JEFMS Journal

ABSTRACT:

The integrity of financial statements is related to one of the characteristics required by IFRS, namely faithful representation. The financial statements that are presented must contain information that is relevant and reliable so that it has high integrity and can be used by stakeholders in making decisions. In reality, realizing the integrity of financial statements is a difficult thing. There have been several cases that cast doubt on the level of integrity of financial statements. One of them happened to PT Jiwasraya (Persero) recently. This research is aimed to examine the effect of corporate governance mechanisms proxied by (institutional ownership, proportion of independent commissioners, and audit committee meetings) and leverage on the integrity of financial statements using a conservatism index approach in the market book value. Firm size as a control variable. The population is BUMN listed on the Indonesia Stock Exchange from 2016 to 2018 with a sample of 22 companies. The data analysis method used is panel data regression. The results of the common effect model test that only the audit committee meeting variable has a significant influence on the integrity of the financial statements, while the variable institutional ownership, the proportion of independent commissioners and leverage has an effect but is not significant on the integrity of the financial statement

KEYWORDS:

Corporate Governance Mechanism, Leverage, Size, Market Book Value

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