this study are manufacturing companies listed on the Indonesia Stock Exchange (IDX) and Bursa Malaysia (MYX) within the period of 2014-2017, which is a longer period of time. Further, the researchers add independent variables to managerial ownership, auditor switching, and intellectual capital.
Keywords: Integrity of Financial Statements, Managerial Ownership, Auditor Switching, Intellectual Capital, Leverage, Firm Size.
Scope of the Article: Advanced Manufacturing Technologies.