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Abstracts

/Abstracts
Abstracts 2017-08-30T05:19:08+00:00

Juliano Augusto Orsi Araujo (juliano@expresscontabil.com.br), Maísa Souza Ribeiro (maisorib@usp.br)

In this paper, we investigate the bibliographic production on executive compensation and return to shareholder in the Brazilian and international scenarios, to form a theoretical basis for the development of empirical research involving the theme. We chose the research from Jensen and Murphy (1990) as the starting point of the discussions on the subject. The main published studies focus on the North American and British scenarios, especially professors Michael C. Jensen, Harvard University, Kevin M. Murphy, University of Southern California and Martin J. Conyon, University of Pennsylvania. Professor Jensen participated in the study that marked the agency problem discussion (JENSEN; MECKLING, 1976). Murphy conducts research on the theme beginning in the 1980s, on the North American scenario, a period that also marks the beginning of Professor Conyon’s studies, on the British scenario however. The three authors are a reference on the subject and from this highlight, develop studies in other economic scenarios, such as Canada, Germany and most recently China. They also develop the expertise to the development of research comparing the scenarios with each other. We believe that the findings hereby brought contribute to the development of new researches, of empirical nature, especially in countries where the issue is in full development or in areas where emerges the interest in the subject, with the addition of these variables to contribute with the agency problem understanding.

Ignatius Novianto Hariwibowo (novianto_hari@staff.uajy.ac.id)

Abstract This study aims to evaluate the efficiency and effectiveness of the environmental management implementation in the organization. The assessment of efficiency and effectiveness is conducted by comparing the eco-costs as the external costs to the cost that has been allocated from the organization to manage the environment related to ecology. This study took the case in a company that produces sugar. The eco-cost is obtained by the Life Cycle Assessment (LCA) approach which is based on the tables in www.ecocostsvalue.com. Using the approach of Environment Management Accounting (EMA) and the environmental costs from Hansen and Mowen (2000), which are the company’s internal costs, is classified into prevention costs and compensation costs. The results of this study indicate that the eco-costs arising from the activity of sugar production is greater than a prevention costs and compensation costs. This condition shows the hidden costs that have not realized by a company.

Oktavia Oktavia (oktavia@ukrida.ac.id), Sylvia Veronica Siregar (sylvia.vnps@gmail.com), Ratna Wardhani (ratnawardhani@yahoo.com), Ning Rahayu (ning.rahayu@yahoo.com)

Purpose The purpose of this research is to examine company’s characteristics that can affect the effectiveness of ICOFR. Effective ICOFR provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes. Design/methodology/approach Research data were collected from 2007-2012 annual reports and financial statements of 176 firms listed firms in Indonesia Stock Exchange. The data were analyzed using panel regression models. Findings Evidence suggesting that the effectiveness of ICOFR is influenced by company complexity, growth rate, company size, and company age. Complexity and growth rate reduce the effectiveness of the implementation of ICOFR wheres large companies and companies listed longer as public companies tend to have more effective ICOFR. On the other hand, family ownership, audit quality, and firm performance do not affect the effectiveness of ICOFR. Research limitations/implications This research only use disclosures in annual reports to measure ICOFR effectiveness, where in Indonesia it is still not mandatory to disclose internal control weaknesses such as in United States. Primary data (questionnaries and interviews) may also enrich the measurement. Practical implications This paper has the potential to provide inputs for capital market regulator in Indonesia for issuing a policy regarding ICOFR, by considering different firm characteristics will have different impact on ICOFR effectivenes. Originality/value The main contribution of this paper is developiang a tool to measure implementation of internal control based on disclosure in annual reports, which mainly developed by reference to ICOFR framework (COSO, 2006).

Irenius Dwinanto Bimo (irenius.dwinanto@atmajaya.ac.id), Sylvia Veronica Siregar (sylvia.vnps@gmail.com), Ancella Anitawati Hermawan (ancella_hermawan@yahoo.com), Ratna Wardhani (ratnawardhani@yahoo.com)

Purpose The purpose of this research is to examine company’s characteristics that can affect the effectiveness of ICOFR. Effective ICOFR provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes. Design/methodology/approach Research data were collected from 2007-2012 annual reports and financial statements of 176 firms listed firms in Indonesia Stock Exchange. The data were analyzed using panel regression models. Findings Evidence suggesting that the effectiveness of ICOFR is influenced by company complexity, growth rate, company size, and company age. Complexity and growth rate reduce the effectiveness of the implementation of ICOFR wheres large companies and companies listed longer as public companies tend to have more effective ICOFR. On the other hand, family ownership, audit quality, and firm performance do not affect the effectiveness of ICOFR. Research limitations/implications This research only use disclosures in annual reports to measure ICOFR effectiveness, where in Indonesia it is still not mandatory to disclose internal control weaknesses such as in United States. Primary data (questionnaries and interviews) may also enrich the measurement. Practical implications This paper has the potential to provide inputs for capital market regulator in Indonesia for issuing a policy regarding ICOFR, by considering different firm characteristics will have different impact on ICOFR effectivenes. Originality/value The main contribution of this paper is developiang a tool to measure implementation of internal control based on disclosure in annual reports, which mainly developed by reference to ICOFR framework (COSO, 2006).

Nur Hayati Binti Ab Samad (nur.hayati.samad@gmail.com), Noreena Binti Md Yusof (noreena.uitm@gmail.com), Nurfarahin Binti Roslan (nurfarahin1310@gmail.com)

In order to successfully accomplish the social and business mission, social enterprises need to identify the appropriate elements of resources that affect their performance since the management of resources is important to ensure the effectiveness of social enterprise. Thus, this study aims to examine the role of intellectual capital, in terms of human capital, structural capital and relational capital on the effectiveness of social enterprise which is represented by the financial viability. Information on the financial viability and intellectual capital were obtained from the content analysis of the annual reports of 210 social enterprises registered under the Registry of Societies (ROS) in Malaysia for the financial period 2010. The results from the statistical analysis revealed that on average, most of the social enterprises in Malaysia would be able to financially sustain in the future. Based on the multivariate analysis, the results highlighted that human capital has a significant positive influence on the financial viability of social enterprise while structural capital and relational capital do not have significant positive relationship with the financial viability of social enterprise. Overall, the findings conclude that human capital was the most influential factor in enabling the effectiveness of social enterprise.

Muhammad Bagus Rinanda (rinandabagus@gmail.com), Sylvia Veronica Siregar (sylvia.veronica@ui.ac.id)

This study aims to determine the effects of financial reporting quality and government intervention on firms’ investment efficiency in Indonesia. This study adopts 876 firm observations that are listed on the Indonesia Stock Exchange between 2012 and 2014. Results of the assessment reveal that financial reporting quality positively affects underinvestment and overall investment efficiency. Government intervention with a proxy of government ownership percentage does not significantly affect the investment efficiency, however, government intervention with a proxy of political connection significantly and negatively affects the investment efficiency instead. This presumably driven by the high cost of capital due to political connection and pressure from politicians who refused to be blamed for the failure of the firm. An indication is also found that the government intervention measured through political connections negatively moderates the effects of financial reporting quality on the investment efficiency.

Reine Endika Juwita (reineendika@gmail.com), Ancella Anitawati Hermawan (ancella_hermawan@yahoo.com)

The research objective is to examine the role of firm risk-taking on the association between accounting conservatism and firm value. Accounting conservatism is a prudent principle on financial reporting where losses are recognized in a timelier manner than gains. The implementation of accounting conservatism reduces firm’s risk preference to avoid potential losses being reported immediately. Firm risk preference that is reflected on the firm risk is also predicted to have impact on firm value. Therefore, the effect of accounting conservatism on firm value through firm risk is predicted. This research takes 254 companies that are listed in Indonesia’s Stock Exchange (BEI) from 2011 to 2015. The empirical study shows that the accounting conservatism reduces firm risk-taking that in the end increases firm value. This indicates that firms with more conservative financial reporting will tend to take risks more responsibly.

Arief Kurniawan (ariefkurniawan_83@yahoo.com), Ancella Anitawati Hermawan (ancella_hermawan@yahoo.com)

The objective of this research is to examine the effect of earnings management on fraud, which eventually influence the  probability of financial distress. Hypothesis testing is conducted by using logistic regression method using the sample of listed companies in Indonesia Stock Exchange (BEI) from 2009 to 2013. The sample of fraudulent companies are based on the sanction decision of Financial Service Authorities  in 2009 to 2013. The result of this study shows that earnings management increases the probability of fraud action. However, this study does not find that the increase in probability of fraud  will increase the probability of financial distress.

Rangga Handika (rhandikapro@yahoo.com), Rahfiani Khairurizka (rahfiani@gmail.com)

This paper proposes extreme value theory (EVT) Value-at-Risk (VaR) in the Australian interconnected power markets. We develop one-day ahead EVT VaR estimates and perform the backtesting to demonstrate how the EVT VaR improves the performance of standard normal VaR. We document that EVT VaR is superior than normal VaR for all regions and at three different confidence levels. Therefore, we conclude that EVT VaR is more appropriate than the standard normal VaR in the Australian interconnected power markets.

Rangga Handika (rhandikapro@yahoo.com), Oskar Vitriano (oskarvitriano@yahoo.com), Muthia Pramesti (muthia.pramesti@gmail.com)

This paper investigates the risk measure and return impacts of eight financialized commodities. We compare VaR accuracy between unhedged commodity and hedged commodity. Using GARCH(1,1) VaR estimate, we find that hedged commodities have less percentage of VaR violations over unhedged commodities. We also examine how the VaR accuracy affects daily return. We find that the magnitude of VaR accuracy is lower in hedged commodities. Overall, hedging in commodity markets improves VaR accuracy but has lower impact of the return. Therefore, we can conclude that a hedged commodity has better risk measurement and rewards lower return for the accuracy of risk measurement. This is another risk and return postulate in the financialized commodity markets.

Albert A Buntara (albert.buntara@outlook.com), Desi Adhariani (desi.adhariani@ui.ac.id)

This study is aimed at providing empirical evidences on the association between audit tenure and audit quality to support the argument of the enactment of regulation on audit rotation in Indonesia. This study focused on person-to-person relationship; that is the relationship between partners of public auditing firm and client’s firm’s CEO. Using multiple regression on panel data method, the first result revealed the fact that the variable of partner-CEO tenure measured by the years of contract has negative association with audit quality proxied by discretionary accruals. The second result found that the tenure of public auditing firm and client’s firm had no significant impact on companies’ audit quality. The results implies that the regulation of audit partner rotation is needed to maintain a high audit quality.

Indah Permata Sari (indah.permata12@ui.ac.id), Desi Adhariani (desi.adhariani@ui.ac.id)

This study aims at examining the effect of external auditor competence on the earnings management using ownership structure as a moderating variable. Using 204 observations of companies in the manufacturing industry for the period 2011-2013, this study cannot find evidence on the effect of auditor competence. However, this study provides an empirical evidence that the presence of institutional investors helps auditors provide better audit quality due to an effective control performed by the investors. This study shows that users of financial statements should be keen on using information in the financial statements; they should not only pay attention to corporate financial information but also the ownership structure.

Emillia Octavia (emil.octa@yahoo.com), Ancella Anitawati Hermawan (ancella_hermawan@yahoo.com)

This study examines the effect of earnings quality and internal control quality on bond ratings with 118 samples of bond issued by non-financial industry companies listed on Indonesia Stock Exchange and rated by Pefindo from 2013-2016 (308 observations). The earnings quality is measured based on the Kothari et al. (2005) discretionary accruals model and internal control quality is measured based on an index with the assessment of criteria referring to the illustrative tools of COSO (2012). The hypothesis testing is conducted using data panel regression. This study shows that the earnings quality and internal control quality are positively associated with bond ratings. The high quality of earnings and internal control can give a positive signal to the rating agencies, so that the bond ratings will increase as well. Robustness test is also done in this study by using company rating as dependent variable. The results of both hypotheses are consistent with the main model.

Dyah Setyaningrum (dyah.setyaningrum1978@gmail.com), Dwi Martani (martani@ui.ac.id)

The purpose of this study is to analyze the determinants of local governments’ performance in Indonesia. We hypothesize that organizational commitment, management incentives, monitoring, legitimacy and institutional incentives would affect local government performance. Unit of analysis is local governments in Indonesia from 2009-2012. The results show that follow-up of audit recommendation, level of dependency, portion of non-routine expenditures, number of legislative member, number of voters and local government wealth has positive effect on local governments’ performance. Implications of this study are: local governments should increase commitment to follow-up all audit recommendations given by BPK; increase portion of non-routine expenditure and own-source revenue in order to have better performance. Legislative board can support to increase performance by doing effective monitoring.

Dianwicaksih Arieftiara (dianwicaksih@unesa.ac.id), Sidharta Utama (sidharta.utama@ui.ac.id), Ratna Wardhani (ratnawardhani@yahoo.com)

This study aims to examine the contingent factor of business strategy choice decision; that is, environmental uncertainty. This study uses secondary data as an alternative method to analyze the technology uncertainty, one of environmental uncertainty components. To examine the environmental uncertainty, this study developes an environmental uncertainty index (EUI). Using sample of manufacturing companies listed on Indonesia Stock Exchange (IDX) for period 2009 to 2012, and multinomial logistic regression, this study finds that probability companies to choose prospector is greater than that of analyzer; however, it fails to prove that probability companies choosing  defender is greater than that of analyzer. The findings suggest that the new technology uncertainty measure is more applicable and better than other measures, moreover EUI measures the environmental uncertainty objectively, this new measures can be applied on future research. This study increases the understanding of relation between business strategy and its contingent factor, e.g. environmental uncertainty.

Anesella Andyputri (anesella.shara@gmail.com), Aria Farahmita (aria.farahmita@gmail.com)

This research aims to provide empirical evidence about the effect of the convergence of IFRS on foreign ownership in Indonesia. Tests are carried out using models from Hamberg et al. (2013). This study provides empirical evidence that the convergence of IFRS increases the number and percentage of foreign ownership by the countries adopting IFRS in small enterprises in Indonesia. This proves that the convergence of IFRS may have a positive impact on the world of investing in Indonesia especially for investors who come from countries adopting IFRS and the small-scale public companies only.

Daniel Pandapotan (danielpandapotan@gmail.com), Christine Tjen (indivara_devi@yahoo.com)

The implementation of regional autonomy authorizes local governments to manage financial resources their area. Financial resources are realized in the form of fund balance, such as land and building tax. Surabaya Government in 2011 and 2012 was not able to achieve its goals, land and building tax up to 100%. Therefore, this research aimed to describe the tax awareness of the Surabaya citizen located in District Mulyorejo as one of five District which had tax arrears about Rp31 billion. This research used a qualitative research with phenomenology paradigm. Informants in the study were Society in District Mulyorejo who have experience paying tax and meet the criteria abiding taxpayers. All Datas in this study were collected through structured interviews and in-depth to the informants and analyzed by Milles and Huberman analytical technique. The results showed that the informant studies have had awareness of taxation that encourages them to dutifully pay the tax on land and buildings every year although they wanted to know how to calculate taxes. They also suggest the Government should improve their performance regarding to tax collection method, so the Society trust to Government in managing the tax.

Fransiska Natalia Marganda (vanderpotandaniel@gmail.com), Daniel Pandapotan (danielpandapotan12@gmail.com), Abdul Halim (ahali58@ugm.ac.id), Arif Surya Irawan (arief_maykel@yahoo.com) , Sumiyana Sumiyana (sumiyana@fe.ugm.ac.id)

This research aims to (1) analyze the concept of the imposition of Non Tax Revenue on Track Access Charges (NTR on TAC) which is implemented by the Directorate General of Railways (DGR), Ministry of Transportation, (2) evaluate NTR on TAC process held by DGR (3) evaluate the problems found in the realization of the Government Regulation No. 11 of 2015 in the aim of increased NTR on TAC. This research was conducted with a qualitative approach to the type of single case study research. The research data were obtained by preliminary survey, observation research, semi-structured interviews and internal documentation. Data were analyzed with analysis of variances and processed by Milles and Huberman interactive model. The results showed (1) NTR on TAC policy already has liability laws and been implemented with concepts similar to retribution; (2) the process of PNBP TAC consists of planning, implementation and realization. In the planning stage, NTR on TAC was estimated to contribute up to 40.65% of the overall estimate of the Ministry of Transportation non-tax revenues. During the implementation phase, DGR did not prepare SOPs for non-tax policy on TAC’s internal activity. In the realization phase, the realization of NTR on TAC amounted to Rp1.003.665.991.783 or reaching 86.40% of the target, so that DGR was not able to achieve the target; and (3) NTR on TAC policy issues the problem of advance fee IMO cost and there are no clear segregation and classification of assets railway infrastructure between PT KAI with the DGR.

Yusuke Takasu (takasu-yusuke-wk@ynu.ac.jp)

Earnings quality is frequently used as a proxy for information risk in accounting contexts. Following previous literature, we analyse relations between earnings quality and the cost of bank loans in Japan. We hypothesise and test how bank monitoring affects relations between earnings quality and the cost of loans. We find that total earnings quality, innate earnings quality generated from economic fundamentals and discretionary earnings quality driven by managerial discretion over accounting affect the cost of bank loans. We also find that bank monitoring mitigates the effect of discretionary earnings quality on loan pricing. Empirical results support our predictions grounded in information risk and previous banking literature. Introducing bank monitoring into our research confirms and extends previous literature.

Vardhini Vardhini (erikavardhini@yahoo.com), Rosinta Ria Panggabean (Rosinta_Ria_Panggabean@binus.ac.id)

RESEARCH OBJECTIVES of this research are to see the implementation of integrated report on mining companies in Indonesia and how does the International Framework, as the basis presentation of integrated report, giving improvements to the quality of integrated report. RESEARCH METHODOLOGY AND RESEARCH OBJECT is using qualitative method with secondary data. This research uses International Framework consists of 40 indicators from 7 Guiding Principles and 56 indicators from 8 Content Elements as the basis of analysis. There were 39 mining companies listed in Indonesia Stock Exchange. As per June 12, 2015, there was 11 mining companies had issued its annual report period 2014. ANALYSIS used in this research is by comparing each indicator to the content and structure of annual reports. RESULT for this research is that there is only two mining companies in Indonesia can be said has issued annual report in the integrated way based on International Framework. CONCLUSION of this research is that most of mining companies in Indonesia has not implemented yet integrated reporting and International Framework give improvement on information quality in the integrated reporting.

Miftah Ariffianto (tifa7lockhart@gmail.com), Desi Adhariani (desi.adhariani@ui.ac.id)

This study contemplates the impact of the budgetary slack behavior on provincial government’s APBD budget surplus throughout Indonesia. Using data of APBDs of all provincial governments of Indonesia from 2008 to 2012, the results show that self-interest behavior in budget, myopic behavior, and dependency on transfer have their respective impacts on budget surplus. On the other hand, the behavior of deposit utilization for self-interest has an insignificant impact on budget surplus. These behaviors are adjusted by self-interest motivation while avoiding uncertainty and inability to predict future budget. The motive of avoiding the uncertainty and inability to predict future budgets indicates that provincial governments have remained to utilize incremental budgeting methods. This study contributes to the literature of budgeting by investigating the slack behavior using secondary data to objectively investigate and complement findings from primary data usually used in the previous study.   Key words: Budget surplus, Budgetary Slack, APBD, local government, incremental budgeting

Anies Lastiati (lastiatianies@gmail.com), Sylvia Veronica Siregar (sylvia.vnps@gmail.com), Vera Diyanty (veranabila1@gmail.com), Samingun Samingun (sammynungimas@gmail.com)

This study examines the relationship between tax avoidance and the cost of debt capital and the existance of managerial opportunism theory through the moderating effects of corporate governance (family ownership, the ultimate owner, the second largest shareholder, and the effectiveness of board and audit committee) for companies on the Indonesian Stock Exchange between 2008-2012. The results show that tax avoidance has a positive relationship with the cost of debt capital. Furthermore, it is found that concentrated ownership strenghtens the relation between tax avoidance and cost of debt, while the existence of second largest owners weakens the relationship. This study, however, cannot prove that family ownership and the effectiveness of the company’s board commissioners and audit committee gives any impact on the tax avoidance and cost of debt relationship. The study provides a starting point for further research in the monitoring role of company shareholders on its tax compliance. The result of this study provides a better and clearer picture for companies on the consequence of undertaking tax avoidance. This study is the first that probes the role of a firm’s ultimate shareholder and its second largest shareholder on the relationship between tax avoidance and the cost of debt.

Antonius Herusetya (antonius.herusetya@uph.edu)

This study investigates the association of dividend distribution with earnings quality. We use score to construct the quality of dividend distribution from the firms, consisting of dividend-paying status, dividend size, dividend change, dividend initiating, and dividend persistence. Earnings quality are measured by three metrics of earnings management tools, i.e., absolute discretionary accruals, the ratio of the change in accounts receivable to the change in sale, and the ratio of the absolute value of total accruals to the absolute value of cash flow from operations. With the sample of 764 firm-years observations during the period of 2008- 2011 from listed companies in Indonesia Stock Exchange (IDX), as well as using multiple regressions, our study found some evidence that the quality of dividend distribution has negative association to the earnings management. In other words, we find some evidence that the quality of dividend distribution has positive association to the earnings quality.

Hiroshi Uemura (uemura@seiyagroup.com)

Many previous studies related to internal control quality examine the relationship between the quality of internal controls and audit fees, earnings quality and cost of equity, etc., and results suggest that monitoring quality, which is a component of internal controls, has significant consequences for internal control quality. These literatures use corporate governance characteristics (i.e., governance independence and accounting expertise) or internal auditing quality (i.e., auditing experience and internal auditors’ education level) as a proxy of monitoring quality. On the other hand, this study uses Control Self-Assessment (CSA) as a proxy of monitoring quality, and examines the effect of CSA on financial reporting quality using Japanese firm sample. CSA was developed by Gulf Resources Canada, Ltd. in 1987 to conducting internal audits.  This approach is a technique used to review material business objectives, risk involved in achieving the objectives, and internal controls effectiveness, and all related stuffs take part in assessment of internal controls. I find that CSA has a negative relationship with the number of financial restatements and audit fees, and therefore, I conclude that CSA has positive consequences for financial reporting quality.

Daissy Erdianthy (daissyerdianthy@gmail.com), Akhmad Syakhroza (a_syakhroza@yahoo.com), ancella anitawati hermawan (ancella_hermawan@yahoo.com)

The objective of this study are to examine the determinant factors of budgetary slack in Indonesia local governments. The unit of analysis for this study is the regency/city governments in Indonesia, which have complete observable data for the period of 2008 to 2012. Hypothesis  testing are conducted using the logit regression analysis using  122 observations.  The results show that the role of the regional head, internal auditor quality and accountability pressure are the determinants of potential budgetary slack in local governments in Indonesia.

Beatrice Eka Putri Simamora (beatricesimamora@gmail.com), ancella anitawati hermawan (ancella_hermawan@yahoo.com)

The focus of this study are the analysis on the recent trend of transfer pricing disputes on intra-group services transaction in Indonesia and the settlement by the Indonesian Tax Court and/or Supreme Court and the analysis on the influence of latest revision of OECD Transfer Pricing Guidelines to Indonesian transfer pricing climate. This study is based on literature review and specifically refers to the cases uploaded in the Decisions Directory of the Indonesian Supreme Court’s website of which have been decided by the Tax Court and/or Supreme Court within the year of 2013 onwards. The result of this research shows that the correction made by Directorate General of Tax (“DGT”) on intra-group services transaction in Indonesia are mostly because the Taxpayer had lack of supporting evidences to prove the existence issue, benefit issue, and the arm’s length charges. Almost half of the Tax Court’s Decisions were in favor of the Taxpayer with mostly considered that the supporting evidences provided by the Taxpayer before the Tax Appeal process were already considered sufficient and 80% of the Supreme Court’s Decisions maintained the Tax Court’s Decisions. With regard to the OECD’s recently issued transfer pricing guidelines related to intra-group services which discusses the simplified approach for compliance to the arm’s length principle of low value-adding services, due to Indonesia’s specific economic condition, which is below the economic condition of more developed countries where the related party service provider operates, the intra-group services are inclined to be seen to have been arranged with transfer pricing motives.

