CEO Duality, Ownership, and Readability of Financial Statement Footnotes: Some Evidence from Indonesia

This study examines the association between CEO duality, CEO ownership and financial footnotes readability. The data were collected from 1,469 non-financial firms listed on the Indonesian Stock Exchange (IDX) between 2010 and 2018. Using ordinary least squares (OLS) regression, this study unveiled a negative and significant relationship between CEO duality and financial statement footnotes. In addition, the relationship between CEO ownership and financial statement footnotes is positive and significant. Furthermore, this indicates that CEO duality expands the embarrassment and provokes opportunistic behaviour from the CEO to prioritize personal interests by exploiting potential company resources to weaken the independence of the CEO. Hence, the readability of financial footnotes is undecipherable. On the other hand, CEO ownership is more responsible for improving corporate performance, so more financial statement footnotes are readable. Therefore, this study contributes to the literature on seeking the understanding of the readability of a firm's written communication in emerging countries

PENGARUH AGGRESSIVE DAN LESS AGGRESSIVE EARNINGS MANAGEMENT TERHADAP READABILITY LAPORAN KEUANGAN TAHUNAN (Studi Empiris pada Perusahaan yang Terdaftar di Bursa Efek Indonesia Tahun 2014-2016)

Tujuan dari penelitian ini adalah untuk mengetahui pengaruh tingkat earnings management terhadap readability (keterbacaan) laporan keuangan tahunan perusahaan yang tercatat di Bursa Efek Indonesia. Penelitian ini menggunakan sampel 405 pengamatan dari 216 perusahaan yang terdaftar di Bursa Efek Indonesia dari tahun 2014 sampai 2016 untuk memeriksa bagaimana pengaruh tingkat earnings management terhadap readability (keterbacaan) laporan keuangan tahunan. Kemudian 405 pengamatan tersebut dipecah menjadi 203 pengamatan untuk perusahaan yang aggresive earnings management dan 202 pengamatan untuk perusahaan yang less aggressive earnings management. Dan di analisis dengan Ordinary Least Square Regression dengan Software stata 14.0. Pada perusahaan yang melakukan earnings management secara aggressive memiliki tingkat keterbacaan yang lebih rendah dari pada perusahaan yang melakukan less aggressive earnings management, yang artinya perusahaan yang melakukan earnings management secara aggressive memiliki laporan keuangan yang sulit dipahami dibanding dengan perusahaan yang melakukan less aggressive earnings management. Hal ini memberikan implikasi kepada para pemangku kepentingan bahwa ada beberapa informasi penting yang sedang disembunyikan oleh manajemen untuk mengaburkan kinerja perusahaan yang sesungguhnya

Family Involvement with MD & A (Management Disclosure & Analysis) Readability Level

This study aims to examine the relationship between family involvement and the readability level of the MD & A (Management Disclosure & Analysis) released by the company. This study uses 1795 final samples from firms listed on the Indonesia Stock Exchange in the period 2010-2018. We tested the research hypothesis using ordinary least square regression (OLS). This was done using the Stata software by adding a fixed effect for industry diversity in order to strengthen the study results. This study used two proxies of the family firm where there is the involvement of family members at the management level and related to the ownership of company shares. Both of these proxies show consistent results indicating that family firms tend to release less readable MD&As. Furthermore, the language differences were also tested in this study. Apart from the presentation of the MD&A in English or Indonesian, family firms still present reports with lower readability. This study provides a perspective to the authorities regarding the family firm's governance intended to help improve existing regulations