Raisiffah Kunthi (raissifah@gmail.com), Robert Tobing (robert.tobing16@gmail.com)

The rapid development of science and technologies can enhance competitiveness between companies. Organization need to properly use their knowledge to gain competitive advantage. Organization should implement knowledge management to maximize their knowledge. This study aims to determine the critical success factors of implementation knowledge management in PT XYZ. This research was conducted with a quantitative approach and questionnaire as a research instrument. The data analysis using AMOS 21. The results showed that the factors affecting the implementation of knowledge management are top management support, information technology infrastructure, organizational structure, organizational culture, and human resource. The most significant factors that affecting implementation of knowledge management is top management support.

Hafiz Asfahani (hafiz.asfahani@gmail.com), Elok Tresnaningsih (elok.tres@gmail.com)

This study examines the association of the level of strategic information disclosure and strategic disclosure timing and firm value. The study observed strategic disclosure practices of 236 listed companies in Indonesia Stock Exchange (BEI) in year 2015. The level of strategic information disclosure is measured by Strategic Information Disclosure Scores (SIDS) which comprises of both voluntary and mandatory disclosure as required by regulation in Indonesia.  The result shows that the level of strategic information disclosure has positive association with firm value. The result also shows that  the association of strategic information disclosure and firm value only occurs in companies with shorter disclosure timing. This association is not found In companies with longer disclosure timing. In Summary,  it is important for companies to consider  both, the extent of strategic information disclosure  and disclosure timing in increasing firm value.

Daniel Pandapotan (danielpandapotan12@gmail.com), Christine Tjen (indivara_devi@yahoo.com)

This research is aimed to know how well the owners of SMEs understand about tax liabilities to be borne due to implementation the Government Regulation Number 46 of 2013. This research used qualitative method with Ethnomethodology approach. Informants in this research are business owners in Sentra PKL Gayungan, who have been surveyed by National Tax Census (SPN), involved in the process of business transactions, and have experience interaction in longer period time. All the data were gathered by structured in-depth interviews to informants. All data gathered is analyzed by using Spradley Technique Analysis Model. The results showed that all the informants are not ready to deal with the implementation on the Government Regulation Number 46 of 2013 to SMEs on owners because the majority of owners have not fulfill all of their obligations in taxation yet, due to the limited knowledge possessed by the informants about the taxation.

Ajar Taru Seta (setanasution@gmail.com), Dyah Setyaningrum (dyah.setyaningrum1978@gmail.com)

This study aims to investigate the effects of ownership structure, composition of board of director and commissioner and risk policy committee on risk disclosure. We use 365 samples from Indonesia’s publicly listed company in 2015 and use multiple regression method to test the hypothesis. Using keywords of risk category processed by Atlas.ti, the result shows that the most common form of risk disclosure is risk as an opportunity, followed by risk as threat and risk as uncertainty. This result indicates that publicly listed companies in Indonesia have the tendency to disclose “good” risk information rather than “bad” risk information. Regarding the corporate governance mechanism, the study found that the concentrated ownership has negative effect on risk disclosure, while government ownership, board size and risk policy committee has positive effect risk disclosure. We also found no significant effect of foreign ownership, independency of director and commissioner and gender diversity on risk disclosure.

rustiana rustiana (yohana.rustiana@yahoo.com)

This study aims to investigate the difference of trait professional skepticism auditors between auditors and accounting students. Professional skepticism as an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error orfraud, and a critical assessment of audit evidence. Professional skepticism is one of the essential requirements for the conduct of an audit according to the ISAs (International Standard on Audtitings). A total of two hundred and twenty five completed questionaires from auditors and accounting students were analysed using independent t-test.  To measure the level of professional skepticism was used six dimentions of Skepticism Hurtt’s Scale. The results demonstrated empirically that there was difference trait professional skepticsm between auditors and accounting students This study provides accounting department to design and develop of the accounting curriculum in accordance with the Kerangka Kurikulum Nasional Indonesia.  The findings have important implication on accounting firm in recruiting and training of auditors.

Dodik Siswantoro (dodik.siswantoro@ui.ac.id)

Financial Accounting Standard (FAS) No. 108 on Islamic Insurance which has been effectively applied since 1st January 2010 has received so many responses from related companies. Generally, they have not prepared for the standard.  This is because it needs many efforts on the implementation; for example, the separation of funds between shareholders and clients. The method used is the study of the Gray approach, analysis of the interview results and analysis of non-parametric approach to look at the significance of differences in the conditions of each country of study Gray. This research analyzes some factors on implementing the standard that may have problems. However, the previous standard did not specify in detail for clients’ funds, reserve and income statement. In the case of Islamic insurance, tabarru or premium earned must be able to cover probable claims, this is the basic difference between Islamic and conventional one. Thus, it is quite difficult to be applied. Gray and Islamic approach method describes on these issues and responds.

Megalia Bestari (megalia.bestari@gmail.com), Elvia Rosantina Shauki (elvia.shauki@icloud.com)

This study examines the effect of managerial ability on earning quality which proxied by three factors: earnings restatements, earnings persistence, and accrual quality. This research applies 147 manufacturing firms listed in the Indonesia Stock Exchange resulting consists of 495 observations year (during 2011-2015). Managerial ability is positively associated with earnings persistence and accrual quality. However, managerial ability does not have an influence on restatement. This may due to the fact that restatement in Indonesia was mostly triggered by the adoption of new policy or accounting standards, not by estimation or justification error performed by manager. This study shows that capable managers are more knowleadgeable running their business, this leads to accurate judgment and forecast which impact to higher earning persistence and accrual quality.

Adityawarman Adityawarman (adityadityaw@yahoo.co.id), Tubagus Muhamad Yusuf Khudri (yusufkh@ui.ac.id)

This research aims to examine the impact of Internet Financial Reporting (IFR) practice on companies’ market value in Indonesian Manufacturing companies listed in Indonesian Stock Exchange between the year 2015 and 2016. This research examines how information available on companies’ websites affect firm’s market value based on efficient market hypotheses, agency theory, and signaling theory. Using 79 firms as research sample, this research found an empirical evidence that IFR practices have strong positive relationship on market values over the period of research. Overall, the results indicate that investors value IFR information as a source for making equity pricing decisions. The result has implication for both national regulators and entities about the importance of information openness.

Muhammad Adri Hakim (adrihakim91@gmail.com), Dwi Martani (dwi.martani@gmail.com)

The purpose of this research is to provide empirical evidence about factors that influence the company’s decision to implement PSAK 24 (2013) Employee Benefits in an interim financial report of 2015, the effects for company that implement these standard, and how company disclose information related to the implementation and efect of PSAK 24 in the interim financial report of 2015. This research included companies listed in Indonesia stock exchange by using logistic regression analysis. The result of this research indicate that implementation of PSAK 24 in interim financial report influenced by market capitalization, number of employee, and auditor. This research also provides results in which disclosure of the implementation and effect of most companies have been appliying PSAK 24 in financial interim report of 2015 has been done in accordance with the rules ini PSAK 24.

Ira Geraldina (ira.geraldina@ibs.ac.id), Hilda Rossieta (enjum9@gmail.com), Ratna Wardhani (ratnawardhani@yahoo.com), Fitriany Fitriany (fitri_any@yahoo.com)

The study aims to examine the effect of risk disclosure quality on cost of equity. Using a samples of 397 firm years of companies listed in the Indonesia Stock Exchange during the 2011-2012 periods, empirical evidence of this study confirms the argument which is stated that mandatory risk disclosure quality has negative effect on cost of equity. This result has implication for firms that increasing mandatory risk disclosure quality provides new information that decrease the information asymmetry between firm and investors to trade, decreasing investors’ risk bearing and their expected rate of return, thereby decreasing firms’ cost of equity. This study also contributes to the methodology development by using confirmatory factor analysis to extract two measures of cost of equity into single latent variable score of cost of equity, so simplify to make results analysis and conclusion as well.

Adrianus Hunggara (ahunggara@gmail.com)

This study investigates the effect of undervaluation and cash holdings on likelihood of share repurchase decision using Indonesian listed companies’ data from 2009 – 2015. Contrast to previous studies, this study measures the undervaluation using residual of Ohlson (1995) models based on yearly and panel regression.  The result of this study shows that undervaluation and cash holding increase the likelihood of share repurchase decision. Furthermore, this study also found that cash holding strengthen the effect of undervaluation on likelihood of share repurchase decision. Further research is suggested to avoid direct application of price to book ratio as undervaluation proxy since it has measurement error. Finding of this research can be employed in investment strategies and supportive regulation development.

Yudhistira Dharma Putra (yudhistira.dharma38@gmail.com), Aria Farah Mita (aria.farahmita@gmail.com)

This research aims to give empirical evidence to prove whether the adoption of IFRS affect the relationship between analyst coverage and earnings management. This research includes 4 years period data sample on company in ASEAN 5 countries (Singapore, Malaysia, Philippines, Indonesia and Thailand). The result shows that (1) analyst coverage can curbs earnings management behavior in both types of earnings management. This demonstrates the ability of the analyst in the external mechanisms of corporate governance. (2) IFRS adoption can curbs earnings management through above-the-line items (ALIEM), but had no significant effect on earnings management through below-the-line items (BLIEM). (3) Contrary to expectations, there is no difference in the effect of analyst coverage on both types of earnings management in the period before and after the adoption of IFRS. This may be due to financial analysts have better skills and more resources, when compared to other users in the use of the financial statements. So it may be, without the adoption of IFRS, the analyst can use their analysis capabilities in using and understanding the financial statements.

Aria Farah Mita (aria.farahmita@gmail.com), Sidharta Utama (sidharta.utama@yahoo.com), Fitriany Amarullah (fitri_any@yahoo.com), Etty R. Wulandari (etty.wulandari@gmail.com)

This study aims to examine the indirect effect of the IFRS adoption in increasing the foreign analysts following through the improvement of comparability of financial statements. This study argues that the IFRS adoption, among other factors, could attract more foreign analysts by reducing the information barriers. This study employs listed companies in 17 countries across Europe, Asia, Africa, and Australia with observation period from 2007 to 2012. Unlike previous studies, this study uses a continuous variable to measure the level of IFRS adoption which is measured at country level. This study includes countries that do not fully adopt the IFRS, partially adopt, make some delays in adoption or some modifications to IFRS. The results show that the level of IFRS adoption has positive effect on the comparability of financial statements. The level of IFRS adoption indirectly increases the foreign analysts following through the comparability of financial statements.

Takuma Kochiyama (t.kochiyama@r.hit-u.ac.jp), Ryosuke Nakamura (nakamura@gssm.otsuka.tsukuba.ac.jp)

While prior studies have intensively examined debt covenants in the US firms, it has been argued that the use of covenants varies among countries. Focusing on Japan, this study uses a large-size hand collected sample to explore how and whether debt covenants are used in a bank-oriented country. Specifically, we predict that, in Japanese loan markets, covenants are used as a substitute and/or complementary to the traditional main bank system in terms of monitoring mechanism. Consistent with this prediction, we find that debt covenants are more likely used for firms with lower main bank dependence. We also document that the use of covenants itself does not always lead to better monitoring outcome. Rather, a combination of covenants and main bank monitoring results in conservative earnings that is of benefits of creditors. Overall, our study contributes to literature by providing new insight onto the role, structures, and determinants of debt covenants outside the US.

Pamela Kent (pamela.kent@adelaide.edu.au), Grant Richardson (grant.richardson@adelaide.edu.au), James Routledge (j.routledge@r.hit-u.ac.jp), Divesh Sharma (dsharma2@kennesaw.edu)

We contribute to research and policy making by providing evidence about the relation between auditor-provided non-audit services and audit outcomes across three levels of client-auditor relationships. We exploit an institutional setting where partner identity and auditor-provided non-audit services are reported in the annual report so that economic-bonding between the client and auditor can be identified at the audit engagement partner, office and audit firm levels. We analyze economic bonding at different levels because the extent of economic incentives and client-auditor relations potentially differ across these levels.  Audit outcomes are measured by discretionary accruals, accruals quality and earnings persistence using a sample of firms listed on the Australian Stock Exchange in fiscal years 2007 to 2008. We find evidence that higher client non-audit fees are associated with lower accruals quality at the partner, office and firm level. Higher levels of non-audit service fees are related to less persistence for operating cash flows and accruals at the partner level.

Hiroshi Ohnuma (hiroshi_onuma@rs.tus.ac.jp)

This study examines whether tax avoidance is associated with corporate debt policy. Especially, this study investigates the influence of the bond investors and financial institutions such as the banks, which are long-term loans owner on CG, given for a comprehensive relationship between tax avoidance and debt ratio. Moreover, in the Japanese financial market, the financial institutions have a relatively bigger role for indirect finance, compared with European and U.S. financial market. In addition, in the other Asian nations their financial institutions seem to take on the same responsibility as in Japan. This study firstly investigates the association between debt ratio and corporate tax avoidance. Secondly, we examine the influence of effectiveness of debt governance on the debt ratio and CG. Thirdly, we focus on the representative tools, such as outside directors and auditors for CG and corporate tax avoidance. Finally, we test the influence of the main banks on this effect because, in addition to their monitoring role, main banks also play a significant advisory role and are thus likely to be in a better position to make superior decisions about the firm’s optimal debt and capital structure mix. According to the main result of this study, it seems that debt enhancement effect is more dominant than debt substitution effect in Japanese firms. When a tax avoidance advances, firms’ profitability rises. Thus, considering affordance for loan by the financial institution, they can borrow it more. With regard to interactive effect among corporate governance, debt policy, and tax avoidance, we find CG of firms strengthen when they carry out tax avoidance. Considering increasing outside director ratio, the monitoring function of the debtholders improves due to the enhancement of CG functions and our result suggests that the financial institutions in Japan achieve a monitoring function.

Ratna Wardhani (ratnawardhani@yahoo.com), Anggreani Widiawati (anggreani.widiawati@gmail.com)

This study aims to examine the impact of acquisition and tax avoidance on firm value of acquirer in Asian region. This study also examines the impact of tax avoidance as a moderation variable of cross-border acquisition and firm value. This study uses three measurements of tax avoidance, they are: effective tax rate differences, book tax differences, and residual book tax differences. This research covers 567 cross-border acquisitions by Asian firm in period 2012-2014. This study finds that cross-border acquisition create value destruction on acquirer firm value. This result is consistent with managerialist and hubris hypothesis, explaining that cross-border acquisition creates value destruction on acquirer firm value. It is maybe because overpayment or expropriation by management in acquisition process. This study finds that tax avoidance has a positive effect on firm valuefor firms conducting merger and acquisition. But tax avoidance as a moderation variable has no impact on relationship between cross-border acquisition and firm value.

Ryosuke Fujitani (fujitani.ryosuke.hk@gmail.com)

The purpose of this study is to analyze the real effects of accounting earnings attributes in Japanese financial markets. Previous studies show that useful accounting attributes optimize firm’s investment levels through alleviating asymmetric information. Biddle and Hilary (2006), however, do not find the effects in Japanese economy, and suggest that its reason is the alternative information-problem-mitigating mechanisms. For instance, main bank system can alleviate the effects of accounting information on investment. Nevertheless some researchers indicate that the financial intermediaries might not effective, and its importance shrinks after the 1990’s. Hence, not a trivial question is whether the real effects of EAs are observed in Japanese economy. Using long historical data of Japanese firms, I find that useful accounting information optimizes firm’s investment levels. Specifically, not all but most earnings attributes alleviate over-investment; Earnings volatility, persistence, predictability, accruals quality, and aggregated indicator. Meanwhile, they do not alleviate over/under-investment. In addition, smoothness does not have significant effects or does have the effects opposite from my expectation. In conclusion, the real effects can be observed even in Japanese economy.

Hyonok Kim (hokim@tku.ac.jp), Hironori Fukukawa (h.fukukawa@r.hit-u.ac.jp), James Routledge (j.routledge@r.hit-u.ac.jp)

This paper compares management and auditor going concern risk disclosure. It exploits a unique regulatory change in Japan that impacted the going concern risk disclosure practice. Prior to 2009, managers were directed to make financial statement note disclosure if they considered there was substantial doubt about the going concern status. The note disclosures were required to be audited. After 2009, substantial doubt disclosures by management are not audited and can be considered voluntary. We test whether going concern risk disclosure is enhanced by requiring managers rather than auditors to make the disclosure voluntarily. Analysis shows increased overall levels of going concern risk disclosure after the 2009 regulatory change, which is substantially attributable to voluntary disclosure in the Business Risk Section of annual reports. The results are of interest to regulators because they suggest that it is appropriate for managers to be assigned primary responsibility for going concern risk disclosure.

Nureni Wijayati (n.wijayati@gmail.com), Niels Hermes (c.l.m.hermes@rug.nl), Ronald L. Holzhacker (r.l.holzhacker@rug.nl)

This study aims to investigate the value of political connections during the democratic era in Indonesia. We consider that a substantial change in political and economic framework matters in shedding light the value of political connections. Employing a sample of 356 non-financial institution listed firms in Indonesia for the period 2000 – 2011, we find that the value of political connections shrinks in the democratic era (that is, after 2004) as the performance of firms with politically connected board members is lower than their performance during the pre-democratic era. This outcome suggests that having politically connected board members is less important during a democratic regime. In addition, we also find that affiliated firms which do not have a connected board member, gain benefits from their membership in a big politically connected business group. Overall, our findings suggest that democracy is a moderating factor that drives to be more transparent and fair in managing business transactions.

Etika Karyani (etika.karyani@ibs.ac.id), Etikah Karyani (etika.karyani@ibs.ac.id), Budi Frensidy (frensidy@gmail.com), Setio Anggoro Dewo (dewosa@gmail.com.tx) , Wimboh Santoso (wimboh@gmail.com)

The purpose of this paper is to investigate the effect of risk governance on the operational risk disclosure and bank performance in five Asean countries. The uniqueness of this paper lies in its countries setting. Most studies on governance and performance involve developed countries. Another uniquiness is the construction of risk governance index based on the latest guideline of bank governance. This paper’s contribution is to examine the association of risk governance characteristics for both bank operational risk disclosure and performance in an Asean economy setting. Using 285 bank-year observations comprising hand-collected data for the period 2010-2014, this paper investigates risk governance in terms of index based on management risk structure (board and management level) and practices. Index of risk governance is based on 12 of 13 principles issued by BCBS (2015), while operational risk disclosure is measured by index based on previous research. Bank performances are measured by return on assets (accounting-based) and price earnings ratio (market-based). The results show that there are significant relationships between risk governance and operational risk disclosure and risk governance and bank accounting-based performance. This paper complements the governance literature by incorporating agency, stakeholder, and signaling theory to suggest that risk governance characteristics can be used as channels to improve operational risk disclosure.

Sulistyo Himawan (sulistyo.himawan@griffithuni.edu.au)

Indonesia generally has weak internal control systems (ICS) implementation. This condition was revealed when BPKP conducted diagnostic assessment (DA) in 12 local governments in 2010. The result of this DA then used as dependant variable for logit regression and also as based to select case studies based on the effectiveness of their ICS implementation. The aim of this study is to investigate the critical success factors that determined the effectiveness of ICS implementation in Indonesian local government. Using factor analysis and logit regression from empirical data collected by questionnaire in four selected local governments, the results show that the three most important factors are: ‘independence of the internal audit’, ‘organizational size and structure’ and ‘the performance of audit work’. Principal component analysis revealed that appropriate factor groupings for the 20 CSFs are: top management support, internal audit, and organizational size and structure. These findings should influence local governments and BPKP in developing tools and infrastructure to improve the effectiveness of SPIP implementation in local governments.

Sigit Wahyu Kartiko (gsigit@gmail.com), Hilda Rossieta (hilda.rosieta@ui.ac.id), Dwi Martani (dwimartani@yahoo.com), Trisacti Wahyuni (trisacti_wahyuni@yahoo.com)

This study aims to explore accrual level measurement and to test its associations with fiscal transparency. Performing content analysis and Confirmatory Factor Analysis (CFA) on a sample covering 77 countries from 2008 to 2015, the measurement indicates a relative important and significance of financial performance statements and accrual accounting policies such as non-exchanged and exchanged transactions as accrual level constructor. Conducting panel data regression, we find that accrual level scores meet external validity test that indicated from its positive association with International Budget Initiative’s (IBP) fiscal transparency index.

Rina Indah Sari Ginting (rinaindahsg@gmail.com), Dwi Martani (dwi.martani@gmail.com)

In this paper, we investigate the relationship between tax aggressiveness and financial reporting aggressiveness in Indonesia-listed companies. The sample used in this study were 157 manufacturing and non manufacturing company during 2010-2014 period. Using discretionary permanent differences (DTAX) and abnormal book tax differences (ABTD) as proxies, we find that there is strong positive correlation between tax aggressiveness and financial reporting aggressiveness. This shows that there is no trade off in decisions related to earnings management and tax management. The results also show that ABTD able to measure tax aggressiveness and showed consistent results with  DTAX proxy.

Dwi Martani (dwi.martani@gmail.com), Vinge Gusvrika Erlanda (vingedjalil@gmail.com)

This study analyzes the implications of regulatory revaluation issued in 2015, PMK 233/PMK.03/2015. This study discusses the presentation and disclosure of revaluation of fixed assets in the financial statements and analyze the factors that affect the company’s decision to revalue assets. This study uses companies that have been listed on the Indonesia Stock Exchange in 2015. The results showed 128 companies are do the asset revaluation and the most of them do the revaluation of fixed assets for land and buildings. Companies do the revaluation for accounting purposes are 37.5%. This study proves that the fixed asset intensity and firm size has a significant influence over company’s decision to do the revaluation.

Wan Sallha Yusoff (wansallha@gmail.com)

This study aims to empirically analyse the strengths and weaknesses of Pulic’s proposal and proposes geopolitical benchmark as a new approach to measure the intellectual capital of MNCs. We also investigate the connection between MNCs’ IC and its impact on firm market value and profitability. We focus on MNCs in Malaysia that were active from 2009 to 2013 as an evidence of MNCs from emerging market economies. We classify international segmentation sales based on the multilateral institution of G7, BRICS and ASEAN to capture the geopolitical influence as relationship capital of the companies. Considering the component of multinationality and geopolitical stakes as IC’s relationship capital, the results reveal that intellectual capital have a positive effects on firms’ market value and profitability.  This study suggest that multinationality and institutional geopolitics stakes is better incorporated into the understanding of intellectual capital decisions of MNCs . This study contributes to existing financial literature by providing new insights into the importance of global segmentation location and geopolitical stakes in explaining the component of intellectual capital.

Ningtias Safitri (ningtiassafitri@gmail.com), Dahlia Sari (dahlia-s@ui.ac.id)

The purpose of this study is to examine the effect of financial reporting transparency on tax avoidance, the effect of tax avoidance on firm value, and effect of transparency on relationship between tax avoidance and firm value. The sample of this study consists of 66 manufacture companies that during the period of 2010-2014, with 330 total observations. The empirical results show transparency (earning opacity and audit quality) has the negative effect on tax avoidance but tax avoidance does not affect firm’s value. In the transparent company (earning opacity and audit quality),  tax avoidance will reduce firm’s value.

Jesi Rizky Anindya (jr.anindya30@gmail.com), Desi Adhariani (desi.adhariani@ui.ac.id)

This study aims to determine the fraud risk factors perceived by employees to have the greatest influence to commit fraud and gathering their opinions on the fraud prevention. Fraud risk factors in this study is based on the concept of fraud triangle developed by Donald Cressey, as well as examples of situations written in SAS No. 99. Samples of this study are employees of companies selected using the convenience sampling method. Results from survey to 109 employees showed that all three factors have no significance in affecting employees to commit fraud; however, if compared between factors, the pressure is considered to have the highest impact among other factors. Related to fraud prevention, employee assumes that all prevention tool are very important to be implemented, especially the adequate segregation of duties Type of Paper: Empirical   Keywords: Fraud, fraud risk factors, fraud triangle.

Dyah Setyaningrum (dyah.setyaningrum1978@gmail.com)

The purpose of the study is to develop comprehensive accountability index for Indonesia’s local government and give evidence on the relationship between accountability index and corruption. We use data from Ministry of Internal Affairs’ local government performance report from 2011-2014 and identify several measures from the report that match with accountability criteria. Principle Component analysis is used to reduce twelve variables into three major component of accountability which are: Administrative Accountability, Report Timeliness and Financial Accountability. From those three components, we develop accountability index that represent comprehensive measurement of local government accountability. The result of multiple regression test shows that higher accountability index is associated with lower corruption. The important implication of the study is that local government can measure their level of accountability by using score of Local Government Performance Report they submit annually. The central government can encourage local government to increase accountability especially administrative and financial accountability as it is proved can reduce corruption. The accountability index proposed in this study can be one of the best alternatives of measuring accountability instead of using single measure.

Christina Nainggolan (chrstnainggolan@gmail.com), Dahlia Sari (dahlia-s@ui.ac.id)

Tax avoidance is an issue that exists since taxation regulations are being enforced. UNCTAD forum in 2015 revealed that every year, the developing countries lost more than 100 billion due to tax avoidance practices mostly done by multinational companies. This research will focus on the impact of multinational company characteristics on tax aggressiveness in Indonesia. Those characteristics are identified by the existence of foreign interests (represented by significant foreign ownership and foreign director); international activities (represented by international related party transaction, and multinational operation); and thin capitalization. This quantitative research uses sample of 150 IDX listed companies starting from 2011-2015. This research uses two regression models, where the first regression is done using cross sectional data to gain the residual which indicates tax aggressiveness, while the second regression is done using panel data to find the impact of multinational characteristics on tax aggressiveness. This study finds that the existence of foreign director and international related party transactions bring the positive impact on tax aggressiveness, while the significant foreign ownership brings negative impact on tax aggressiveness. The result of this study is expected to be a reference for the government in enhancing the focus of policies related to tax aggressiveness.

sahar evahdati (ss_vahdati@yahoo.com), Dr Norhayah Binti Zulkifli (norhayah@um.edu.my), Zarina Binti Zakaria (zarinaz@um.edu.my)

There are ambiguities about direct association between corporate social responsibility reporting (CSRR) and market value. The reason might be due to indirectly effected factors on this association. Thus, the current research takes a probable mediator (sustainable customer satisfaction) in the relationship between CSRR and market value. To achieve these, the current research is based on finding from 334 South East Asian manufacturing firms 2007 to 2014 in that the link between CSRR and Firm Performance in Malaysia is a fully mediated and in Singapore is a partially mediated relationship. The positive effect of CSRR on market value is because of the positive effect that CSRR has upon customer satisfaction. The results suggest that CSRR indirectly increases market value through promoting the level of customer satisfaction in South East Asian countries.

Halim Perdana (halimperdanadedy@gmail.com), Putu Aryanti (putu.gian.aryanti@gmail.com), Intiyas Utami (intiyas@staff.uksw.edu)

Directorate General of Customs and Excise (DGCE) has been dealing with fraud issue that has devastating impact while concerning in enhancing the quality of public service. Previous studies have explained that fraud prevention and detection were performed by conducting an effective internal control system. This study aimed to uncover fraud factors and how internal control system strengthen fraud prevention and detection in DGCE. Researcher used qualitative approach that relied on case study as strategy. The data collection method in this study was interview with unstructured questions. The result showed that fraud commited in DGCE took form in corruption scheme, and was perpetrated because of fraud factors: pressure, perceived opportunity, and rationalization. DGCE has been implementing effective internal control system. The fact that fraud was still committed affect by individual intergrity, role of the leader, and organization culture.

Fitria Yuliawati Ansorriyah (fitria.yuliawati@gmail.com), Ning Rahayu (ning.rahayu@yahoo.com)

The upstream oil and gas industry is a capital-intensive and high risk industry. In order to share the risk that occur in managing oil and gas fields, the contractor may transfer some of its participating interest to other parties. In respect of such transactions, the oil and gas contractor shall be obliged to fulfill the tax obligations on a self assessment basis including the obligations that related to the imposition of Branch Profit Tax. To achieve that, one of the supporting factors is the consistency between of regulations governing the imposition of Branch Profit Tax on transfer of participating interest transactions in upstream oil and gas industry. This study discusses the Branch Profit Tax imposition on transfer of participating interest as regulated in Government Regulation Number 79 Year 2010 (GR 79/2010), Minister of Finance Regulation Number 257/PMK.03/2011 (MoF 257/2011), and Letter of Jakarta Khusus Regional Tax Office (RTO) Number S-5996/WPJ.07/2015. This research uses qualitative research approach and data collection technique through literature study and field study by conducting in-depth interview with informants from various relevant stakeholders. The result of the research concludes that the provision of Branch Profit Tax imposition as stipulated in Letter of Jakarta Khusus RTO Number S-5996/WPJ.07/2015 is inconsistent with the provisions set forth in GR 79/2010 and MoF 257/2011 resulting in legal uncertainty. In accordance with the theory and concept of taxation, the imposition of Branch Profit Tax on transaction of transfer of participating interest is reasonable. The official needs to evaluate the regulations related to Branch Profit Tax on transfer of participating interest so that it can provide consistency and legal certainty for all parties, both for the Directorate General of Taxation as fiscus and for the Contractor as a taxpayer, as well as in accordance with the existing theory and concept of taxation.

Aulia Apriliani Suhubdy (auliasuhubdy@gmail.com), ancella anitawati hermawan (ancella_hermawan@yahoo.com)

This research aims to examine the effect of earnings management post conglomerate acquisition to acquirers’ shareholder value. Conglomerate acquisition’s nature to destroy value and increase firm risk would force managers to inflate earnings post acquisition to show better performance. The company was presumed to inflate earnings after acquisition. Managing earnings would affect the short and long term acquisition performance. The hypothesis testing are conducted using multiple regression model with 58 conglomerate acquisition transactions in the United States metals and mining industry during the year 2000 to 2011. The empirical study shows that companies completing conglomerate acquisitions inflate earnings in the four quarters after completion of acquisition. Earnings management significantly brings negative impact towards abnormal return to shareholders.

Dianwicaksih Arieftiara (dianwicaksih@unesa.ac.id), Sidharta Utama (sidharta.utama@ui.ac.id), Ratna Wardhani (ratnawardhani@yahoo.com), Ning Rahayu (ning.rahayu@yahoo.com)

This study aims to examine the contingent fit between business strategy and environmental uncertainty, and its effect on Corporate Tax Avoidance. Using data from Indonesian listed companies for the period from 2009 to 2012, this study finds that under highly uncertain conditions, the probability of companies favoring prospector strategy is higher than the probability of choosing analyzer strategy. The study fails, however, to demonstrate that the probability of a firm choosing the defender strategy is higher than the probability of selecting analyzer strategy. The study also finds that companies inclined to pursue the prospector strategy under highly uncertain conditions (contingent fit between prospector strategy and environmental uncertainty) have a higher level of tax avoidance than that of the analyzer and defender strategies. Moreover, in a highly uncertain environment, the defender strategy precipitates a lower level of tax avoidance than the analyzer strategy. Furthermore, the study also finds that environmental uncertainty has a significant and positive correlation with the level of tax avoidance. Therefore, the findings suggest that a strategy choice that fits with environmental uncertainty could affect the level of corporate tax avoidance.

Indra Himawan Adlan (indra.himawan@ui.ac.id), Christine Tjen (indivara_devi@yahoo.com)

Value Added Tax (VAT) is a tax which is determined by objective laws to which they are levied. In the process of the collection, often based on a difference in the interpretation of legal provisions between the taxpayer and the tax authorities that led to a tax dispute. One example is the imposition of VAT on transaction receipts insurance discounts and sale of repossessed goods at a finance company. In the Tax Court decision and the Supreme Court have been settled from 2009 to 2013 related to two transactions, almost 100% decided to grant the request wholly taxpayer Appeal and furthermore rejected the Reconsideration filed by the Directorate General of Taxation. In this study, will be analyzed matters concerning the consideration of the judge in deciding the case of the VAT on the two matters, namely the receipts of insurance discounts and also the sale of repossessed goods. OJK’s Circular related insurance discounts and management of tax disputes that DGT would do also be analyzed to formulate effective treatment solutions to the recurring disputes. Receipts of insurance discounts in the context of consumer financing and sale of repossessed goods in the context of the leasing are subjected to VAT. OJK’s Circular had no effect on the tax correction for independent tax rules. Several articles in the VAT law and policy rules should also be revised due cause confusion and would need the establishment of new rules specifically for finance company’s intermediary services.

Dyah Raras Danastri (dyahraras@outlook.com), Christine Tjen (indivara_devi@yahoo.com)

This study aims to analyze how fiscal incentive provided by the government to initiate investment will affect company’s earning management. The fiscal incentive used in this study is the corporate tax rate reduction for listed companies based on Government Regulation (GR) No. 81/2007 and GR No. 77/2013. The unbalanced panel data collected consists of 346 listed companies in the period of 2008-2014 excluding companies from financial and mining sectors. Multivariate regression results show that there is no evidence that the tax rate reduction has any impact on company’s earning management.

Yuto Yoshinaga (cd151004@g.hit-u.ac.jp)

This study investigates why aggregate earnings changes have a significantly positive relation with contemporaneous changes in market risk premium focusing on the cyclical trend of aggregate earnings. Prior Macro-Accounting studies only propose their empirical results and do not clarify a reason behind the relation. Since empirical results without background story are difficult to make implications, we aim to propose an explanation of the unrevealed relation. Assuming that aggregate earnings changes represent new information of the time trend deviation from aggregate earnings, we obtain three empirical results which explain the relation. First, aggregate earnings have cyclical trend. If aggregate earnings are larger (smaller) compared with their trend, future earnings will become smaller (larger). Second, such aggregate earnings predict higher (lower) future market volatility and market downside risks. Third, market volatility and market downside risks recognized from the time trend deviation of aggregate earnings are reflected on market risk premium. Our results suggest that the positive relation between aggregate earnings changes and changes in market risk premium comes from the newly recognized risk information in aggregate earnings. Our contribution is to the related Macro-Accounting research stream. First, this is the first study which reveals cyclical trend of aggregate earnings and downside risks in aggregate earnings information as long as we know. Our second contribution is providing a reasonable explanation for the positive relation between aggregate earnings changes and changes in market risk premium, whose mechanism has not been clarified before.

Tri Priyatmo (musttreee@gmail.com), Rusdi Akbar (rusdi.akbar@ugm.ac.id)

Objectives: this research aims at analyzing and exploring the implementation prospect of Activity-Based Costing (ABC) in governmental organizations in Indonesia, both in how to calculate the unit cost of service products, as well as to understand the prospects of ABC from the perspective of management and employees (etic perspective). Design / methodology / approaches: some ABC concept share combined in several literatures and a conceptual framework is developed. This study is a qualitative research with case study approach in one of the government organizations, the State Treasury Office (KPPN) Jakarta IV, a vertical unit of Ministry of Finance. Findings: after finishing the case study, this research managed to determine how to calculate the unit cost of service products in KPPN Jakarta IV and get the conceptual framework which concluded ABC as an analytical tool that has positive outlook. Limitations and implication: case studies on one object research is less general for all government organizations in Indonesia regarding the prospects of ABC. However, it gained a common understanding of ABC positive potential in the future. Originality/value: ABC prospect research on nonprofit governmental organization in Indonesia has just conducted once and has already able to close the gap of absence in literature regarding ABC in Indonesia.

Fernando Africano (Fernandoafricano@stie-mdp.ac.id), Dinnul Alfian Akbar (dinnulalfianakbar_uin@radenfatah.ac.id), Rika Lidyah (rika_lidyah_uin@radenfatah.ac.id)

Disclosure of social responsibility is a matter of responsibility of a company, so it is worth knowing the things that affect the disclosure of corporate social responsibility. This study aims to test the theory related to corporate social responsibility disclosure with empirical facts about disclosure of non-financial corporate social responsibility in Indonesia Stock Exchange. The variables used in this research are financial pressure, firm size, financial performance, violation of financial regulation and environmental impact to corporate social responsibility disclosure. This research uses quantitative method with secondary data. Secondary data in can from the Financial Services Authority and Indonesia Stock Exchange. The test is done by path analysis and processed using SPSS. The results of the study show that financial pressures have an effect on the violation of financial regulation, firm size affect the environmental impact, firm size and environmental impact to disclosure of corporate social responsibility and environmental impacts mediate the influence of firm size on social responsibility disclosure

Siti Nuryanah (siti.nuryanah@ui.ac.id), Muhammad Irham Kurniawan (irhamkurniawan24@gmail.com)

This study aims to examine the effect of corporate tax avoidance to the corporate cash holdings. Recent tax avoidance research found that tax avoidance is able to facilitate managerial rent extraction in the form of transfer of resources owned by the company. This study attempts to test directly how the relationship of tax avoidance with the amount of cash held by the company using a quantitative analysis. The sample collected based on a purposive sampling method consists of 46 non-financial, non-property, non-real estate and non-construction companies with a period of research for eight years, from 2009-2016, with a total 368 observations. The study uses two different cash holdings measures to test the robustness of the research results. This study provides evidence that tax avoidance does not have a significant relationship to the level of cash holdings in companies that go public in Indonesia. Both measurements of cash holdings gave the same conclusions to the results of the study. The findings further confirm that tax avoidance does not have a significant effect on the level of firm cash holdings in Indonesian public companies.

Rahmat Febrianto (febrianto.rahmat@gmail.com), Fitria Dini (fitriadini2904@gmail.com), Dela Audina (delaaudina@gmail.com), Yuskar Yuskar (yuskar_munaf@yahoo.co.id) , Verni Juita (vjuita@gmail.com)

The objective of this research is two fold. First, it test the audit quality of companies that change their auditors, either voluntarily or mandatorily. Indonesia has a regulation, since 2002, that mandates companies to rotate their auditor after six years of consecutive engagements (five years prior to 2008). However, auditors seems to find their own way to deceive the mandatory regulation by a tactic so called pseudo mandatory rotation. We, therefore, divide mandatory rotation into pure and pseudo mandatory rotation. Second, we test the financial characteristics that may be a factor for an accounting firm to engage in such pseudo mandatory rotation. We collect data of rotation since the Ministrial decree became effective in 2003. The results indicate that companies that rotate their auditors mandatorily have higher audit quality than that of voluntarily. We cannot find evidence, however, that pseudo and pure mandatory rotation have different audit quality. The results also indicate that, among other types of switching, switching among bigger accounting firm has the highest audit quality, while switching between smaller ones has the lower audit quality. Lastly, motives for an accounting firm whether to engage in pseudo or pure mandatory rotation are related to the financial size of their clients. Future research must consider the limitation stated in this study.

rousilita suhendah (rousita12@gmail.com)

The purpose of this research is to examine the factors affected corporate investment. The factors  influence the corporate investment is accounting conservatism, leverage, firm size, and liquidity. The sample of this research comprises 173 firm observation in manufacturing firms listed on Indonesian Stock Exchange (IDX) in the period of 2013 – 2015. The independent variable consist of accounting conservatism, leverage, firm size, and liquidity. In further analysis, the author performs multiple regression analysis. Providing some support for agency theory, it is found that liquidity is negative effect on corporate investment.  Further, this study provides evidence that the accounting conservatism and leverage have negative effect on corporate investment. But the firm size doesn’t have effect on corporate investment. This research contributes to the corporate investment literature where in Indonesia such research has not been widely practiced. For investors or principal, this research can be useful to know that there is a conflict between managers (agent) and investors (principal) in terms of determining the firm’s investment activity on fixed assets

siti asiah murni (sitiasiahmurni@gmail.com), james tumewu (jamestumewu@gmail.com), rica sih wuryaningrum (ricapamenan@gmail.com)

Higher Education as one of the educational institutions has a role in producing qualified graduates. Lecturers are the important component in higher education, regardless the quality improvement policy designed, the lecturers are the people who are in charge and responsible in the learning process. The quality of learning process depends on the competence and commitment of the lecturers themselves which reflect their professionalism and the professionalism requires the perfect result, therefore passion of quality improvement is always needed to build it. It requires seriousness and thoroughness of work that can only be obtained through experience and habits. Therefore, this study aims to evaluate the competence of lecturers to improve teaching and learning activities so as to compete in the world of work, especially in the ASEAN economic era. The population of this study is all the students of the Faculty of Economics of Wijaya Kusuma Surabaya University. Sampling technique is used in this research as it is a purposive sampling. The collecting data procedure is using questionnaires. Analytical techniques using factor analysis is used in this study to prove the competence of lecturers affect the teaching and learning process. The results showed that personality factor ranked the first in the factors influencing on learning process, followed by social, professionalism and pedagogic factors. Keywords: lecturers’ competence, professionalism, teaching and learning process.

Makoto Tsukahara (m.tsukahara@main.teikyo-u.ac.jp)

This paper investigates how the “convertibility” of convertible bonds (CBs) affects the credit ratings that Rating and Investment Information Incorporated (R&I) develops and uses in its credit rating process empirically. Under Japanese accounting standards, it is permitted to record as full liabilities without identifying the conversion right of convertible bonds. If there is a high likelihood of conversion of CBs, such accounting may not adequately indicate the economic realities of securities, and users of financial statements may modify the financial figures to interpret them. This paper focuses on credit risk assessment conducted by rating agencies rather than observing the valuation of the securities markets to which major interests have been directed so far. As a result of the verification, it was shown that the fact of stock conversion and its high probability are factors that improve credit risk assessment even if other factors are controlled. The fact that the accounting figures are corrected and interpreted by users of financial statements implies that current account treatment of CBs ​​may not necessarily fully demonstrate information that contributes to decision making efficiently.

Lina Lina (lina.fe@uph.edu)

Performance appraisal as one of the management control system formal factors will be tested its influence on employee outcomes by using work culture which is one of management control system informal factor as a mediating variable. Thus, the purpose of this study is to give the empirical evidence about the influence of performance appraisal on the employee outcomes (employee satisfaction, employee retention, employee performance, and employee commitment) by considering work culture as a mediating variable. This study uses primary data obtained through the distribution of questionnaires to the respondents. Respondents were selected using purposive sampling method with the following criteria: full time or home base lecturers at private universities located in Jakarta, Indonesia. Path analysis was uses to test the hypothesis. This study revealed that performance appraisal has a positive direct influence on employee outcomes. Indonesian lecturers’ outcomes are directly influenced by performance appraisal system without the mediation of work culture of their university. Thus, work culture has not proved as a mediating variable. Hence, the results of this study can be helpful for management of private universities to focus on creating well designed, clear, and transparent performance appraisal system that can be applied properly and uniformly.

Megawati Oktorina (megaoktorina@yahoo.com), Megawati Oktorina (megaoktorina@yahoo.com), Sylvia Veronica Siregar (sylvia.vnps@gmail.com), Ratna Wardhani (ratnawardhani@yahoo.com)

This study aims to examine the persistence and mispricing of industry-wide cash flows, firm-specific cash flows, normal accruals, industry-wide abnormal accruals as well as firm-specific abnormal accruals. The separation of the individual components of these earnings in testing the persistence and mispricing becomes important so that the persistency of earnings components more broadly and comprehensively understood. In addition to that, the behavior of investors perception on the persistence of the earnings components was also studied. Samples were taken from non-financial companies listed on the Indonesia Stock Exchange from 2013 to 2015. The analysis method used for persistence was the ordinary least square regression. The Wald test and Mishkin test were used to test the investors’ ability to distinguish high and low persistence and rational pricing using. The results of this study demonstrate that the industry-wide cash flows are the most persistent compared to other earnings components. The least persistent ones are firm-specific abnormal accruals. Moreover, it turns out the investor able to capture the differences of persistence and tend to overprice (underprice) to the persistence of industry-wide cash flows (firm-specific abnormal accrual). In addition, this study shows that investors underprice (overprice) to the persistence of firm-specific cash flows (normal accruals and industry-wide abnormal accruals). Several research implications for investors are as follows: the quality of earnings that is persistence in pricing and the separation of normal and abnormal accruals into industry-wide and firm-specific, as well as separating the cash flows into industry-wide and firm-specific because these earnings components have different persistence and different priced by investor. Type of Paper: Empirical Keywords: persistence, mispricing, industry-wide abnormal accruals, firm-specific abnormal accruals, industry- wide cash flows, firm-specific cash flows.

Achmad Hizazi (hizazi@gmail.com), Syvia Veronica Siregar (sylvia.vnps@gmail.com), Dwi Martani (dwimartani@gmail.com), Vera Diyanti (veranabila1@gmail.com)

This article try to explore determinants of long term persistence of tax avoidance in country level environment. Thus, we evaluate some factors in firm level and include factors in country level that affect variability of persistence of tax avoidance. Using persistence of tax avoidance data of 739 firms extracted from time-series regressions, we find that total asset and capital intensity have positive effects to persistence of tax avoidance in marginal level while leverage has negative effect to persistence of tax avoidance.  After the inclusion of factors in country level, we find that factors in firm level losing their significances and in the other side whole country level factors have significant effect to persistence of tax avoidance.

Siti Maziah Binti Ab Rahman (maziah650@kelantan.uitm.edu.my)

Zakat is one of the five pillars in Islam.  To be more specific, Zakat is the third pillars stated in the Islam fundamental.  The distribution of zakat in Malaysia should be able to reduce the poverty on society and help the zakat recipients in fulfilling their needs.The aim of this research is to investigate the effectiveness of Zakat distribution based on human needs in Maqasid Al Syariah. This research also wants to know the effect of Zakat on the human needs that includes religion, physical self, knowledge, family and wealth. Approximately, 100 sets of questionnaire were sent to zakat recipient’s in Kota Bharu, Kelantan. All respondents return their responses. Data were analysed using IBM SPSS Statistics 20. In order to identify the significant relationship between variables, regression analysis has been done by conducting t-test and hypothesis testing. The result of the study indicates that five elements of Maqasid Al Syariah were positively affecting zakat distribution efficiency. The study also able to identify the most and least factor that influenced zakat distribution efficiency which are preservation of wealth and preservation of family.  This study concludes that zakat distribution system is not only fulfilling monetary needs but also non-monetary needs.

Mia Selvina (miaselvina@matagaruda.org), Ludovicus Sensi Wondabio (lwondabio@gmail.com)

This paper examines the determinants of client acceptance decision at non big 4 accounting firm. Therefore this study examines differences of determinants of client acceptance decision at non big 4 accounting firm at 2nd tier and 3rd tier accounting firm. Risk management consists of client risk, audit risk, accounting firm, audit fee and specialist auditor. This study uses client acceptance data in 2nd tier accounting firm and 3rd tier accounting firm. It proves that the determinant of client acceptance decision at non big 4 accounting firm is management integrity, client business risk, audit risk, and audit fee. There is no effect of accounting firm size in client acceptance decision..

I Made Pradana Adiputra (adiputraundiksha@gmail.com), Sylvia Veronica Siregar (sylvia.vnps@gmail.com), Ratna Wardhani (ratnawardhani@yahoo.com)

This study aims to examine the influence of corporate social responsibility disclosure positively affect the cost of equity capital in the previous year and test the disclosure of social responsibility negatively affect the cost of equity capital in companies with good corporate governance. Research data is annual report report or sustainability report 2012-2014 on 53 sample companies listed on IDX accordance with GRI disclosure criteria for content analysis CSR score calculation and using regression analysis technique for hypothesis testing with SPSS. Results found that the influence of corporate social responsibility disclosure positively related cost of equity capital in the previous year and disclosure of social responsibility negatively affect cost of equity capital in firms with good corporate governance. Contribution of research is analysis of corporate social responsibility disclosure at some industrial sector companies in GRI in Indonesia to cost of equity capital. Further disclosure of corporate social responsibility is linked to a broader comprehensive corporate governance by using a score with a check list comprising the characteristics of the board of commissioners and the audit committee, on firm’s cost of equity capital.

Wasilah Abdullah (wasilah_abdullah@yahoo.com)

Keywords: Accounting and Business Management Competencies; Attitude Toward Entrepreneurials; Entrepreneur; Interest; Subjective Norm.Facing ASEAN Economic Community, Indonesian Government through the regulation wants to encourage the emergence of new entrepreneurs. The purpose of this research is to know about accounting students’ interest to become an entrepreneur as a career choice. Theory of planned behavior (TPB) is used to analyze the interest of accounting students. Based on the theory,  three factors affects positively toward interest to become an entrepreneur. They are attitude toward entrepreneurial, subjective norms, and accounting competencies as a proxy of perceived behavioral control. Sample of this research is Accounting Students in Universitas  Indonesia cohort 2012 and 2013. The result shows that attitude toward entrepreneurial positively affects the interest of accounting students to become an entrepreneur. On the other hand, subjective norm negatively affects the interest of accounting students to become an entrepreneur. Third factor, accounting and business management does not affect the interest of accounting students to become an entrepreneur as a career choice.

titik setyaningsih (titiksetyauns@gmail.com), Andi Asrihapsari (andi_asri0000@yahoo.com), Pram Suryanadi (surya_nadi@yahoo.co.id)

This study aims to analyze the implementation of Javanese local wisdom in accounting equation and accounting transactions especially in family business. Javanese local wisdom is one of perspective to develop new knowledge, This study used Case Study Research (CSR) approach. The research objective was to find out the problems of Javanese local wisdom value implementation. Therefore, the descriptive practice-oriented research was conducted. Data were gathered through observation and interview with owner or chief executive officer comp any in Solo. The finding shows Javanese local wisdom values can be implemented in company even though they are implemented only in a few transactions. Accounting equation based on local wisdom value becomes more important because we can get the meaning of “katentreman ati” (real happiness). Tulung tinulung help each other, social obligation and dignify employee as social capital make these companies survival. The limitation of this study is data collection only gathered from family company. In addition, the real observation about participant’s activities is limited only in several transactions. However, this study raises two interesting problems to think about the implementation of local wisdom value: exploration local genius and alternative local wisdom mindset in accounting. The local wisdom value could be well implemented only with commitment to share value to the next generations

widyahayu warmmeswara kusumastati (widyahayu6@gmail.com), Sylvia Veronica Siregar (sylvia.vnps@gmail.com), ratna – wardhani (ratnawardhani@yahoo.com)

This paper was trying to prove the influence of value relevance of earnings to cost of equity and to cost of debt. This study was done on manufacturing companies listed on Indonesia Stock Exchange during 2015 and 2016. The measure of value relevance was adjusted R square resulted from 15 years rolling data from 2002 to 2016 and 2001 to 2015. The results showed that earnings have no value relevance for shareholders and creditors. It can be known from the insignificant influences of value relevance to cost of equity and to cost of debt.  Shareholders and creditors made investment decisions based on other things rather than company’s earnings.

Siti Nuryanah (siti.nuryanah@ui.ac.id), Rizky Peni Permatasari (rizkypeni@hotmail.com)

This paper aims to analyze the effect of corporate governance on earnings quality of banking companies that listed on Indonesia Stock Exchange during 2013-2015. The study divides corporate governance mechanism to external and internal. Internal corporate governance is measured by the effectiveness of board of commissioners and the effectiveness of audit committee. Meanwhile, external corporate governance is measured by audit quality that consists of size and tenure of public accountant companies. In addition, earnings quality is measured by discretionary accruals from Beaver and Engel (1996). Using market to book ratio, size, return on assets, and leverage as controlling variables, the results show that the effectiveness of audit committee has a positive significant effect on earnings quality. However, the effectiveness of board of commissioners, audit tenure, and audit size do not have significant effects on earnings quality.

Azolla Degita Azis (azolladegita@gmail.com), Sylvia Veronica Siregar (sylvia.vnps@gmail.com), Fitri Any (Fitri_any@yahoo.com), Lianny Leo (lianny.leo@ui.ac.id)

This paper examines whether firms manipulating their reported financial when facing high environmental uncertainty. Results show that a complex and dynamic environment weakens financial reporting quality. More specifically, the negative association between financial reporting quality and environment uncertainty is weakened for diversified firms, insufficient of using technology for business operation, and those facing high market competition for firms in the same industry. We examine sample of public firms in Indonesia during the 2013-2014 period with Generalized Least Square methods. In this paper, we also develop Environmental Uncertainty Index to consider the complex and dynamic environment with factor analysis. Overall, our findings suggest managers use dicretionary accruals to reduce the variability in reported earnings when firms operate in high environmental business uncertainty.

Riana Widiastuti (rianawidiastuti2012@gmail.com), Dyah Setyaningrum (dystia_01@yahoo.com)

Keywords: Fixed assets, Information quality, Information systems, Net benefits, Service quality, SIMAK-BMN,  State-Owned Assets, State Universities, Update DeLone and McLean IS Model (2003),  System quality, Use, User Satisfaction.This study discusses the influence of information quality, system quality, service quality and the use toward user satisfaction, and the influence of use and user satisfaction toward net benefits in the implementation of Accounting Management Information Systems of State-Owned Assets (SIMAK-BMN) at State Universities, by using Model Update DeLone and McLean (2003). SIMAK BMN is an information system for the implementation of the administration of the assets at the working unit of the Central Government. This study uses primary data compiled from 101 respondents the asset administration officials. The results of this study are generally consistent with research conducted by DeLone and McLean (2003). However, because the application of SIMAK BMN is mandatory, this research does not examine the effect variable of information quality, systems, and service toward system usage. The information quality, systems quality and the use influence the user satisfaction, however service quality does not influence the user satisfaction. Furthermore,  the use and user satisfaction was found influence to the net benefits. To optimize service quality, in addition through formal channels also can be held by informal channels such as sharing group between asset administration officials.

Ain Hajawiyah (ainhajawiyah@gmail.com), Chaerul D Djakman (cdjakman@gmail.com), Desi Adhariani (desi.adhariani@ui.ac.id)

This paper aims to examine the sequential effect of cost of equity capital and CSR disclosure with family ownership as moderating variable. This empirical study examines samples of manufacturing firm in Indonesia using multiple regression analysis. Firms with high cost of equity capital in previous years have extensive CSR disclosure level. Further, firms with extensive CSR disclosure get benefit of lower cost of equity capital in the following year. Family ownership weakens the effect of previous years cost of equity capital on CSR disclosure. On the other hand, family owneship do not moderate the effect of CSR disclosure on the cost of equity capital. This study contribute in the literature by providing empirical evidence on sequential effect of cost of equity capital and CSR disclosure with family ownership as moderating variable from one of developing country.

Dewi Kartika Sari (dewi.kartika@vokasi.ui.ac.id), Sylvia Veronica Siregar (sylvia.vnps@gmail.com), Ratna Wardhani Wardhani (ratnawardhani@yahoo.com)

The purpose of this study is to provide empirical evidence in Indonesia regarding the value relevance of related party’s transactions (“RPT”) disclosure, the moderating effect of auditor (audit quality) on the value relevance of RPT disclosure, and the moderating effect of financial analysts (analyst coverage) on the value relevance of RPT disclosure. We measure the audit quality by using a comprehensive measurement, which include Big 4 and four auditor industry specialist criteria. We found that the disclosure of RPT, whether RPT included in the asset group (RPTA) or in the liability group (RPTL), has value relevance. However, this study has not been able to provide evidence of auditor’s moderating effect on the value relevance of RPT disclosure. Regarding moderating effect of the financial analysts (analyst coverage), this study has only found a partial support, that the financial analyst moderating the value relevance of RPTA disclosure, but not moderating RPTL disclosure.

Galih Prima Dhamara (galihpd@yahoo.co.id), evony silvino violita (evony.silvino@gmail.com)

This research aims to examine the influence of financial distress and independence of board of commissioners on tax aggressiveness. This research uses 97 manufacture firms listed on the Indonesia Stock Exchange from 2010 – 2013. Using regression method, this research shows that financial distress and independence of board of commissioners have no significant influence on tax aggressiveness. High corporate governance scores do not guarantee a good practice. This research also proves that financial distress has no moderating effect on influence of commissioner independence on tax aggressiveness since independence of board of commissioners does not have significant effect on tax aggressiveness.

Maisya Pratiwi (maisyapratiwi@gmail.com), Agus Maulana (agmaulana.skl@gmail.com), Mutiara Kemala Ratu (mutiarakemala.ratu@gmail.com), Riky Rizki Junaidi (rikyrizkijunaidi@gmail.com) , Elvia R Shauki (elvia.shauki@icloud.com), Vera Diyanty (Veranabila1@

This study aims to examines the effect of fair value accounting on earnings management. This study also tests whether audit quality can reduce the effect of fair value accounting on earnings management. The study was conducted on all companies listed in Indonesia Stock Exchange 2012-2015 except for financial sector companies. These results indicate that measurement of fair value accounting contained  in net income have not a significant effect on earnings management. While the measurement of fair value accounting contained in other comprehensive income have a positive effect on earnings management. This result also shows that the quality of auditor weaken the influence of fair value accounting contained in net income and other comprehensive income on earnings management. Furthermore, the analysis of the result show that the use of measurement level 2 and 3 fair value accounting hierarchy contained in net income have a positive effect on earning management. The result of the study confirmed that the fair value measurement allowed the judgment from management can be used opportunistically to do earnings management. We also found that level 1 fair value accounting hierarchy contained in other comprehensive income have positive effect with earning management. Other findings are auditors can weaken the influence of the use of level 2 and 3 fair value accounting hierarchy contained in net income on earnings management and auditor may weaken the effect of the level 1 fair value accounting hierarchy contained in other comprehensive income on earnings management. Overall, the results of the research show evidence to support that fair value can be used as an alternative management for higher earnings management. Then auditors who have good quality can reduce opportunity of management to use fair value measurement for earnings management.

Ratnika Detri Goddes (dwiratnika@gmail.com), evony silvino violita (evony.silvino@gmail.com)

This research investigates the effects of risk preferences and good corporate governance on cost efficiency of Islamic Banks. This paper investigates the Islamic Banking listed on the Indonesia Financial Service Authority during the period 2010-2014. The cost efficiency score is measured using Stochastic Frontier Approach (SFA) and the hypothesis is tested using regression method. The result shows that the solvency and liquidity have positive effects on the efficiency of the Islamic Banks. However, financing quality, good corporate governance (GCG) have no significant effect on the cost efficiency of the Islamic Banks. It indicates that banks’ management reacts positively to maintain the ability to meet all its obligations by improving the efficiency.

Ferry Andika Harmen (fandikaharmen@live.com), Rafika Yuniasih (rafikausman@gmail.com)

This study aims to analyze the inventory management and propose improvements to inventory control procedures at the Secretariat of the Tax Court. This study used a qualitative method with case study approach. This study describes the facts relating to inventory management activities, associated with the procurement planning, receipt of inventory, storage and maintenance, distribution of inventory, and record keeping. The results showed there are still weaknesses in the inventory management and control procedures. Therefore, this study proposes the improvement of inventory control by applying the calculation  of buffer stock and reorder point, and make improvement to the procedures of; supplies admission; storing and maintenance; distribution procedure; and record keeping.

Hidayah Asfaro Saragih (hidayah.saragih@gmail.com), Chaerul Djakman (cdjakman@ymail.com), Desi Adhariani (desi.adhariani@ui.ac.id)

This study aims to investigate the effect of CSR disclosure on tax avoidance with internationalisation as a moderating variable. By conducting regression analysis on 153 firm-years from manufacturing industry in Indonesia during 2013-2015, this study finds that CSR disclosure positively affects tax avoidance. Meanwhile, internationalisation has no effect on tax avoidance and has no moderating role against the positive association between CSR disclosure and tax avoidance.

Hidayah Asfaro Saragih (hidayah.saragih@gmail.com), Frista Frista (frista@staff.ukdw.ac.id), Yuannisa Aisanafi (aisanafiyuan@gmail.com), Vera Diyanti (veranabila1@gmail.com) , Elvia Shauki (elvia.shauki@icloud.com)

This study aims to investigate the effect of thin-capitalization on tax avoidance of non-Sharia Stock Indexed (non-ISSI) firms before and after the enactment of Minister of Finance Decree (PMK) number 169/PMK.010/2015 (PMK-169). The PMK-169 was issued at the end of 2015 by Indonesia government to limit the amount of debts of companies in certain industries resulting that non-ISSI companies are also subject to this rule. By conducting regression analysis of unbalanced panel data of 1064 firm-years during 2011-2016, it was found that the effect of thin-capitalization on non-ISSI’s tax avoidance was lower after the implementation of PMK-169 and became indifferent from ISSI firms after the adoption of PMK-169. Prior to PMK-169, the effect of thin-capitalization on tax avoidance was higher in non-ISSI firms as well as higher than ISSI firms. The implication of these findings is that PMK-169 as a thin-capitalization rule has been effective in reducing tax avoidance practices in Indonesia.

Alfian Dovi Pradana (alfiandovipradana@gmail.com), Ning Rahayu (ning.rahayu@yahoo.com)

Tax Audit Against PT A in few years have led law uncertainty for PT A’s goodwill amortization expense as a deductible expense on taxable income calculation. The uncertainty is reflected in tax assessment letter which inconsistence led correction on PT A’s goodwill amortization expense in tax year has been audited. The arguments are used by the DGT to make correction also look contradictive with the accounting standard and taxation regulation. Therefore, this study is aimed to analyze the arguments used by Directorate General of Taxation (DGT) in make tax treatment on PT A’s goodwill amortization expense which arise from acquisition seen from the accounting standard and taxation regulation. Moreover, this study also aimed to analyze the tax treatment on the PT A’s goodwill amortization expenses which applied by the Directorate General of Taxation seen from the principle of legal certainty. This study uses qualitative method and data collection technique which used by author is literature studies and field research by interviewing key informant. Based on findings and discussion, PT A’s goodwill arising from the acquisition of PT B PT D, and PT E should remain and exist on the financial statements, thereof goodwill amortization expenses are deductible expense on taxable income calculation. The principle of legal certainty in the tax treatment applied by DGT to PT A also have not been fully met. Thus, the result of this study is the argument used by the DGT regarding the tax treatment of PT A’s goodwill amortization expense is contradictive and do not comply with accounting standard and tax regulations. Moreover, the tax treatment on PT A’s goodwill amortization expense applied by DGT are not fully met the principle of legal certainty.

Muhammad Umar (muhammadumar2812@yahoo.com), Shinta Megawati Sitorus (shintamegawati@gmail.com), Rika Lusiana Surya (rikalusiana09@yahoo.com), Elvia Shauki (elvia.shauki@icloud.com) , Vera Diyanti (vera.diyanti@ui.ac.id)

This study examines the effect of  information technology and pressure such as time budget and task complexity on dysfunctional audit behavior. This study also tests whether dysfunctional audit behavior has an effect on fraud detection. Data were gathered from 81 auditors in Jakarta and were analyzed with structure equation model (SEM). The results explains that pressure (time budget and complexity task) have some impact on dysfunctional audit behavior while information technology has no effect on dysfunctional audit behavior. This results also show that dysfunctional audit behavior has negative effect on fraud detection. Job-related stress framework explain the conditions that make stress (stressors) will affect to individual psychology, physic, and behavior (strains) and make some result (outcome). Pressure (time budget and complexity task) is the condition that make stress have both positive and negative effect to individual behavior. Pressure can make individuals to behave dysfuctionally or motivate them to give their best shot eventhough their work uses a lot of energy and mind to solve the problems. Raising dysfunctional audit behavior will reduce auditor’s ability to indentify material misstatment in financial statement.

Massaid Bimo Setyawan (massaid.bimo@gmail.com), Viska Anggraita (viska257@gmail.com)

Consensus about ownership concentration in Indonesian firms makes agency problem in Indonesia expected to be different from other countries. This study aimed to review the impact of CEO career concern on firms policy. The study used regression method with  samples of CEO on the Indonesia Stock Exchange in 2012 – 2014. Newly-appointed CEO have been proved to use real and accruals earnings management to increase profits in the early period of his tenure, while leaving CEO only used real earning management to increasing earning in his last year of appointment. CEO career origin and shareholder affiliation haven’t been proved to effecting newly-appointed CEO’s earning management. The study concluded the CEO’s preference to use real earning management during his tenures and encouraged the enforcement of regulation related to disclosure of management’s profile.

Indriati Siti Pratiwi (indriati.s.pratiwi@gmail.com), Anisa Ramadhini Trianaputri (ramadhinianisa@gmail.com), Ain Hajawiyah (ainhajawiyah@gmail.com), Vera Diyanty (veranabila1@gmail.com)

This study aims to examine the effect of CSR disclosure on earnings management practices, both in accrual earnings management and real earnings management, also in aggregate practice (accrual and real). This study is expected to provide a more comprehensive picture than previous research, by examining the effect of CSR disclosure on all types of earnings management by the firm. Assisted with NVivo 11 data analysis software, we measured CSR disclosure in 186 annual reports made by 62 manufacturing firms listed on the Indonesia Stock Exchange in the period 2013-2015. Using a quantitative approach, we found evidence that firms with high CSR disclosure would have low levels of earnings management. However, this negative effect is only evident for the accrual earnings management and aggregate earnings management. As for the real earnings management, there is no significant effect of CSR disclosure to this practice. This finding also reinforces the notion of previous research, by providing empirical evidence that CSR-oriented firms tend to prefer accrual earnings management practices rather than real earnings management.

Putri Nugrahaningsih (pu3alicia@gmail.com), Sri Suranta (srisuranta@yahoo.com), Jaka Winarna (jakaning2003@yahoo.com)

The ratification of Law Number 6 of 2014 regarding Village has encouraged villages to manage their resources, including the development of their people economy. One of the way to manage people economy is by the establishment of Village Owned Business (BUMDes). The inclination to achieve Good and Clean Governance is one of the main agenda of reformation that is expected to be implemented by the government consistently. To realize it professionalism from the government apparatus in providing public services is needed. This study aims to encourage the development of capable, skilled, and professional village government in managing village funds, so that the funds can be used optimally. Besides reliable human resources, supporting infrastructure in the form of information and communication technology should be provided to support the acceleration of development and reporting of accurate data from the village. This study employs descriptive and qualitative method, with group discussion, in depth interview, observation, and documentation technique to collect the data. This study is conducted in Bulusulur Village, Wonogiri, Central Java. The analysis result shows that the village fund is implemented by establishing BUMDes with five business units, swimming pool and campground, clean water infrastructure, waste bank, and banana stem handicraft. To answer BUMDes needs in accountability, transparency, and information, web-based Financial Accounting Information System BUMDes is implemented to facilitate input and analysis of all data regarding financial transaction, as well as preparation of BUMDes financial report. The application is a web-based application programmed in PHP and MySQL database, thus this application can be easily installed and operated. This application also can be run in intranet or client server network as well as online network. This application is developed as a dedication to encourage openness in public information in Indonesia as well as to develop professional, accountable, and transparent BUMDes financial management.

Niluh Putu Dian Rosalina Handayani Narsa (niluh.narsa@feb.unair.ac.id), I Made Narsa (i-made-n@feb.unair.ac.id)

Although many theoretical explanations have been offered to explain escalation of commitment, there is still a literature gap that individual variables as the determinants of the escalation indicate inconsistent findings. On the other hand, there is an opportunity to explore the role of a new individual variable, namely the Psychological Capital (PsyCap) which is a second-order construct of self-efficacy, hope, optimism, and resilience. This study aimed to analyze how the four variables, both as an individual variable and a second-order construct, predicted the escalation of commitment. As many as 297 business students had completed the questionnaire given. The results showed that self-efficacy, optimism, and resilience have a significant positive correlation towards the escalation of commitment. Furthermore, PsyCap as a second-order construct was capable of better predicting the escalation of commitment than each of the constituent variables. The implications of these findings are, that PsyCap is not always associated with positive outcomes, thus it is crucial for companies to identify the type of personnel to be placed in a position often involved in decision-making.

Rina Dharmawati (rina.dharma.w@gmail.com)

This study aims to investigate the effect of Integrated Reporting on Relevance of Accounting Information: evidence from ASIA. By conducting regression analysis on 195 firm-years from listed companies on The International Integrated Reporting Council between 3 years. Integrated Reporting is measured by coverage ration of keywords using NVIVO Software Version 11. The results shows that impelementation of Integraed Reporting has no effect on the relevance of accounting information.

Kristin Rosalina (kristin.rosalina@gmail.com), Yeney Widya Prihatiningtyas (yeney.wp@ub.ac.id)

Corruption remains to be a serious problem for developing countries such as Indonesia. Based on this situation, referring to the agency theory and human capital theory, this study analyzes several factors influencing corruption of Provincial Governments in Indonesia which include fiscal decentralization, governmental accountability, e-government, level of wages, and level of education. Having applied a multiple regression analysis, the result of this research indicates that fiscal decentralization brings a significantly negative effect on corruption. This fact means that provinces having a higher fiscal decentralization level tend to have a lower corruption level. However, the research finding also shows that e-government has a positively significant impact on corruption. It means that provinces that implement good e-government tend to have higher corruption level compared to those which do not apply such style of government. In addition, e-government in this study is authorized by the mechanism of financial data disclosure through the provincial government website. The policy implication of this study is intended to optimize the implementation of fiscal decentralization and to evaluate the use of e-government in enhancing the government transparency.

Felix Wijaya (kwikfeilik@gmail.com), Vania Natasha (vania.natasha.oedi@gmail.com), Amelia Setiawan (amelias@unpar.ac.id)

Purpose – In this study, we want to find out whether or not an implementation of ERP will shift the position of accountants in the respective company, if yes, how much will it shift the position. Methodology/Approach – This study is using descriptive method to process the data obtained from interviews as the main data collection tools. The samples are selected using judgment sampling method, and four questions are prepared as the initial question to start the interview. Findings – After conducting the interview with seven companies, we find that even now, the implementation of ERP still not able to shift the position of accountants entirely. This is caused by many things affecting the respective company, but it does shift some of the role of accountants in a company, but as the ERP being developed as the time goes by, it is unknown whether accountants will the same position in the future. Research Limitation/Implication – Our findings will have implication for companies and accountants in regards of ERP implementation, but with the limitation of the samples, it is possible that different results might show with different companies or countries as the sample.Originality/Value – This Study is among the few studies about the impact of ERP implementation to accounting profession, especially with the sample from both developing and developed country.

Maheran Zakaria (maher835@salam.uitm.edu.my), Siti Maziah Ab Rahman (maziah650@kelantan.uitm.edu.my), Razimi Zakaria (razimi91@kelantan.uitm.edu.my), Nawal Kasim (nawal120@salam.uitm.edu.my)

The objectives of this study are to explore zakah recipients’ perceptions of their basic needs andthe ability of zakah funds in fulfilling those needs and  elevating them to the level of comfort life. Data were collected through in-depth interviews of eight business assistance participants and a focus group discussion of twelve former sewing program’s participants. The interviews and discussions were audio-recorded, transcribed and analysed qualitatively by referring to the needs of Maqasid al-Syariah.  Results indicated that respondents perceived zakah funds have successfully assisted them in fulfilling basic needs (daruriyat) but have yet elevated them to a level of comfort (hajiyat) and far from reaching luxury (tahsaniyat).  A more pro-active zakah distribution mechanism should be initiated so that the recipients would perceive it as an effective tool in fulfilling their basic needs (daruriyat) and comfort living (hajiyat). Eventually, the goal of Maqasid al-Syariah in zakah jurisprudence will be attained and the true meaning of zakat practice is materialised, if zakat successfully elevates the recipient’s living standard to the level of comfort in their lives.

Anisa Ramadhini Trianaputri (ramadhinianisa@gmail.com), Chaerul Djakman Djakman (cdjakman@gmail.com), Desi Adhariani (desi.adhariani@ui.ac.id)

This study aims to examine the effect of CSR disclosure on earnings management practices, both in accrual earnings management and real earnings management, also in aggregate practice (accrual and real). This study is expected to provide a more comprehensive picture than previous research, by examining the effect of CSR disclosure on all types of earnings management by the firm. Assisted with NVivo 11 data analysis software, we measured CSR disclosure in 186 annual reports made by 62 manufacturing firms listed on the Indonesia Stock Exchange in the period 2013-2015. Using a quantitative approach, we found evidence that firms with high CSR disclosure would have low levels of earnings management. However, this negative effect is only evident for the accrual earnings management and aggregate earnings management. As for the real earnings management, there is no significant effect of CSR disclosure to this practice. This finding also reinforces the notion of previous research, by providing empirical evidence that CSR-oriented firms tend to prefer accrual earnings management practices rather than real earnings management.

Nasrin Azar (nasrinazar86@gmail.com)

Although several studies have explored the nexus between corporate governance and firm performance, there are still some areas that need further attention. These areas include the impact of corporate governance characteristics such as board training, board nationality, board education, nomination committees on firm performance. Thus, the aims of the study are to examine the impact of corporate governance on firm performance. To achieve this objective, data were collected from 542 listed companies in Bursa Malaysia for the period of 2003 to 2012. This study used multiple regression for data analysis. The corporate governance characteristics examined includes board of directors (size, independence, training, nationality, education), audit committee (size, independence, meeting), and nomination committee (size, independence, experience). Firms performance is measured using return on assets, return on equity and Tobin‘s-Q. In general, the results show that firms with effective corporate governance are more likely to have better firm performance. This means that there is direct relationship between firms with strong corporate governance and firm performance. These findings are robust on other estimators and sensitivity analysis. The results provide several implications to investors, policy makers, researchers and regulators, especially with regard to enhancing firm performance.

Myria Rafiz Khasandy (myriarafiz@gmail.com), Desi Adhariani (desi.adhariani@ui.ac.id)

Keywords: CEO Tenure, CFO Tenure, Earningss Management, Monitoring System. This research’s purpose is to determine the effect of CEO’s & CFO’s tenure period to earnings management behaviour, through discretionary accrual and real activity. CEO will earn good reputation if they can generate higher profits for the company during their tenure, so there are some indications that they will manage their earnings using their discretion in their early years of tenure, and so does CFO. This research uses manufacturing companies listed in Indonesia Stock Exchange for the sample. This research results that both CEO’s and CFO’s early years of tenure affect the earnings management behaviour. We also did some additional analysis to understand the characteristic of the samples that might be strengthen the results. The additional analysis showed that the both CEO & CFO job market competition in Indonesia manufacture industry is very low, so both CEO and CFO might not have external pressure to have good performance that will lead to their reputation in the job market. In the other words, the performance of CEO & CFO in Indonesia didn’t affect by their career concern, but by their reputation to the shareholders internally.

Rizky Adithiya (rizki.adithiya11@gmail.com), Ira Geraldina (ira.geraldina@ibs.ac.id)

The purpose of this study is to examine the role of corporate governance in moderating the effect banking conglomeration on firm value. Using a samples of 84 firm years of banks listed in the Indonesia Stock Exchange during the 2011-2015 periods, empirical evidence of this study confirms the argument which is stated that banking conglomeration has positive effect on firm value. Of the four dimension of corporate governance are used in this study, this study finds that: (i) ownership monitoring and disclosure strengthen the effect of banking conglomeration on firm value, (ii) internal monitoring weaken the effect of banking conglomeration on firm value, and (iii) regulatory monitoring do not moderate the effect of banking conglomeration on firm value. This result has implication that banks need to strengthen their internal monitoring mechanism to supervise banking conglomeration’s activities effectively. For regulator, they should increase their regulatory monitoring, so their supervision can strengthen the effect of banking conglomeration on firm’s value.

Yuji Shirabe (yuji.shirabe@gmail.com)

We examine the relation between the market reaction to management earnings forecasts and subsequent share repurchase announcements. Our results show that repurchase firms experience larger market reaction to bad news of management earnings forecasts than non-repurchase firm before repurchase announcements. By contrast, there is little difference in the market reaction to good news between repurchase firms and non-repurchase firms. Additionally, little difference exists in the information content of management forecasts between repurchase firms and non-repurchase firms. In summary, our results imply that Japanese companies announce a share repurchase in response to the market overreactions to bad news in management earnings forecasts.

dyah purwanti (dyahpurwanti@gmail.com), Benny Setiawan (benny.setiawan5@gmail.com), Iin Indrawati (iin_1905@yahoo.com)

This study aims to investigate factors why Indonesian managers choose a revaluation model for their fixed assets. Few Indonesian firms apply the revaluation model, and are more likely to opt for incidental fixed asset revaluation, without regular revaluation and keep historical cost valuation. We observed all companies listed on the Indonesia Stock Exchange during the period 2008-2016, and identified 76 out of 531 companies applying the revaluation model. We use logistic regression to identify the motivation of fixed asset revaluation. The result is the revaluation of fixed assets in Indonesia is designed to the fulfillment of contractual agreements with creditors, since revaluation increase the value of debt covenant and improve debt-to-equity positions. The revaluation of fixed assets is also motivated by tax incentives enacted in 2015 and 2016. Then, we find that revaluation reserve relevant to future company’s performance. These findings are supported by the timing of the revaluation model selection, where many Indonesian firms choose a revaluation model along with the rise of property prices and tax incentives in 2015. However, corporate governance is less likely to engage in action to revalue assets. These results support new findings to see the implementation of IFRS in Indonesia is motivated by the tax incentives, business conditions and corporate governance.

Nurul Aisyah Rachmawati (nurulaisyah@universitas-trilogi.ac.id), Sylvia Veronica Siregar (sylvia.vnps@gmail.com), Ratna Wardhani (ratnawardhani@yahoo.com)

The purpose of this study is to investigate whether investors misprice industry-wide and firm-specific earnings components in the different level of competition industries. Theory of economic suggests that the industry-wide earnings component is more persistent than firm-specific earnings component. If investors tend to misprice the persistence of industry-wide and firm-specific earnings (Hui et al., 2016), and if these effects are exacerbated by low-competition industries (Baginski et al., 1999; Rachmawati et al., 2016), we predict that investors more tend to misprice industry-wide and firm-specific earnings in the low-competition industries than in the high-competition industries. The results provide evidence which is consistent with the prediction. Finally, we show that market also fail to fully distinguish that industry-wide cash flows is the most persistent component of earnings while firm-specific accruals is the least persistent in the different level of competition industries.

Fathiah Rahmaningtyas (fathiah.rahmaningtyas@gmail.com), Aria Farah Mita (aria.farahmita@gmail.com)

This research aims to examine whether the adoption of IFRS decrease earnings management in companies from Asian countries. This research considers the impact of country level investor protection on the adoption of IFRS that would affect earnings management. Kothari et al. (2005) model is used to calculate discretionary accruals to measure earnings management. Unlike most of previous research, the result shows that earnings management is higher after the adoption of IFRS. This increase in earnings management is likely due to IFRS adoption which is still at an early stage. Principle-based IFRS characteristics provide a broader judgment area for management. Thus, in the transition period of IFRS adoption, management may use its discretion in preparing financial statements. However, the positive relation of IFRS with earnings management level is lower in countries with strong investor protection.

Tivia Venica Tami Sitorus (tivia_venica@hotmail.com), Machmudin Eka Prasetya (machmudin.prasetya@gmail.com)

This research examine about the effect of the Technology Infrastructure in CRM on the Profit Increases with CRM Process mediating. Research conducted on conventional banks listed on the Otoritas Jasa Keuangan that has its Head Office located on DKI Jakarta excluding foreign banks and Islamic banks. The study sample consisted of 30 banks which is willing to return the research questionnaire. In testing hypothesis on path analysis, data was processed by using LISREL 9 and reliable by testing its validity and reliability using SPSS v.22. The results found if the Technology Infrastructure in CRM significantly affect CRM Process, but there is no effect at the Technology Infrastructure in CRM on the Profit Increases. On the other hand, CRM Process can increase the profit significantly, so that CRM Process can mediate the effect of Technology Infrastructure in CRM on the Profit Increase. Research shows indicators of the CRM Process and Technology Infrastructure in CRM relatively high but the profit growth was not determined by the Technology Infrastructure in CRM directly, that CRM Process should be mediating the effect to some banks that becomes sample to this research.

Annisa Maghfira (annisamaghfira@gmail.com), Elok Tresnaningsih (elok.tres@gmail.com)

This study aims to examine the effect of corporate governance, as measured by the effectiveness of the board of commissioners, the effectiveness of the directors, as well as the concentration of ownership to the level of mandatory forward-looking disclosures in the annual report. This study also aims to test the  effect of mandatory forward-looking disclosures in the ability to anticipate future earnings in the current stock price. This study uses a manufacturing company listed in the Indonesia Stock Exchange in 2012-2013 as a sample. The results of the study support that the effectiveness of directors is positively associated with the level of forward-looking disclosures and ownership concentration is negatively associated with the level of forward-looking disclosures. However, this study found no significant relationship between the level of  forward-looking disclosure and the effectiveness of the board of commissioners. The study also found  no association between the level of  forward-looking disclosures and  the ability to anticipate future earnings in  current stock prices.

Sarlina Sari (sarlinasari.iac2017@gmail.com), Vera Diyanty (veranabila1@gmail.com)

The purposes of this study are to examine the effect of complex accounting estimates on  audit fees and the role of audit committee’s effectiveness and family ownership as moderating variables. This research uses sample of Indonesia Stock Exchange non-financial companies from the years 2011-2015. The complex accounting estimates used in this study are non-financial assets revaluation, goodwill and goodwill-impairment. Regression results show that revaluation of non-financial assets, goodwill and goodwill-impairment have no effect on audit fee. However, the moderating effect of the audit committees’ effectiveness and family ownership have negative effect on the influence of non-financial asset revaluation on audit fees. The results of this study can be used as a reference for regulators to set auditing standards related to fair value audit procedures that require complex accounting estimates, so that auditors are more aware of the reliability of fair values ​​that are difficult to observe.

Zumratul Meini (zum.meini@gmail.com), Sugiharso Safuan (sugiharso@ui.ac.id), Setio Anggoro Dewo (dewosa@gmail.com), Vera Diyanty (veranabila1@gmail.com)

Business cycle is a kind of volatility found in agregate economic activity as an impression of the presence of macro-financial risks. In the literature, it is clarified that the business cycle and firm’s performance are unequivocally interconnected, however not continually having shared connections. These cycles for the most part comprise of two periods of expansion stage, recession or contraction stage. In this study, we analyze the effect of bussiness cycles on firm’s earning persistence. Different from the existing studies, in term of identifying cycles (expansion and contraction periods), our approach relies on the results of markov switching model applying the ASEAN-5 data (Indonesia, Malaysia, Singapore, Thailand and the Philippines). The results show that in the expansion regime, earnings persistence is higher than during the contraction regime. This results support that the bussiness cycle has significant effect on the earnings persistence as explained by the theory.

Daniel Pandapotan (danielpandapotan12@gmail.com), Aria Farahmita (farah_mj@yahoo.com)

This research aims to (1) reconstruct a defined situation faced by Public Accountant (“PA”)’s related to professional responsibility and role issues in conducting an audit of clients engaged in Indonesia Tax Amnesty Program; (2) reconstruct the AP’s response in auditing practices and accounting treatment related to responsibility and role issues of clients engaged in Tax Amnesty Program and initial implementation of PSAK 70; (3) evaluate audit standards and government regulations governing AP’s responsibilities and role in conducting an audit of clients engaged in Indonesia Tax Amnesty Program. This research was conducted with the qualitative approach through the symbolic interactionism paradigm. The data were obtained by research observation, documentation and semi-structured interview and analyzed by Milles and Huberman interactive model. This study found (1) AP deal with multiple-stakeholder situations when conduct the audit on clients engaged in Indonesia Tax Amnesty Program, so this situation indicates the need for clarification of AP’s roles; (2) Informant’s response to mitigate the gap audit expectation results related to the tax amnesty transaction for users of the financial statements through full disclosure; and (3) there is no standard and regulations provide certainty of legal guarantees to legitimate practice AP  in conducting an audit to  the tax amnesty transaction despite law No. 11 year 2016 forbid AP to divulge, disseminate and publicize the data and information.

Dyah Ekaari Sekar Jatiningsih (dyah.ekaarisekar@gmail.com), Mahfud Sholihin (mahfud@ugm.ac.id), Supriyadi Supriyadi (supriyadi@ugm.ac.id), Ertambang Nahartyo (ertambang@ugm.ac.id)

Cognitive bias and its negative effect on judgments and decisions have been well documented in accounting literature. To mitigate such bias, Cognitive fit theory suggests that compared to table, graph will become the apropriate format to present information in a complex task. In particular, cognitive-fit theory suggests that for complex task which needs high cognitive effort, graphical display could help improving judgment and decision performance. Unfortunately, this superiority of graphical display can also lead to bias caused by visual illusions, trends neglect of presented information, deviations from presentation rules, and management of impression. Previous studies testing cognitive fit theory, however, have not yet accommodated strategy to mitigate graphical display bias in complex task. This paper provides three propositions based on the works of  Hutchinson et al. (2010) and Tufte (2006, 2001) on the importance of statistical model to reduce the bias.

Maria Adelheid (ma.adelheid@gmail.com), Ning Rahayu (ning.rahayu@yahoo.com)

E-commerce is a fast growing business, similar to conventional transactions, based on the taxation aspect, e-commerce transactions are also taxed. In 2013 Indonesia issued a provision to regulate the taxation of e-commerce transactions through SE-62 / PJ / 2013 which aims to provide an understanding of the tax aspects of e-commerce transactions so that potential tax revenue can be optimized. Although this provision has been issued, but in reality the tax compliance on e-comerce transactions is still low. The question is whether this SE-62 / PJ / 2013 provision is sufficient to regulate income tax reporting on e-commerce transactions. This study is aimed to look at the effectiveness of this provision by comparing it with the similar provision of income tax reporting in the United States to review the deficiencies of each provision so that it can be analyzied what things can be done to overcome related problems. This research was conducted using qualitative method by conducting literature study and interview with related parties to get a broad picture. The results indicate that the provision of income tax reporting in Indonesia has not provided an opportunity for the tax authorities to access the information of e-commerce entrepreneurs which makes it difficult for the tax authorities to ascertain whether the taxpayer has reported the tax or not and can not verify the reports of tax payer because of the absence of the taxpayer’s information that can be used as a comparison. In order to overcome this, the tax authorities need to conduct more massive socialization and are authorized to obtain information regarding the earnings of business actors from online marketplace e-commerce transactions of third parties as well as by updating the provisions of SE-62 / PJ / 2013.

stephanus dwiarso utomo (dwi777utomo@yahoo.com), zaky machmuddah (zaky_820305@yahoo.co.id), melati oktafiyani (melati.oktafiyani@dsn.dinus.ac.id)

Abstract Purpose – The aim of the research is to investigate the associations of earnings management (DA), corporate environmental disclosure (CED), corporate financial performance (CFP), and corporate governance mechanism (CG). Design/methodology/approach – Partial Least Squares-Structural Equation Modelling (SEM). Findings – DA has a positive and significant effect on CED, DA has a positive and significant effect on CFP, CED has a positive and significant effect on CFP, DEC has a partially mediated the effect of DA on CFP, and the effect of DA on CFP becomes less at the higher CG. Suggestion for future research – It is expected to use control variables in order to clarify the effect of latent variables in the study. Besides, it is suggested to use other measurements in measuring CED. Using other proxies in the measurement of CFP, such as Tobin’s Q or others is the other suggestions.

Elfina Astrella Sambuaga (elfina.sambuaga@gmail.com), Annie Susanto (anniesusanto3@gmail.com)

The purpose of this study is to assess companies based on the ASEAN Corporate Governance Scorecard and disclosure of Corporate Social Responsibility. The research sample consisted of 14 companiy selected using purposive sampling method for 3 consecutive years. There were 42 observations using multiple linear regression. Regression results show that Good Corporate Governance (GCG) using the ASEAN Corporate Governance Scorecard has no significant effect on firm value. This result is in contrast to previous research which found there is a link between GCG and firm value. Similarly, the disclosure results of Corporate Social Responsibility (CSR) which does not have a significant effect on the value of the company. The results of this study show the nature of investors in general in Indonesia. Investors tend to focus on the company’s performance that is visible from the amount of profit generated, so that issues related to corporate governance, as well as corporate social responsibility programs have not received a meaningful response in the eyes of market participants. Based on the ‘culture’, it is recommended for regulators to participate in educating investors in order to choose investments that are not only profit-oriented, but can consider internal aspects of the company.

Elvia Shauki (elvia.shauki@icloud.com), Tito Baskoro (titobskoro@gmail.com)

What motivates a company in preparing Integrated Reporting? Does the report conform to the framework proposed by the International Integrated Reporting Council (IIRC)? By conducting a semi structured interview and document analysis for a case study applied in PT Pertamina EP (PEP) (as preparer of the integrated report), this study aims to address the above research questions. This study posits that there are three motives in preparing integrated report: (1) IR is the appropriate tools in improving company’s accountability; (2) The board is responsible to safeguard the interest of the stakeholders; and (3) The company applies normative isomorphism where both parent and subsidiary apply similar symbolic carrier (artefacts). Integrated Reporting of PEP has limited conformity with IIRC due to absence of value creation framework and principle of connectivity between information and conciseness. Nevertheless, the report satisfies: (1) principle of materiality; (2) the criteria of six capitals; and (3) content elements.

Lestyo Sasono Wijito (lsasonow@yahoo.com), Sidharta Utama (sidhartautama@yahoo.com), Sylvia Veronica Siregar (sylvia.vnps@gmail.com)

This study aims to investigate the effect of CSR disclosure on analyst forecast accuracy. In addition, this study aims to see the moderating role of public governance variables consisting of voice and accountability, government effectiveness and rule of law on the relationship between CSR disclosure and analyst forecast accuracy. These public governance variables are partly adopted from the worldwide governance indicators (WGI) for the purpose of analysis. The research sample is nonfinancial companies listed in the stock exchanges of six ASEAN countries including Indonesia, Vietnam, Thailand, Singapore, Malaysia and Philippines from 2013 to 2015. Analysis is done by using unbalanced panel data. The results showed that government effectiveness and rule of law strengthen the usefulness of CSR disclosure for analysts to predict earnings accurately, while voice and accountability is not proven to moderate the relationship between CSR disclosure and analyst forecast accuracy.

Galuh Mayanggara Chunique (chunique.galuh@ui.ac.id), Ratna Wardhani (ratnawardhani@yahoo.com)

This research aims to analyze the effects of financial derivatives utilization on corporate tax avoidance. Using the data of non-financial publicly gave contribution to the company in the Indonesian Stock Exchange in the period between 2012-2014, this research classifies a derivative user as speculator and effective hedger. The result shows that speculator companies have more aggressive tax avoidance than the effective hedgers. This research also analyzes the role of good corporate governance implementation to the relation between derivatives utilization and corporate tax avoidance levels. The result shows that a good corporate governance implementation has no significant effects to reduce the tax avoidance gap between speculator and effective hedger companies.

Muhammad Syafiqurrahman (msyafiqurrahman13@gmail.com), Sri Suranta (srisuranta@yahoo.com), Tantri Puspitaningrum (tantripus@gmail.com)

This study aims to determine the impact of committees under the board of commisioner toward tax aggressiveness. Committeess under the board of commisioner included in this study are an audit committee, nomination committee and or remuneration, risk policy committee, as well as corporate governance policy committee; which entirely proxied by the size of the committee. Tax aggressiveness is proxied by Natural Logarithm of Book Tax Gap (BTG). This study use size of company as control variable that is determined by Natural Logarithm of total asset (Ln SIZE). The data used is secondary data obtained from the annual reports of 95 manufacture companies listed on Indonesia Stock Exchange in 2011-2015. The sampling method used in this study is purposive sampling. Multiple linear regression is employed to analyze the data. This study shows that audit committee, nomination committee and remuneration, corporate governance policy committee have a positive significant impact on tax aggressiveness, and risk policy committee has a negative significant impact on tax aggressiveness.

I Putu Sugiartha Sanjaya (siputusugiartha@yahoo.com)

The research examines the impact of each element of corporate social responsibility towards firm value. The research uses 148 samples that are taken from 74 manufacturing companies that are listed in the Indonesia Stock Exchange (IDX) from 2012-2013. Firm value is measured using Tobin’s Q and each element of CSRD is measured using GRI G3.1 index and checklist. The result of the research is human rights element of corporate social responsibility disclosure (CSRD) positively impacts firm value while economic, environmental, labor, society, and product responsibility theme of CSRD does not impact firm value. This suggests that companies who disclose human rights theme of CSRD will have higher firm value thus attracting more investors.

Leonard Satria (leonard.satria@gmail.com), Vera Diyanty (veranabila1@gmail.com)

This study aims to examine the effect of unrelated diversification on firm performance to analyze board of directors’ diversity as a moderator of unrelated diversification and firm performance. Unrelated Diversification is measured using the entropy index used by Jacquemin and Berry (1979) and board of directors’ diversity using Blau Heterogeneity Index. The results show that unrelated diversification does not affect the performance of the company due to institutional condition of Indonesia. However, the board of directors’ tenure diversity as moderating variable strengthen the negative effect of unrelated diversification on the firm’s performance. The gap between board tenure causes difficulties of communication, coordination, and information transfer between directors.

Andy Michael Josua Hutadjulu (joshua.hutadjulu@gmail.com), Vera Diyanty (veranabila1@gmail.com)

This study examines the effect of unrelated diversification strategy to real earnings management. This study also examines the impact of the BOC oversight and family ownership on the effects of unrelated diversification strategies to real earnings management. Real earnings management is measured by abnormal cost production approach and abnormal discretionary cost. Unrelated diversification strategy level is measured by entropy measure. This study used 766 observations of listed companies on the Indonesia Stock Exchange during the period 2013-2015. The result of this study indicates unrelated diversification strategy positively affect the company’s real earnings management. The higher level of unrelated diversification made by the company will make the higher real earnings management. However, Board of Commissioners oversight and family ownership has no significant effect on positive effect of unrelated diversification strategy to real earnings management. The result of this study indicates that the company’s diversification strategy can also affect issues in the field of Accounting such as earnings management. In addition, the results of this study can also be used by DSAK as a regulator related to financial reporting on companies diversify unrelated to prevent the occurrence of earnings management.

Fabiola Cintantya Prakasita Bahari (fabiola.cintantya@gmail.com), Vera Diyanty (veranabila1@gmail.com)

This study aims to analyze the effect of Board of Directors’ diversity on firm performance. Diversity of the Board of Directors measured by nationality, age, gender, tenure, education specialization, experience, education level, and political connections. The result indicates that the presence of foreign director negatively affects firm performance. This is due to a low internationalization on observations. Thus, it tends to cause interpersonal gap within the team. In addition, the result also indicates that the presence of director with political connections negatively affects firm performance because political connections are utilized for expropriation of interests of several parties. This study encourages regulators, such as the Financial Services Authority (OJK), in setting minimum criteria to candidates for Board of Directors that can support firm sustainability.

Nursakti Niko Rosandy (nursakti.niko@yahoo.com), Aria Farah Mita (farah@ui.ac.id)

The research aims to examine the effect of capital expenditure (CAPEX) and market share against profits per Region in PT. Telekomunikasi Selular (Telkomsel). This research uses all Regions (10 Regions) during the year 2009-2016 (8 years), resulting to 80 observations. This research uses panel data regression model. This research shows that CAPEX does not have influence on profit, while the market share has an influence on profit. Although CAPEX has no influence on profit, the company should continue to spend capital expenditure for investment to meet customer needs, especially the mobile telecommunications industry belonging to the industry with rapidly obsolete technology therefore companies should be more selective in making investments. Performance period used in this research may cause CAPEX does not have influence on profit, CAPEX in prior year not reflect profit in period performance. Market share has an influence on profit, with a large market share, the company has strengths include: economies of scale, market power and quality management.

Intan Arianingrum (intan.arian@gmail.com), Vera Diyanty (vera.diyanti@ui.ac.id)

This research aims to investigate the impact of political connection and effectiveness of Board of Commissioner and Audit Committee on audit fees. This research uses samples of all public companies listed in Indonesia Stock Exchange excluding financial industry for the year 2012-2015 that disclose the information of their audit fees. There are two findings of this research. First, it proves that political connection can positively influence audit fees because the existence of political connection within the firm can increase firm’s inherent risk that assessed by the auditor. Second, this research also finds that effectiveness of board of commissioner and audit committee can positively influence audit fees because the board of commissioner and audit committee who are more effective will demand higher audit quality from the auditor.

Ida Ayu Marina (idaayumarina@gmail.com), Vera Diyanty (vera.diyanti@ui.ac.id)

This study aims to investigate the influence of alignment effect and entrenchment effect of family ownership and internal control effectiveness on audit fee. This study use generalized least square (GLS) regression method. The result of this study indicates that companies actually will pay significant lower audit fees because of alignment effect between controlling shareholders and company interest. This study also shows that a company which has separation of ownership and control will choose low-quality auditors to hide their expropriation. Besides that, this study also indicates that lower control risk in a company will turn to lower audit fees. This study implies the importance of audit fee disclosure which reflect inherent risk from alignment and entrenchment effect and also reflect control risk from internal control ineffectiveness.

Wildan Sadi (wildansadi@gmail.com), Vera Diyanty (veranabila1@gmail.com)

This study aims to provide empirical evidence about the effect of the board diversity on firm risk. Agency conflicts occured in Indonesian firms give attention to shareholders to determine the correct composition of the board of directors to minimize firm risk to maintain the company’s sustainability. This research uses 556 observation of listed Indonesian firms for the year 2013-2015. This study reveals that board diversity derived from risk behaviors and networking contribute negative effect on firm risk, while board diversity derived from cognitive matters has no significant effect on firm risk. This study concludes that the diversity of the board of directors influences the risk of the company, so shareholders need to consider the composition of the board of directors appropriately so that decision-making by the board of directors really aims to maximize shareholders’ value and business continuity in the long term.   Keywords: Agency conflict, Board diversity, Firm risk

Riana Sitawati (rianasitawati@gmail.com), N. A. Teguh Budhiutama (budhi.akuntan@gmail.com), Sodikin Manaf (2611smhrsfs@gmail.com), Sutono Sutono (sutonoca@gmail.com)

Companies are shifting their focus from internal capabilities such as product performance and technology innovation to more customer-oriented objectives. Otherwise, competitors may win customers by aligning their products or services more to customer preferences. This is one important factor for achieving long-term performance as companies can create and deliver products or services that are valued by customers. By winning customer acceptance, a company has a better opportunity to exist longer in the market. Therefore, improving customer-related performance is beneficial especially for the hotel industry as a people-oriented industry where direct contact with customers becomes a dominant characteristic. This study aims to analyse how competitive strategy and managerial use of the management accounting system (MAS) information may affect customer-related performance in the hotel industry. An online survey involving 116 hotel general managers (GMs) was conducted to collect data from 3- to 5- star hotels located in Indonesia. Additionally, in-depth interviews with 19 GMs were performed in order to enhance the validity of the research findings and make the discussion of the results more informative. Based on the analysis, the results revealed that managerial use of MAS information may enhance customer-related performance in the hotel industry after competitive strategy has been applied. This paper provides empirical evidence on the relationship between competitive strategy, managerial use of MAS information, and customer-related performance of hotel industry in Indonesia.

Mohamad Jatiardi (jatiardi.ppafeui@gmail.com), Nurul Husnah (nurulhusnah78@gmail.com)

This research aims to analyze the factors affecting SCeLE’s user satisfaction on undergraduate student of Accounting Department of Faculty of Economics and Business University of Indonesia by using End-User Computing Satisfaction (EUCS) model. SCeLE is e-learning system which is implemented at Universitas Indonesia. The analysis was conducted using SEM-Partial Least Square method. The factors which affect user satisfaction, based on End-User Computing Satisfaction model, were content, accuracy, format, ease of use, and timeliness. The results showed that all of the factors have significant impact to SCELE’s user satisfaction.

Nurul Aisyah Rachmawati (nurulaisyah@universitas-trilogi.ac.id), Dwi Martani (dwimartani@yahoo.com)

The purpose of this study is examine the effect of book-tax conformity level on the relationship between tax reporting aggressiveness and financial reporting aggressiveness. Different from Frank et al. (2009) and Lennox et al. (2013), this study considers endogeneity problem to minimize biased results. Using the companies listed on the Indonesia Stock Exchange for 2013-2016, this study found that there is endogeneity problem in the relationship between tax reporting aggressiveness and financial reporting aggressiveness, but no causality relationship. In this case, only tax reporting aggressiveness that affects financial reporting aggressiveness, but not otherwise. Consistent with the hypothesis, this study also found that firm with a low level of BTC is more weakened trade-offs between tax reporting aggressiveness and financial reporting aggressiveness than firm with high level of BTC. These results are consistent either with or without include the industry dummy.

Lady Inez Dominique Lius (inez.lius@gmail.com), Purwatiningsih Lisdiono (ipung31@yahoo.com)

The objective of this study is to observe the effect of corporate governance index on external audit fee of public companies listed on Indonesia Stock Exchange. Two theories are used to explain the the effect, substitution theory  and signaling theory. ASEAN Corporate Governance Scorecard is used to represent the corporate governance index.  51 firms were observations (all companies listed in IDX, except financial services, that published audit fees in the period of observation) are used in this study (17 sample companies during the year 2010-2012). Statistical results, based on Random Effect, show that both theories may be used in explaining the effect. The rights of shareholders and disclosure & transparency affected audit fee negatively, while equitable treatment of shareholders and responsibilities of the board affect audit fee positively. Overall, the signaling theory explained more the effect of corporate governance index on external audit fee in Indonesia.

Andy Setiawan (andy.setiawan77@ymail.com), ancella anitawati hermawan (ancella_hermawan@yahoo.com)

This research is conducted to determine the association of the earnings management practice with corporate borrowing capacity through the corporate reputation. The earnings management practice is measured by discretionary accruals based on modified jones model. The corporate reputation is measured by corporate image award published by Frontier Consulting Group. The corporate borrowing capacity is measured by the change of bank debt to total assets. Hypotheses are tested using multiple regression analysis and two staged ordinary least square with 65 observations of listed companies in Indonesia Stock Exchange in 2012 and 2013. The results of the research give empiric evidence that earnings management practice have a significant negative association with corporate reputation, while corporate reputation have a significant positive association with corporate borrowing capacity. The result of this research also shows that there is a positive significant association between earnings management practice and borrowing capacity while there is a positive significant association between corporate reputation estimated by earnings management practice towards borrowing capacity.

Siti Nuryanah (siti.nuryanah@ui.ac.id), Aprina Sugiarti (aprina.as@gmail.com)

This research aims to analyze the effect of family firm on tax avoidance with independent commissioner as a moderating variable. This research is a quantitative model with multiple regression method, using annual report data on manufacture companies listed in Indonesia Stock Exchange from 2013 to 2015 as a sample, thus resulting 363 of sample observations in total. Model of tax avoidance measures in this research is using Cash Effective Tax Rate as the approach. This research shows that family firms have significant and positive correlation with tax avoidance. This research also finds that independent commissioners have weaken the effect of family firm on tax avoidance.

Rachel Puspa (rachelpuspa.rp@gmail.com), Desi Adhariani (desi.adhariani@ui.ac.id)

This study assesses the effect of CEO and CFO gender on corporate earnings management. Sample was collected from manufacture firms listed in Indonesia Stock Exchange in the period of 2012-2014. Results of the study reveal that existence of female CEO and female CFO has no significant effect on corporate earnings management. This finding indicates that external pressure from other parties may be stronger for firms to manage the financial report. Consequently, it excludes the effect of the characteristics inherent in gender of corporate decision makers.   Keywords: CEO, CFO, Gender, Earnings management

Alyssa Noviera Dwiharti (alyssadwi@gmail.com), Desi Adhariani (desi.adhariani@ui.ac.id)

This research evaluates whether firms managed by female CEOs exhibit equal level of financial performance and are less risky than firms managed by male CEOs. The sample consists of manufacture firm over the period of 2010-2012. The results show that firms managed by female CEOs have better financial performance but higher risk level, which probably is due to firm growth.   Keywords: CEO, Corporate Governance, Financial Performance, Gender, Risk

Rizqi Nur Fitriana (rizqi.nurfina@gmail.com), Desi Adhariani (desi.adhariani@ui.ac.id)

This study examines the influence of gender diversity in corporate board of directors and board of commissioners on voluntary disclosure in annual reports of manufacturing companies. Gender diversity, which is measured using the percentage of the female representation in the board of directors and board of commissioners, is expected to increase the extent of voluntary disclosure of annual reports. To examine the influence, this study uses Ordinary Least Square (OLS) method with 114 samples of manufacturing companies in 2012. This research concludes that female representation in board of directors and board of commissioners and profitability do not affect the extent of voluntary disclosure. Meanwhile, size of company, liquidity, leverage and size of board jointly affect the extent of voluntary disclosure.   Key words: Gender Diversity, Board of Directors, Board of Commissioners, and Voluntary Disclosure.

Yeney Widya Prihatiningtias (yeneyprihatiningtias@gmail.com), Nurkholis Nurkholis (hnurkholis_ub@yahoo.com)

The purpose of the study is to explore the perceptions of accounting students about whether earnings management is ethical or not as well as to understand why differences in answers exist. This topic is believed to be compelling up to today, since earnings management practice is still controversial from the ethical point of view. This research is inductive in nature by using qualitative descriptive research design. The informants were undergraduate accounting students in several universities in Indonesia who were in the final years of their studies. The data was gathered by in-depth semi-structured interviews and analysis was conducted using thematic analysis. The results reveal that earnings management both has the “beauty” as well as the “beast” sides. Earnings management was considered as the “beauty” by those informants who did not have specific business ethics subject on their curriculum. Contradictorily, the students who got the subject perceived that earnings management was the “beast” or unethical. Moreover, most of the informants also considered that earnings management was also a mixed between the “beauty” and the “beast” because it is only a matter of accounting policy choice. However, when the purpose of doing earnings management is to manipulate the financial statement, then it becomes unethical. Finally, earnings management is also linked with the managers as the main actors behind it. They are the “beauty” if they can manage the earnings ethically based on the accounting standards for the sake of the corporation as well as the shareholders, yet the managers become the “beast” when they act in such a way to mislead the financial statement’s users for their individual interests.

Roshayani Arshad (roshayani@salam.uitm.edu.my), ruhaini muda (ruhaini@salam.uitm.edu.my), md mahmudul alam (rony000@gmail.com), Rahayu Abdul Rahman (rahayu916@perak.uitm.edu.my)

Inclusive growth focuses the idea on equality of opportunity in terms of access to market, resources and regulatory bodies for a society. The inclusive growth approach allows society to contribute and benefit from economic growth. The present study focuses on socio-economic factors, zakat as social capital; and human capital that determine economic prosperity of a society. The study examines to what extent social and human capital contribute to the economic growth in Malaysia. This study uses the panel data for 14 states in Malaysia from year 2005 to 2014. The results suggest that both Islamic social and human capital are positive and significantly affecting the economic growth in Malaysia. In addition, Islamic social capital appears to be an important element for stimulation of positive economic growth that creates opportunities to the society. Therefore, inclusive growth can be a part of solution to many contemporary issues in the society including poverty and income equality. Building of social and human capital is the basis for inclusive growth.

Riecha – Santiecha (ichaa1803@gmail.com), Deddi Nordiawan (deddinordiawan@yahoo.com)

This research aims to reconstruct accounting of bioposka fertilizer inventory in Government Institutions of Indonesia using soft system methodology. The research identifies some problematical situations related implementation accounting of bioposka fertilizer inventory such as: inadequate recording of bioposka fertilizer, measurement of bioposka fertilizer using selling price, inadequate presentation of bioposka fertilizer inventory include bioposka fertilizer inventory expense in Balance Sheet and Operational Report, insufficient disclosure notes to financial statements, lack of employee competency and the role of General Bureau as inventory manager is not optimal. Those problematical situations are resolved by this research with related actors and the institutions will do the following action: repairing of inventory accounting procedure of bioposka fertilizer, upgrading employee competency, and optimizing role of General Bureau.

Rahmad Firdaus (rahmad.firdaus@gmail.com), Ludovicus Sensi Wondabio (Lwondabio@gmail.com)

Micro, Small and Medium Enterprises (MSMEs) play an important and strategic role in national economic development. Some of the roles of MSMEs include: major players in economic activities in various sectors, the largest employer, as important player in the development of local economic activities and community empowerment, creators of new markets and sources of innovation, as well as its contribution in maintaining balance of payments through export activities. With this potential, MSMEs can’t be separated from various obstacles. The main obstacle faced besides capital is the application of professional management. MSMEs don’t understand the importance of the financial statements of a business. This study aims to produce financial statements for SMEs in accordance with financial accounting standards (SAK). The SAK used is the SAK of Micro, Small and Medium Enterprises (MSMEs), newly approved by the Financial Accounting Standards Board (FASB) at the end of 2016, and will become effective as of January 1, 2018. The background of this SAK is based on several results of research on the implementation of SAK for Entity without Public Accountability (SAK ETAP), previously SAK used as a standard preparation of financial statements for MSMEs, obtained the fact that SAK ETAP difficult to apply by the perpetrators of SMEs because it is too complex. There is also a need for micro finance institutions (MFIs) for reference in preparing its financial statements. So FASB believes that new SAKs are needed that are simpler and easier to implement. This research is a case study conducted at a cake shop, “Rafita Cake”. The methods used are qualitative descriptive; Observation and interview; Documentation study; Literature study; and comparative analysis. Rafita Cake’s management recognizes the importance of financial statements, among others, as a requirement for funding. However, the financial statements that have been made are still very simple and not in accordance with SAK, so some attempts to apply for funding are always rejected by banks. With this SAK EMKM, the management of Rafita Cake felt quite helpful in preparing the financial statements for each period.

Sany Dwita (sanydwita@gmail.com), Herlina Helmy (sanydwita@gmail.com), Charoline Cheisviyanny (sanydwita@gmail.com)

This study aims to empirically examine the influence of gender and personality, as measured by construal of self, on holier-than-thou perception bias aming Minangkabau accountants. Drawing on psychological and anthropological literature, this study formulates three hypotheses in examining the influence of gender and construal of self, as the personality variable, and their interaction on holier-than-thou perception bias. Data for this study were collected using a survey questionnaire to 235 final year accounting students in Padang, West Sumatera. The questionnaire containes three scenarios eliciting the participants judgments with regards to resolving auditor-client conflict and whistle blowing dilemma. The data collected were analyzed using the parametric analysis of variance (ANOVA) approach and were complemented by the nonparametric Mann-Whitney U test to test the hypothesis. The findings of this study show that gender has a significant influence on holier-than-thou perception among Minangkabau accountants. In particular, Minangkabau women are more likely to demonstrate a holier-than-thou perception bias compared to their male counterparts. However, the findings show that construal of self and the interaction between gender and construal of self have no influence on holier-than-thou perception bias among Minangkabau accountants.

Isnan Kashaeli (isnankashaeli@yahoo.com), Dekar Urumsah (urumsah@yahoo.com.au)

In this digital era, the main problem of a company is accounting information systems which are not optimal. Accounting information systems are an elements that are not easy to be managed, because the accounting information systems in a company are varied and complex. If the accounting information systems can be well managed, then the operational activities of a company will run properly. This research aims to examine the influence of SAP in management accounting. It used questionnaires with convenience sampling technique to gain 60 respondents. Statistic method that was used to test the hypothesis was Structural Equation Model (SEM) using PLS. The result of this research shows that SAP implementation has a significant positive effect on management accounting technique, management accountants’ role and operational factors; but SAP does not have a significant positive effect on the ability required by management accountants. The implication of this research might strengthen the point of view of the organizations towards SAP that would positively influence on management accounting.

Agus Adiwahana (agus.adiwahana@ui.ac.id), Dwi Martani (dwimartani@yahoo.com)

This research examines the implications and impacts of assets revaluation policy due to tax incentives in 2015. This research adopted descriptive and narrative method. The results showed that there is an increase number of companies which opt for assets revaluation policy because of the incentives. Companies that adopted assets revaluation policy provide a more accurate information related to the value of their fixed assets and investment properties. Disclosure of assets revaluation differs depending on the revaluation type being chosen. The impact of these assets revaluation are increasing in the companies equity, reduction in companies leverage ratio, and resulting in deferred tax effect.

Haryo Setiadi (haryo.setiadi@gmail.com), Gede Harja Wasistha (wasistha@gmail.com)

The objective of this study is to determine the effect of financial-characteristic and risk management policy of the firm on its demand on cash. The hypothesis of corporate cash holding behavior is tested using multiple regressions by publicly traded Indonesian manufacturing companies in the 2011 – 2015 periods.  According to descriptive statistics test, Indonesian manufacturing company hold on average 9% cash to total assets. Results of the study shown that net-working capital, cash flow, growth opportunity variables have significant impact on corporate cash holding, while size of the firm, leverage, profitability, and capital expenditure are not significant. These finding indicates that common practice of Indonesian group of companies has impact to the degree of influence of some internal financial variables on corporate cash holding. This study also found that hedging as a risk management’s instrument has significant effect on corporate demand on cash, but reduced by its interaction with leverage.

SeTin SeTin (setin2005@yahoo.com), Yvonne Augustine (yvonneags@gmail.com)

This study aims to examine and analyze the development of management accounting research in the field of management control system (MCS) in Behavioral Research In Accounting (BRIA) journal period 2006-2015. The analysis was conducted to answer the MCS topic issues, research methods, research variables, contextual factors (contingency variables) that affect the relation of control systems and performance, and the scope of the control system dimension in MCS research. A total of 142 articles were examined and 27 articles of MCS topics in the field of management accounting were obtained. The result of the analysis shows that all articles use quantitative methods, with experiment and empirical method. The dominant topics of MCS issues are strategic performance measurement system (SPMS), budget, reward and compensation system and performance achievement; Most of the studies examined MCS at the managerial level. Independent variables which are being studied commonly are incentives, psychological, strategy performance measurement systems and environmental dynamism. Dependent variables that dominate are performance and psychological variables. External contingency that has an impact on performance is environmental dynamism and environmental uncertainty.  The most dominant Internal contingency has an impact on performance is variable related individual factor. The majority of MCS research uses contingency variables that tend to concentrate on increasing the number of independent variables rather than on the dependent variables. Most of MCS research emphasizes one or two dimensional control systems. Keywords: Management Control System, BRIA Journal 2006-2015

Kristina Riris Parsaulian (kristinariris@yahoo.com), Lufti Julian (ljl.joel@gmail.com)

This study aims to design Standard Operating Procedures (SOP) to the process of receiving tuition fees by a host to host payment system by analyzing internal controls in to the process of receiving tuition fees by a host to host payment systemin an effort to realize the concept of Three Lines of Defense. The approach used for this research is case study research with unit of analysis is University of Indonesia. The method used in this thesis is qualitative method. The results of risk and control analysis that exist in to the process of receiving tuition fees by a host to host payment system still there are residual risk in the process. The design of SOP is expected to help the tuition fees team to know and carry out the actual duties and responsibilities and can control the risks that arise in the process so as to realize the concept of Three Lines of Defense.   Keywords: Internal Control; Risk; Internal Audit; Three Lines of Defence; Standard Operational Procedure (SOP).

Muhammad Ravin Alhakim (quonrav@gmail.com), Yohanes Yohanes (yohanes1971@gmail.com)

Insurance companies in Indonesia create unit link insurance products to lure people in insurance. Unit link is a hybrid product combining insurance and investment. Insurance companies have two activities, namely assurance service and investment management service. The purpose of this study is to analyze unit link life insurance service included in terms of Taxable Services that imposed Value Added Tax (VAT) or not, and how the imposition and calculation of VAT Tax Imposition Basis (TIB) on unit link life insurance service. Based on a case study of Tax Court Decision, there is a dispute whether the unit link life insurance service is imposed VAT or not. There is a difference of opinion between the Directorate General of Taxation (DGT) with the insurance company and Judges in other side. According to DGT unit link life insurance service contain investment management service that is imposed VAT, while insurance companies argue, investment management service is one unity as an assurance service that is not imposed VAT. The method in this research is descriptive analysis in the form of case study. Analysis of VAT treatment of unit link life insurance service is done by interviewing insurance companies, Indonesian Life Insurance Association, DGT, and experts in the field of taxation as well as associated with tax laws and part of Tax Court Decision. The result is that all parties agree that the assurance service is not imposed VAT, while the investment management service occur different opinions. The analysis is also carried out on the calculation of the VAT Tax Implementation Basis on Unit link investment management service is the Replacement Price based on the investment management fee charged to the customer and the top up charge of the investment.

Tri Ramaraya Koroy (trkoroy@yahoo.com), Wendy Joy Green (w.green@unsw.edu.au)

Multidisciplinary teams (MDTs) are increasingly being used in a range of assurance engagements. In particular, standard setters have recognised the need for the diverse expertise possessed by members of such teams in the conduct of nonfinancial assurance engagements including greenhouse gas (GHG) assurance. Ironically, the performance of MDTs is often impeded by their diversity. We employ a between-subjects experiment utilizing a complex multi-stage analytical procedures task for a GHG assurance engagement to investigate the effectiveness of two training interventions drawn from the educational and cognitive psychology literature – analogical encoding (AE) and collaborative learning (CL) – in enhancing MDT performance. We find that combining AE and CL techniques leads to the highest task performance outcomes. Our results suggest that when these techniques are combined, the potential problems of each individual technique are outweighed by their inherent benefits, enabling the team member familiarity and sharing of workload generally associated with CL to enhance the improved understanding and task ability generally associated with AE to facilitate greater improvement in performance.

Siti Khomsatun (siti.khomsatun@gmail.com), Ancella Anitawati Hermawan (ancella_hermawan@yahoo.com), Sylvia Veronica Siregar (sylvia.vnps@gmail.com)

The study aims to investigate whether there is a direct and indirect effect of ownership structure to performance using risk as mediating variable. The research was conducted on 90 sharia banks spread in 22 countries with period 2010-2013. Using unbalanced panel data and concentration ownership using limit above 50%, found that concentrated ownership is 42%. Concentrated ownership has a poor performance. Furthermore, there is no evidence of indirect effect of concentrated ownership on performance through bank risk. Government ownership has a direct positive effect to performance of Islamic banking. An indirect positive relationship is indicated by institutional ownership and foreign ownership. Institutional ownership is negatively affect to bank risk and foreign ownership is negatively affect to performance. Family ownership is no effect either directly or indirectly to performance. This is possible because the ultimate number of family ownership in Islamic bank is very small or the lowest compared to other types of ownership.

Nadia Sonia Kartika (nadiaskartika@yahoo.com), Purwatiningsih Lisdiono (ipung31@yahoo.com)

The purpose of this study is to analyze the effect of transparency disclosure index on firm value. The indices used in this study are OECD (Organization of Economic Co-operation and Development) and GRI (Global Reporting Iniciatives) index. OECD index will be divided into two indices consists of MDI and VDI to analyze the effect of mandatory and voluntary disclosure on firm value. The sample of this study is the companies that are listed on Indonesia Stock Exchange and Kompas-100 in the year 2010 to 2012. The result are vary, but most of the results shows that there are negative and significant relationship between transparency and disclosure which measured by OECD, MDI, VDI, and GRI indices on the firm value.

Martha Stephanni Putri (marthastephanni@gmail.com), Sylvia Veronica Siregar (sylvia.vnps@gmail.com)

The purpose of this research is to determine the effect of family ownership and political connection on audit fee and audit risk based on discresionary accrual value. The study period starts from 2012 to 2015 using 39 companies as a research sample, with 156 observational data. Observation data is processed with panel data through Fixed Effect-Cross Section Weighted Method. This study gives results that family ownership positively affects audit fees and audit risk. Political relationships in the firm have a significant effect on audit risk, but no effect on audit fees. Furthermore, this study also proves that there is no influence of moderation of political relations on the influence of family ownership on audit cost and audit risk.

Ilham Akbar Muhammad (ilhamasudarya@gmail.com), Siti Nurwahyu Harahap (s.nurwahyu@ui.ac.id)

This study is aimed to examine the role of accounting information at venture capital investment in technology start-ups. The study is qualitative and exploratory in nature, collecting data from a series of interview with professional who works at venture capital firm in Indonesia. Discussion agenda is framed on three propositions: stewardship role of accounting information from existing financial statements; valuation role of accounting information from existing financial statements; and assessing the impact of undisclosed intangible assets to value of investments venture capital.  We find that accounting information no longer plays strong stewardship and valuation role, certainly in early-stage investment for venture capital investor. We also find  undisclosed intangible assets have positive impact on venture capital investment value .

Titi Suhartati (b_titis@yahoo.com), Chaerul D. Djakman (cdjakman@ymail.com), Elvia R. Shauki (elvia.shauki@icloud.com)

This study aims to explore the effect of the implementation of strategic corporate social responsibility on firm performance. The samples of the study are the manufacturing companies listed on the Indonesian Stock Exchange (BEI) in the period 2013-2014. Secondary data such as financial statements and annual reports are used to obtain research data. This study uses content analysis to obtain information regarding CSR strategic indicators in the annual report. Strategic CSR element used in this study consisted of proactivity and visibility. The results showed that strategic CSR has a significant influence on the company’s financial performance. These findings indicate that the company has been carrying out activities in line with the CSR Strategic objectives of the company and will increase the company’s performance. Strategic CSR is one of the fulfillment on the obligations of the companies to the government and society, not just the embodiment of moral or ethical obligation of companies to the social environment and society but have impact to the company’s performance.

Anindita Pinastika (aninditapinastika@gmail.com), Vera Diyanty (veranabila1@gmail.com)

This research aims to analyze the determinants of carbon emission disclosure. Determinant factors analyzed in this study are institutional ownership, foreign ownership, foreign directors, EMS ISO 14001 certification and social pressure. The study uses 555 observations from 185 samples of Indonesian’s public companies in natural resource and manufacture industry during the period 2013-2015. The result of this research shows that the average level of carbon emission disclosure is only 6.82% which indicates that the awareness about carbon emission issue is still low. The regression result shows that EMS ISO 14001 certification and social pressure have a significant positive effect on the carbon emission disclosure level, whereas institutional ownership, foreign ownership, foreign directors has an insignificant effect on the carbon emission disclosure level.  This  research  can  be  used  as  reference  for  regulator  to  create  some regulations regarding carbon emission issues to increase awareness of businesses about their emission.

Danny Lukito Wibowo (lukitodanny@gmail.com), Purwatiningsih Lisdiono (ipung31@yahoo.com)

This study aims to examine and analyze the influence of multinationality, tax havens utilization and corporate governance toward the practices of thin capitalization. This research uses quantitative approach by using data sample of 178 publicly listed companies in Indonesia Stock Exchange in year 2013-2015. The results showed that there is significant and positive association between the utilization of tax havens with the practice of thin capitalization practice using debt to equity ratio proxy. Conversely, companies that have the character of multinationality, the higher proportion of independent commissioners, the existence of institutional ownership, and big-4 CPA firm utilization has a significant and negative association with thin capitalization practice.

Suryadi – Winata (suryadiwinata@ymail.com)

The objective of this study is to investigate the role of ethical climate to influence the ethical intensity magnitude consequence of Certified CPA’s (CPA) in the Ethical Intention (third stage of Ethical Decision Making/EDM). The research samples used are 138 CPA’s. The hypotheses testing used was moderated regression analysis. The results show that ethical climate is important situation for strengthening ethical intention – magnitude consequence of CPA’s on ethical intention. Ethical climate are strengthening negative influence of magnitude consequence on ethical intention. Findings of this study conclude that ethical climate creations are important in the promotion on more negative influencing of magnitude consequence in ethical intention. Key words: Ethical climate, magnitude consequence, and CPAs’ ethical intention.

Fransisca Listyaningsih Utami (fransiscautami@yahoo.com), Siti Nurwahyuningsih Harahap (nung@cbn.net.id)

The purpose of this study was to conduct an internal control analysis of project budget realization based on COSO framework. This research is a qualitative research.The result of the research concludes that the internal control on the realization of project budget is very important in improving the project implementation because it can be seen the relationship between project financing consumption and the physical work completed with the expenditure so that the project objectives can be achieved by fulfilling 3 constraints ie timely, precise cost and quality.

Pungkas Hadiwibowo (pungkas.hadiwibowo@gmail.com), Indrayagus Slamet (taxindra@yahoo.com)

The purpose of this research is to analyze the treatment of Value Added Tax (VAT) on the delivery of coal by contractor of Generation III PKP2B. The subject matter is Directorate General of Taxation (DGT)/Indonesian Tax Authority through the Quality Assurance Team of Regional Tax Offices inconsistent in the imposition of VAT on the delivery of coal by Generation III PKP2B Contractor. The research is case study research. The research method used is direct observation, conversation analysis through interview and literature study. The results showed that the delivery of coal by Generation III PKP2B Contractor subject to VAT and coal is Taxable Goods. DGT must make improvements to the working procedures of the Quality Assurance Team of Regional Tax Office. DGT should make an assertion about treatment of VAT on the delivery of coal by Generation III PKP2B Contractor.  It is to realize justice, equality and legal certainty in tax collection. Amendment of the contract on the application of VAT policy, the researchers propose tax incentives of VAT set in the law.

Nina Marlina (nina.marlina85@gmail.com), Vera Diyanti (nina.marlina85@gmail.com)

This study aims to analyze what factors drive a Taxpayer to perform tax compliance, in this case the Tax Amnesty. Data collection is done by interviewing Taxpayers that participate in Tax Amnesty. The results show that the Taxpayer’s decision to participate in Tax Amnesty is influenced by economic and non-economic factors. Transparency of tax usage by the government, the amount of tax rate applicable, the Tariff of Ransom that is imposed if Taxpayers take the Tax Amnesty, and tax audit are economic factors that affect the Taxpayer’s decision. Knowledge of Taxes and Tax Amnesty, awareness of the benefits gained and the penalties to be received, simple Tax Amnesty and taxation law and system, the quality of the tax authority service, the change of government policy, and the influence of the social environment are non-economic factors that is also consideration of Taxpayers in doing compliance.

Aditya Prayatna (aditya.prayatna@gmail.com), Fitriany Amarullah (fitrianyamarullah@gmail.com)

Purpose of this research is to find empirical evidence about impact of pressure, opportunity, and rationalization (fraud triangle) to the level of accounting irregularities in Indonesia. The samples are taken from non-financial company that was proven to violate BAPEPAM’s rule during 2007-2013. It test all cases of BAPEPAM’s rule violation for the first sample and only financial statement’s violation cases for the second sample. Ordered logistic regression is used to test the hypothesis. This research found that probability of increasing level of accounting irregularities are affected by financial stability and financial target (pressure), nature of industry and ineffective monitoring (opportunity). The probability of increasing level of accounting irregularities are not affected by rationalization. This research found that investor should choose to invest in a company with good financial stability. Investors should be cautious when going to invest in companies that have high financial targets and ineffective internal controls.

Arifudin Miftakhul Huda (arifudinaye@gmail.com), Deddi Nordiawan (deddinordiawan@yahoo.com)

This research aims to reconstruct Indonesia’s intergovernmental transfer system in order to implement accrual base. The study identified problematical situation in that system using Contingency Model that consists of four moduls, those are stimuli, social structural variables, structural varibles of the politico-administrative system, and implementation barriers. Implementation of accrual base in intergovernmental transfer system is stimulated by the setting of governmental accounting standards which affects expectation of users of information and behaviour of producers of information. Those expectation and behaviour are also affected by the basic attitudes of users and producers of information. Basic attitudes of users of information are affected by political culture of budgeting that will raise the need of accrual based information. That expectation will encourage implementation of accrual base by producers of information. Basic attitudes of producers of information are affected by the number of accountant. Furthermore, implementation of accrual base faces implementation barriers, such as organizational charateristics, qualifications of accountans, and size of jurisdiction. This research gives some recommendation actions for improvement using Soft Systems Methodology, which steps are: reformulating the allocation system, effectiveness enhancement of data exchange between technical and accounting units, and quality enhancement of intergovernmental transfer’s reporting.

Bambang Sutopo (bbsutopo@yahoo.com), Trisninik Ratih Wulandari (trisninik_rw@yahoo.com), Arum Kusumaningdyah Adiati (arum_rk@yahoo.com), Dany Adi Saputra (saputradanyadi@gmail.com)

Local governments have the function to manage and deliver a range of quality services to their communities. In order to evaluate the execution of the function, the Minister of Home Affairs every year makes a decree on rating determination and status of performance of local government administration nationally. The decrees indicate that there are still many local governments that have moderate or low performance status. This study examines the effect of rating the results of Indonesia e-government ranking (e_Gov) and audit opinion on the performance of the local government administration. There are five dimensions used in the rankings of the e-government that is policy, institutions, infrastructure, applications, and planning. Source of performance data are the decrees on the local government performance of the years 2012, 2013, and 2014. Source of e_government data are e-government performance rating results conducted by and published at the website of Directorate of e-Government, The Directorate-General for Informatics Applications, Minister of Communications and Information Technology (Kemkominfo), and the source of audit opinion data is the summary of semester examination result (IHPS) published by the Audit Board of the Republic of Indonesia (BPK RI). The sample used in this study includes 246 local governments 2012-2014. Results of regression analysis indicate that rating the results of Indonesia e-government ranking (e_Gov) and audit opinion have positive effect on the performance of the regional administration. These results suggest that e-government and audit opinion can be used for evaluating the performance of local government.

Reisya Ibtida (resa.reisya@gmail.com), Bambang Pamungkas (Pamungkas62@yahoo.com)

The purpose of this paper is to design a risk-based performance audit program for Comptroller of Supreme Court of Indonesia by analysing the implementation of the existing audit plan process. This research is a qualitative research with descriptive analysis. The paper uses responses from the Comptroller of Supreme Court of Indonesia for analysing the existing audit plan process and uses responses from managers of court fee in five District Courts for analysing the court fee management. We further arrange risk register of court fee management using the audit reports and the responses in focus group discussion with risk owner. The results show that although the Comptroller of the Supreme Court has limited resources, the existing audit plan process doesn’t use risk basis as required by the Institute of Internal Auditor (IIA) Standard. Therefore, we propose to use the risk base for designing performance audit program. Specifically, we determine audit topic in periodic planning by scoring potential topics based on macro risk factors. The court fee topic gets the highest score so it is chosen as a performance audit topic. We further prepare the planning of performance audit assignment by analysing the court fee management, including assessing the risks in the District Court. Finally, this research produces a risk-based performance audit program in the face of resource constraints in Comptroller of Supreme Court.

Muthia Handayani (muthiahandayani1993@gmail.com), M Malik (malik01277@gmail.com)

This study aims to analyze business processes related to revenue and cash collection of PDAM Lematang Enim and aims to provide an internal control design of the business process. The method in this research is descriptive analysis in the form of case study. Data have been obtained through document analysis, observation, and in-depth interviews with informants such as general director, technical director, chief financial officer, and finance staff. The results show that there are some weaknesses of PDAM Lematang Enim management in optimizing the cash collection process from customers. These weaknesses have an impact on increasing value of receivables and the value of allowance of bad debt. The company has not implemented formal and structured internal controls, so business processes are only run and controlled by custom.

Adrianus Henri Hartanto (Adrianus.hartanto@gmail.com), Purwatiningsih Lisdiono (ipung31@yahoo.com)

This research is intended to analyze the impact of stakeholder power and company’s characteristics towards social and environmental disclosure using GRI G3.1 Guidelines on companies listed in SRI-KEHATI index released by Indonesia Stock Exchange during 2009 until 2012. There are 44 observations conducted (identical 11 companies per year) selected for this research using purposive sampling. Statistical test results using Fixed Effect method indicates that majority ownership, company size, and its own profitability possess positive relationship towards GRI G3.1 Guidelines Scoring. Other components tested in this research, such as government ownership, creditor power, auditor reputation, and industry type do not have significant influence towards social and environmental disclosure.

Aditya Aditya Aditya (dhitiacorps@yahoo.com), Ayuningtyas Hertianti (hertianti@gmail.com)

This research is a case study aimed to analyze the implementation of intangible asset accounting at the Ministry of Public Works and Public Housing (MoPWH), analyzing the weaknesses of intangible asset accounting implementation in the MoPWH, and providing solutions to overcome the weaknesses of intangible asset accounting implementation in the MoPWH. The analysis is done by comparing the conditions of the intangible asset accounting implementation in the MoPWH with the Government Accounting Standard Bulletin Number 17 on Accounting for Intangible Asset Based on Accruals. The results show that the weakness of the implementation of intangible assets in the MoPWH is in the stage of recognition, measurement, discontinuation and release, recording, presentation and disclosure. The results suggest that the implementation of intangible asset accounting can be improved by drawing up standard guidelines for the implementation of intangible asset accounting in the MoPWH, preparing standard operating procedures (SOP) for the implementation of intangible asset accounting in the MoPWH, improving the capacity of MoPWH employees and increasing the role of the Inspectorate General in the administration of intangible assets in the MoPWH.

Asrulsani Muhamad (asrulsani.m@gmail.com), Trisacti Wahyuni (trisacti_wahyuni@yahoo.com)

The purpose of this research is to assess the adequacy of the control design and propose improvements to Internal Control over Financial Reporting that can be utilized by the Directorate General of Taxes as a manager of tax receivables in support of transparency and accountability of the government financial statements. This research used qualitative method with case study approach with Directorate General of Taxes as unit analysis. The results show that the control design in the recording of tax receivables has not been fully effective. There are risks that identified and there are gaps in the control which could impact of potential misstatements, whether overstatement or understatement of tax receivables. Weaknesses are found in the tax receivable accounting policies that do not fully comply with the accrual principle, the issuance of tax provision that are still could be done manually, and the absence of data exchange portal between the Directorate General of Taxes and the Tax Court. To improve the condition, the researcher suggested to the Directorate General of Taxes to revise the accounting policy of tax receivable, using the application from the determination to the settlement of receivables, and develop the application with the Tax Court as the data exchange portal.

Darlin Aulia Aulia (darlin_aulia@yahoo.com), Sylvia Veronica Siregar (sylvia.vnps@gmail.com)

This study examines the effect of financial statement quality (FRQ), debt maturity, and Career concerns Of Directors to investment efficiency company in Indonesia.  This study is based on research Gomarez and Balesta (2014) on the quality of financial statements, debt maturity, and investment efficiency and Xie (2015) about careeer concerns of CEO. This research uses three measurement models for financial statement quality variable. The first uses the measurement model by McNichols and Stubben (2008) that uses discretionary income measurement. Then the uses measurements by Kaznik (1999)  discretionary accruals and the last uses the measurements by Dechow and Dichev (2002) accrual working capital. In measuring the debt maturity, the researcher uses short-term debt divided by total debt. This study uses 1600 observations from Indonesian companies listed on the Indonesia Stock Exchange during the period 2012-2015. This research extends the field of application of the quality of financial statements and the maturity of debt to investment efficiency in emerging markets such as Indonesia. The results show that the quality of financial statements, debt maturity and career concerns of the directors have an influence on investment efficiency, but the effect is differentiated in two scenarios underinvestment and overinvestment.

achmad fauzi fauzi (trezepiero82@gmail.com), Deddi Deddi Nordiawan (deddinordiawan@yahoo.com)

Disaster logistic management has became concern of several researchers such as Thomas and Kopczak (2005), Beamon and Kotleba (2006), and Wu (2015) recently. Futher more, the irregularities in the number, timing, and location of requests for disaster logistic assistance make this an attractive feature that must be met by existing disaster management systems (Beamon and Kotleba, 2006). In Directorate of Social Protection for Natural Disaster Victims (PSKBA), the logistic management administration is fully depent on alliance project with the local government. In order to ensure effective alliance are established, partner firms need to manage the risks that exist in the strategic alliance project (Das and Teng, 2001). This risk could be major factor that interrupt the effectiveness of disaster relief process. Using Soft Systems Methodology (SSM) (Checkland and Poulter, 2006), this study identifies several issues concerning the administration and control of disaster logistics inventory in several area such as administration activity, distribution activity, reporting activity, monitoring and evaluation monitoring, and other critical activity. Based on the literature developed by Thomas and Kopczak (2005) and Das and Teng (2001), these problems are solved by with the related parties at the Directorate of Social Protection of Natural Disaster Victims (PSKBA) by producing several agreements in order to optimize the process of administration and control of disaster logistic inventory by: the development of perceptions of understanding the disaster logistic management with the local authority through memorandum of understanding; implementation of the increased competence of disaster officers and monitoring and evaluation effectiveness through standardized training and formation of disaster management logistics management teams; and improvement of procedures in compilation of logsitik reports.

Hilda – Rossieta (enjum9@gmail.com)

This research aims to investigate whether Accountability has a role on the association between Fiscal Decentralization as well as Audit findings with Performance of local government in Indonesia.  The effect of Fiscal decentralization on Performance could be positive since Local Government has better knowledge about the local potential and needs (Lemmon and Ross, 2014). On the other hand, it also provides higher opportunity to corrupt (Liu, 2007; Tanzi, 1996; Ekasani, 2016). Hence, accountability is hypothesized as mediating variable which controls power discretion and prevent power abuse by executives. In addition, this research hypothesized that Audit findings have negative effect on Performance through Accountability. Using 720 entities years of Local Government data covering the period of 2011 and 2012, this research uses Structural Equation Modeling statistical techniques to test the hypotheses. Empirical suggest that previous year’s Accountability has mediating role on the positive association between Fiscal Decentralization and Performance, and also on the negative associations between Audit findings and Performance.

Hera Khairunnisa (hera.khairunnisa@gmail.com), Catur Sasongko (hera.khairunnisa@gmail.com)

This research is triggered by the internal auditor findings on cash disbursement cycle of Unit A. Internal auditor findings showed incompatibility between the implementation and design of internal control on the cash disbursement cycle. There are also findings of the excess of books purchased that stored in Unit A’s warehouse. This research aims to analyze and give suggestion on internal control system in cash disbursement cycle of Unit A by comparing components on the Committee of Sponsoring Organizations of the Treadway Commission (COSO) internal control framework that consisted of environment control, risk assessment, control activity, information and communication, and monitoring.  The method of analysis data is using qualitative analysis by gathering data with interview, document review, and literature review. This research result shows that there are weakness of all COSO internal control components of Unit A. However, the weakness is only found in the 9 principles out of 17 principles. Conclusion from control environment is that Unit A does not make formal restrictions on employee authorities, employees are not aware of the existence and function of operational standards, and there is no regular training for accounting department team. Conclusion from risk assessment is that the entity has no formal and written risk identification and has not considered the potential for entity fraud. Conclusion of control activities is that the entity has not implemented control activities in line with risk control. Conclusion of information and communication is that the entity does not have standard information on the completeness of supporting data cash disbursement transactions . Conclusion of monitoring is that the logistic manager has not conducted optimal monitoring of the process of receiving goods in the warehouse. Author try to give recommendation of the finding in this paper to enhance the internal control system in Unit A.   Keywords : Internal control system, cash disbursement cycle, COSO, Unit A

Leisha Wahyu Nurindahsari (leisha.wahyu@gmail.com), Trisacti Wahyuni (trisacti_wahyuni@yahoo.com)

The existence of agreements in the world to end all forms of discrimination and to achieve gender equity and gender equality encourages the implementation of GRPB (Gender Responsive Planning and Budgeting). This study aims to provide an overview of GRPB implementation in the Ministry of Finance. In addition, this study aims to determine the important factors in the implementation of GRPB and the steps must do in monitoring and evaluation of GRPB. This research method is qualitative method with case study approach. The case study conducted at Ministry of Finance which one of the GRPB drivers in Indonesia. The results indicate that an important factor in the implementation of GRPB is an understanding of the concepts of gender, gender mainstreaming, and GRPB. Other things that important are leadership commitments, political support, gender analysis tools, and the availability of disaggregated data. Inadequate monitoring and evaluation mechanisms are things that affect the quality of GRPB. Lack of understanding and commitment of the leadership are an obstacle in the implementation of GRPB. Improved understanding and adequate monitoring and evaluation processes will improve the quality of the GRPB prepared.

Putri Paramita Agritansia (pagritansia@ugm.ac.id), Nur Isnaini Masyithoh (isna.masyithoh@gmail.com)

The aim of this research is to examine the relationship between corporate governance variables (i.e. audit committee independence, foreign ownership, foreign directors, and director independency) and corporate social and responsibility (CSR) disclosures in ASEAN. The increasing stakeholders’ needs of corporate accountability demand corporations to practice good corporate governance and corporate CSR disclosures. Many research have been conducted to examine the correlation between corporate governance and corporate CSR disclosures. However, that research only focuses on individual country characteristic. With ASEAN integration has been implemented, this research is also meant to test the generalizability of previous research to regional context of ASEAN. With ASEAN corporations operate in unique and diverse characteristics, the relationship between corporate governance variables and corporate practice of CSR disclosures unclear. The sample of this research is corporations listed in FTSE 49 ASEAN Value Stock Index. Both the annual reports and/or CSR reports of those corporations are examined. In examining how corporate governance variables affect CSR disclosures, STATA 14 is utilized. This research finds that, together, corporate governance variables affect corporate practice of CSR disclosures in ASEAN. In countries which CSR disclosures are mandatory, only foreign ownership positively affects CSR disclosures. Whereas, for countries that implement voluntary disclosures, only some control variables (i.e. return on asset, age of corporation, corporate size) that individually affects CSR disclosures, and not the individual independent variables.

Teguh Setiyono (vandegooh@gmail.com), Fitriany Amarullah (fitrianyamarullah@gmail.com)

Research aimed to analyze factors affecting customs audit findings. Those factors consist of two categories, namely taxpayer dimension (customs value) and auditor dimension (education, experience, religiosity, and wealth). Based on 378 samples of audit report, research concluded that customs value, education, experience, dan religiosity of the auditor affect to the customs audit findings. Experience has negatively moderated the effect of the customs value to the customs audit findings, while religiosity has positively moderated that effect. Result implied that Directorate General of Customs and Excise (DGCE) needs to rotate auditor in the assignment and encourage auditor to take continous formal education.

Ronny Prabowo (r.prabowo@rug.nl), Paula van-Veen Dirks (p.van.veen-dirks@rug.nl), Reggy Hooghiemstra (r.b.h.hooghiemstra@rug.nl)

Using the socioemotional wealth perspective, we predict that family firms exhibit greater cost stickiness than non-family firms because family firms are less inclined to reduce costs during a sales decline in order to avoid a loss of their socioemotional wealth. More specifically, we predict that only family firms with a high percentage of family ownership, family CEOs, and a high proportion of family directors exhibit greater cost stickiness than non-family firms. Finally, we hypothesize that the change in the cost ratio of family firms is negatively associated with future earnings change. Our empirical results are generally consistent with these predictions. As such, our study suggests the importance of the socioemotional wealth perspective in explaining family firms’ cost stickiness relative to non-family firms. Also, we show that more direct family influence like a high percentage of family ownership or family CEO influences the degree of family firms’ cost stickiness. Finally, we suggest that cost stickiness driven by the socioemotional wealth preservation motive produces an increase in the cost ratio that leads to a negative future earnings change.

Nurfasti Dwi Nugraheni (nurfasti.nugraheni@gmail.com), Christine Tjen (indivara_devi@yahoo.com)

This study aims to understand the underlying considerations of the Tax Court decisions of PT A and PT B related to identification of existence and validity of the royalty payments on technology (know how) and trademark also the conformity of those decision with the arms length principle in the OECD Transfer Pricing Guidelines. This study also purpose to determine whether the distributor company could treated the royalty payment on technology (know how) and trademark as deductible expenses. This research uses a qualitative approach with descriptive research type. The results of this study conclude that the difference on tax court decision of PT A and PT B related to royalty payment technology (know how) and trademarks is due to: (1) the results of identification on existence and validity of royalty payments through examination on legal agreements, (2) proof of the substance and economic benefits on utilization of intangible property, and (3) proof that there is no double taxation imposed on the payment of compensation for the utilization of intangible property. The implementation procedures for the arm’s length principle also have been made in accordance with OECD Transfer Pricing Guidelines in order to resolve transfer pricing disputes.

Aqil Ardiansah (ardiansah.aqil@gmail.com), Sudarto Sudarto (sudartodwi@gmail.com)

This study aims to analyze the use of Benford’s Law in the planning of state finance audit with a case study on audit of financial report of central government (LKPP) year 2015. The analysis is conducted quantitatively through first digit test, second digit test, and first two-digit test of Benford’s Law over 8.385.414 records of central government expenditure transactions in 2015, and logistic regression modeling to predict the presence of expenditure-related findings based on the financial audit report (LHP) of supreme audit agency (BPK) of LKPP year 2015. Quantitative analysis results are then supplemented by qualitative analysis through in-depth interviews with some related parties to provide additional information required. This study demonstrates that the use of Benford’s Law is able to provide a red flag for the possibility of expenditure-related findings during examination, which later can be used as one of the variables in assessing the control risk of an entity when planning the audit.

Herlina Helmy (lynnherlin@gmail.com), Sany Dwita (sany.dwita@gmail.com), Charoline Cheisviyanny (charoline.cheisviyanny@gmail.com)

This study examines the effect of financial performance and industry type on impression management in the Management Discussion and Analysis (MD&A) report of the State-Owned Enterprises (SOEs) Annual Report. Two hypotheses were developed to explain the impression management practices in SOEs by focusing on financial performance and industry type. Data of this research were collected by conducting content analysis on the Discussion and Analysis of Management section. The sample of this research is 20 SOEs listed in BEI year 2013-2014. In this study, impression management practices in SOEs are indicated by the length of management narrative on the MD&A report presented. Data analysis technique used parametric and nonparametric test, that is independent sample t-test and Mann-Whitney u test. The findings of this study indicate that there is no difference in the intensity of impression management practices in management narratives between SOEs performing negatively and positively. Furthermore, the findings of this study indicate that there is a difference in the intensity of impression management practices on management narratives between SOEs service industry and manufacturing.

Ari Kuncara Widagdo (Widagdo2002@yahoo.com), M. Yudhika Efiri (yudhikaelrifi@gmail.com), Hardo Basuki (Widagdo2009@gmail.com)

The aim of this study is to examine the necessity of conflict accountability in public sector organizations, particularly the Non-Governmental Organization (NGO). Specifically, the purpose of this study is to identify the different types of accountability requirements and to determine whether the pressure of accountability requirements affects on job performance accountability of NGO employees. Institutional theory, in particular institutional isomorphism is used as a theoretical basis for the explanation of the findings. This study employs mixed methods. In the quantitative phase, this study uses the Partial Least Square (PLS). In subsequent analysis,  thematic content analysis (TCA) is used to analyze and interpret data qualitative. The results using quantitative analysis shows that job performance accountability in the NGO actors are partly influenced by the perceived negative working context in the form of workload and work pressure. These results are supported also from qualitative analysis through interviews.

Putri Amalia (putri.amalia31@ui.ac.id), Dodik Siswantoro (dodik.siswantoro@ui.ac.id)

The accounting records system currently switched to computerized systems with development of information systems. This study aims to analyze the use of Financial Management Information System (SIPKD) used by the Provincial Government of DKI Jakarta and compare the reports generated by the characteristics of the quality of financial statements under Government Accounting Standards (SAP). This research taking samples of five departments in the Provincial Government of DKI Jakarta which have the highest budget in the 2016. The results showed that the use of these systems interconnected between one link to another link and show that the resulting financial statements are under the quality criteria of financial reporting according to SAP.

Gina Rusdina (gina.rusdina@gmail.com), Fitriany Amarullah (fitrianyamarullah@gmail.com)

This study aims to examine whether review/audit have impact on the information content of interim financial statements and whether the auditor size strengthen the relationship between review/audit with the information content of interim financial statement in Indonesia. Information content proxied by AVAR (abnormal return volatility) and AVOL (abnormal trading volume volatility). Regression using 3.234 interim financial report from 2013-2015, we found that there is a positive significant relationship between review/audit with the information content of interim financial statements that proxied by AVAR and not for AVOL. Audit quality cannot strengthen the impact of review/audit on interim financial statement information content. It means, market do not differenciate between interim reporting that reviewed/audited by Big4 or non Big4. Theories said that review/audit may affect the information content of interim financial statements through assurance value and signaling value. This research found that reviews/audits affect the information content of interim financial statements through signaling value, not through assurance value. It means that review/audit on interim financial reporting is only as a signalling value, not as assurance value. This research also find that audit have higher level of confidence than review of interim financial reporting.

Valentina Tohang (val.tohang@gmail.com)

This research aims to test the impact of the mandatory adoption of XBRL towards the systemic risk of American financial institutions listed in New York Stock Exchange (NYSE) by utilizing 45 NYSE listed financial institutions for the time period of 2007-2012. The measure of systemic risk is based on SRisk by Acharya et al. (2012) which is available in the NYU Stern V-Lab. XBRL is a dummy variable, in which 0 represents a pre XBRL adoption period (2007-2008) while 1 represents an XBRL reporting environment (2011-2012). It is further interacted with Corporate Governance, which is measured using an index developed by Brown & Caylor (2006). The result proves that XBRL do not significantly impact systemic risk of financial institutions listed in NYSE. The findings have been determined after having controlled firm size, capital ratio, leverage ratio and performance.

Dodik Siswantoro (dodik.siswantoro@ui.ac.id)

The paper seeks to analyze the relevancy of Prophet Muhammad PBUH’s type of governmental budget to Indonesian current context whereby Muslim constitutes the biggest population. At the early stage of development, Islam grew and spread rapidly after the Prophet moved to Medina from Mecca. At that time, the spread of Islam was indirectly supported by budget. It only took 10 years from scratch for a prophet to battle with the Roman emporium. The research method of this paper is a qualitative with post-positive paradigm. Data is collected from secondary source and discussion of specific issues in news media. The results show that some such components of public budget as ghanima (war booty), fai (booty), and jizya (non-Muslim tithe) need to be modified to Indonesian context. However, other countries have applied ghanima and fai in different ways. Meanwhile, such other practices as zakat (tithe) and sadaqa(charity) are still relevant to support Indonesian economic development.

Dodik Siswantoro (dodik.siswantoro@ui.ac.id)

This research aims to analyze supporting factors of well-being in Umar bin Abdul Aziz (UAA) period and compare them to Indonesian current practice. This would compare the inexistence of poverty in Umar bin Abdul Aziz period supporting factors to Indonesian condition. Umar only ruled for 29 months but at that time poor people were hard to find. The research applies qualitative method with post-positivist paradigm. Data is taken from literatures, related information, and internet resources. Umar bin Abdul Aziz’s well-being requirements would be analyzed and compared to Indonesian current practices. The well-being of Umar bin Abdul Aziz indicator was inexistence of poverty. Some government programs had been indiscriminately proposed to the benefit of all people including non-Muslims. Comparatively, In fact such proposed requirements as in the age of Umar bin Abdul Aziz have not been adequately satisfied in Indonesia. Therefore, focusing on poverty eradication in the government is a mandatory requirement of UAA indicator.

Sylvia Veronica Siregar (sylvia.veronica@ui.ac.id), Chaerul Djusman Djakman (cdjakman@yahoo.com), Aria Farahmita (aria.farahmita@gmail.com), Agustin Setyaningrum (agustin.setyaningrum@gmail.com)

The purpose of this study is to examine the perception of practitioners, auditors, and academic about important issues on IFRS convergence in Indonesia as well as the plan to fully adopt IFRS in Indonesia. Indonesia is one of the emerging countries with distinct features that could shed some lights on IFRS convergence issues. The level of respondents’ familiarity with IFRS as well as IFRS convergence in Indonesia is quite good. There are several challenges in IFRS convergence in Indonesia, namely complexity to measure fair value, complexity of IFRS-based accounting standards, and tax and accounting standard differences. Regarding the plan to fully adopt IFRS, respondents in average agree that the most significant benefit of IFRS full adoption is IFRS create uniformity in global financial reporting. However there are several obstacles: lack of education, understanding, and experience by preparers of financial reports with the use of IFRS-based, coordination and collaboration among global regulators, and required changes in accounting standards. Majority of respondents do agree that Indonesia fully adopt IFRS and they stated that it will take least 3-5 year for Indonesia to fully adopt IFRS.

Christy Tarigan (christy.tarigan@gmail.com), fitriany amarullah (fitrianyamarullah@gmail.com)

This study aims to examine whether implemented in corporate governance affect firm’s credit rating . With a sample of 168 firms listed in Indonesia Stock Exchange (IDX) during 2009-2013, this study finds that implemented in corporate governance affect on firm’s credit rating and the components positively affect are board size, institutional ownership, audit committee, and external auditor. While proportion of outside director and size of blockholders negatively affect firm’s credit rating. This study also finds that independent commissioner insignificantly associated with firm’s credit rating. This research found the number of directors have inverted quadratic “U” shape relation with credit ratings with maximum point at 4,589. The higher the number of directors will make the credit rating higher, because the monitoring and decision making will be more effective (indicated by positive number of director’s coefficient). However, when it reaches the optimum point, additional number of directors will cause a decrease in management performance (indicated by negative quadratic directional coefficients) because they will experience coordination problems. These results illustrate that the number of directors who can increase the credit rating of the company is only 4,589 (about 4 or 5 people), if exceeding that amount, will lower the credit rating of the company.

Galih Seta Perdhana (galihseta@live.com), ancella anitawati hermawan (ancella_hermawan@yahoo.com)

This research aims to provide empirical evidence regarding the effect of capital structure, family ownership, and the effectiveness of board of commissioners and audit committee on the efficiency in manufacturing company. Efficiency is measured by Data Envelopment Analysis (DEA) score, while the effectiveness of board of commissioners and audit committee are measured by effectiveness measurement method which was developed by Hermawan (2009). The hypothesis are examined using panel data regression with fixed effect method to a sample of 100 manufacturing companies listed in Indonesian Stock Exchange during 2008 to 2012. The result of this research concludes that companies with higher leverage could gain higher efficiency in their operation. The companies with higher effectiveness of board of commissioners also could gain higher efficiency in their operation. Meanwhile, family ownership and the effectiveness of audit committee have no significant impact to efficiency in the companies.

Silvony Gathrie (silvonygathriem@gmail.com), ancella anitawati hermawan (ancella_hermawan@yahoo.com)

This study aims to determine whether the effect of the size and independence of the board of commissioners as well as the existence of an audit committee on the quality of internal control ultimately affect earnings management in state-owned enterprises (SOEs). The quality of internal control is assessed based on the number of audit findings while earnings management is calculated using Jones model (1991). Hypothesis testing was analyzed using Partial Least Square Path Analysis with a sample of 28 state-owned companies in 2009 audited by the Supreme Audit Board (BPK). The results of this study indicates that the independence of the board of commissioners and the existence of an audit committee strengthen the quality of internal control and mitigate the opportunity to do earnings management.

Fitriany Amarullah (fitrianyamarullah@gmail.com), Louis bernardus (Louis.bernardus@gmail.com)

Purpose This study investigates the effect of abnormal audit fee on audit opinion of listed companies in Indonesian Capital Market. Wheather opinion shopping does exist in Indonesia?   Design/methodology/approach Using a sample of  Indonesia’s non-financial listed companies for the period 2009-2012. Abnormal audit fees is the difference between actual audit fees paid to the auditor and the expected normal level of fees that should have been charged for the audit engagement effort. Regression technique which was used is ordered logit and continued by mfx testing and predicted probabilities.   Findings The study shows that an increase in abnormal audit fee leads to a higher probability of better audit opinion given by the auditor; and therefore, opinion shopping does exist in Indonesia. Furthermore, this study also found that increasing in abnormal audit fee would increase the probability of the company to obtain unqualified audit opinion. This showed that there were indications of abnormal audit fee influences the audit opinion in the form of opinion shopping that increased auditor dependence on their client and decrease the independence of auditor. Implication This research provides advice for regulators to encourage mandatory disclosure on audit fee. Based on available data, it is evident that the company which involved in the practice of opinion shopping, where companies seek to maintain or gain a better opinion. Audit fee which was not disclosed allows companies to take these actions more freely, without any control from stakeholders. Opinion shopping practices are harmful for the capital market condition because it can eliminate the trust of stakeholders on assurance services.

Hilda – Rossieta (enjum9@gmail.com)

This study is aimed to investigate whether environmental performance is valuable for investor. Hypothetically, lower environmental performance associated with higher litigation and sustainability risk,  therefore, investors would ask return premium for low environmental performance, and vice versa. This research look at two types of investors : debtholders and equity-holders, who concern on cost of debt and cost equity respectively. As for  environmental performance, this study rever to the results of Companies’ Performance Rating Assessment Program (Program Penilaian Peringkat Kinerja Perusahaan – PROPER) conducted by Indonesian Environmental Ministry. 52 PROPER member firms which are listed on Indonesia Stock Exchange during the periode of 2011 to 2015 are used as research sample. The empirical result shows that environmental performance is positively associated with cost of debt. This research finds no association between environmental performance and cost of equity. Hence, in general, environmental performance does not valued by investors of Indonesian listed companies.

Mazri Khairi Faiz (khairifaiz_mazri@yahoo.com), Ismail Rina Fadhilah (rinafadhilah@puncakalam.uitm.edu.my), Arshad Roshayani (roshayani@salam.uitm.edu.my), Kamaruzaman Siti Aisyah (aisyah9985@salam.uitm.edu.my)

The growth of Shariah compliant companies in Malaysia has played great contribution towards the stabilisation of Islamic Capital Market (ICM). Thus, this study intends to examine the nature and extent of Islamic social reporting practices among ACE Market’s Shariah compliant companies in Malaysia. Besides, this study also examines whether there is a relationship exists between corporate governance attributes and Islamic social reporting. This study focuses on four components of corporate governance attributes: Shariah supervisory board, Audit quality, Audit committee and Muslim Ownership. Samples of 78 Shariah compliant companies listed under ACE Market of Bursa Malaysia are selected. A content analysis is used and Islamic social reporting is coded according to a modified Islamic Social Disclosure Index. The results indicate significant relationships between two corporate governance attributes of board size and audit committee; and Islamic social reporting. This might be due to the benefits of having more board members with various expertise and experience in making better reporting decisions. The role of audit committee acts as watchdog to the management may encourage better reporting transparent in the annual reports. Thus, the findings would help to strengthen the relevant parties such as regulators, practitioners and potential investors understanding of effective governance attributes among growing companies in Malaysia.

Kevin Ow Yong (kevinowyong@phbs.pku.edu.cn)

This study examines the economic implications of fair value liability gains and losses arising from the adoption of SFAS 159. Consistent witht he notion that gains and losses contain value-relevant information, we find a positive correspondence between a firm’s FAS 159 fair value liability gains and losses and current period stock returns.

Mustaffa Mohamed Zain (dmustaff@salam.uitm.edu.my), Faizah Darus (faizahd2@yahoo.com), Haslinda Yusoff (hasli229@salam.uitm.edu.my), Aliza Ramli (aliza1412@yahoo.co.uk) , Azlan Amran (azlan_amran@usm.my), Mustaffa Mohamed Zain (dmustaff@salam.uitm.edu

Waqf has the potential to function as a mechanism towards improving the welfare of the ummah. Even though waqf has been long practised in all Muslim countries, each country has different methods of implementing it. Issues pertaining to waqf have become the most talked about agenda among Muslim scholars, administrators, and academics, particularly, the deficiencies of the conventional model and the lack of knowledge among practitioners, which has led to the mismanagement of waqf assets. The need to expand the conventional Waqf concept into business practices in achieving Islamic transformation agenda and wealth creation is, therefore, crucial. The aim of this study is to explore a holistic corporate waqf model to be used by organisations to address social issues and to create wealth for the ummah. A Tawhidic concept premised on the Quran and Sunnah was used to underpin the development of the proposed corporate waqf model. Content analyses of existing academic literature on Waqf, followed by preliminary semi-structured interviews, were conducted to provide a framework for the development of the corporate waqf model. The findings from this study would be of interest to academics, regulators, and practitioners in our quest to improve the existing waqf model of income distribution to maximize wealth for the ummah through a more efficient and effective wealth management system of governance and accountability.

Abdul Khalik Sapari (nafsiah793@salam.uitm.edu.my), Nafsiah Mohamed (nafsiah793@salam.uitm.edu.my), Norimah Amin (Norimah.Amin@sabah.gov.my)

Malaysia is in the process of implementing accrual accounting and targeted will fully adopted accrual accounting by 2020 as our Prime Minister Dato’ Seri Mohd Najib Bin Tun Razak mentioned. As for current practice, Malaysian Government still using modified cash basis to account all government financial transactions including thirteen (13) states government in Malaysia. The focus of the study will be Sabah State Government which is still using modified cash basis. The evolution and reform of public sector accounting to accrual accounting makes Sabah State Government need to be prepared and aligned with Federal Government vision and policy. The objectives of this study are to determine the challenges in implementing accrual accounting and to find out what initiatives have been taken by Sabah State Government in implementing accrual accounting in Sabah State Government. The method of research in this study is by way of interviewing senior officers in Sabah State Treasury Department, Computer State Services Department and National Audit Department (Sabah Branch) that involved directly in the discussion and process of implementing accrual accounting in Sabah State Government.. The findings from this research showed that human resource, accounting information system, training, top management commitment, cultural in public sector and policy become challenges in implementing accrual accounting in Sabah State Government. This study is significance to help Sabah State Government in identifying all the challenges in implementing accrual accounting to reduce the impact from implementation of accrual accounting and as a literature from the view of practitioners

Haslinda Yusoff (hasli229@salam.uitm.edu.my), Afaf Izzati Nafhah Radzi (izzati901@sarawak.uitm.edu.my), Faizah Darus (faiza634@salam.uitm.edu.my)

An organization’s strategic decision on environmental disclosure practice has a potential in enhancing its competitive advantage. The objective of this study is to examine the possible link between the quality of environmental information disclosed and organizational value creation. Content analyses of the 2014 annual and sustainability reports of ninety (90) ISO 14001 certified companies have been undertaken. All data gathered were analysed using multiple regression analyses. The multiple regression analyses were employed for hypotheses testing. The descriptive analysis reveals that generally the disclosed environmental information are general and qualitative in nature. Thru the multiple regression analyses performed, a positive and significant relationship between the quality of environmental disclosure and value creation has been found. Such a finding hints the capability of environmental disclosure practice in enhancing organizational value creation i.e. both the financial and non-financial aspects. A great extent of environmental disclosures may inform and facilitate company’s stakeholders thus resulting in value being created for the organizations.

Faizah Darus (faiza634@salam.uitm.edu.my), haslinda Yusoff (hasli229@salam.uitm.edu.my), Yussri Sawani (yussrii@sarawak.uitm.edu.my), Tamoi Janggu (tamoi@sarawak.uitm.edu.my) , Mustaffa Mohamed Zain (dmustaff@salam.uitm.edu.my)

Businesses nowadays are expected to comply with societal values to ensure business sustainability. The social issues in the workplace, community, and marketplace require proper management to avoid such issues becoming a social risk that could affect the reputation and tarnish the corporate image. The aim of this study is to examine the disclosure of social information by plantation companies in Malaysia and Indonesia for a two-year period (2012 and 2014). Content analyses of the annual and sustainability reports of forty (40) public-listed companies in Malaysia and fourteen (14) public-listed companies in Indonesia were undertaken to evaluate the quantity and quality of social information provided. The location of social information in the annual and sustainability reports, the extent of information disclosed and the changes in disclosures between the two years form the basis of the investigation. The results of the study revealed that regarding the location of information, Malaysian companies were moving from disclosure in the general section of the report to specific type information in the specific sections of the annual reports. However, the reverse trend was observed for the Indonesian companies. Overall, the Indonesian companies had a higher disclosure for all key elements for the two-year period as compared to the Malaysian companies. The quality of information provided by the companies in both countries for the two years, however, can be further improved regarding extensiveness of the disclosure. The overall upward trend of social information provided suggests that companies in the sensitive industries such as the plantation industry are concerned about the social issues that they faced and are taking the initiatives to manage these issues to ensure they remain incongruent with societal expectations.

Fazliza Mohd Kasim, Natrah Saad (natrah@uum.edu.my)

This study examines the determinants of multinational corporations (MNCs) tax avoidance by looking at their effective tax rates (ETRs). This study utilized the tax return form data from the Inland Revenue Board Malaysia (IRBM) to model ETRs of the MNCs in Malaysia, as a proxy of the tax avoidance. The findings suggest that MNCs in Malaysia can be associated with the tax avoidance since their ETRs are below the statutory tax rates (STRs) as stipulated under the Income Tax Act 1967. The results also suggest that firm’s size, profitability, extensiveness of foreign operation, capital intensity and leverage are the determinants of the tax avoidance of MNCs in Malaysia.

Putri Paramita Agritansia (pagritansia@ugm.ac.id), Mahfud Sholihin (mahfud@ugm.ac.id), Poppy Dian Indira Kusuma (poppyindiraadji@gmail.com)

Research aims: This study aims to shed light on the role of pay schemes and individual factor (i.e. long-term orientation) play in influencing managers’ ethical judgments on corporate social responsibility (CSR) overinvestment. Built on an egocentric concept, this study predicts that managers employed under different pay schemes and with different levels of long-term orientation will make different ethical judgments on CSR overinvestment.

Design/Methodology/Approach: This is an experimental research with 99 students participating as subjects. In this study, the pay scheme variable was manipulated into two types, i.e. an overinvestment-inducing pay scheme and an overinvestment-hindering pay scheme. In measuring manager’s long-term orientation, this study adopts Bearden et al.’s (2006) measurement.

Research findings: This study finds evidence that managers with an overinvestment-hindering pay scheme are more likely to consider overinvestment in CSR as more unethical than those employed under an overinvestment-inducing pay scheme. This study also finds that managers who have a higher long-term orientation are more likely to judge overinvestment in CSR as unethical. Those results provide an understanding that economic incentives and individual factors influence managers’ ethical judgments. The results imply that pay schemes and managers’ individual factor are imperative for managers’ investment decisions and ethical judgments.