JEFMS Journal

ABSTRACT:

This research aims to examine the influence of competition on accounting conservatism through corporate governance. Accounting conservatism is measured using the market to book ratio approach, corporate governance is measured by the Corporate Governance Self-Assessment and competition is measured by the Lener Index. The population in this study was 35 banking companies listed on the Indonesian Stock Exchange. The sampling technique used was Purposive Sampling, resulting in a sample size of 6 companies which were book category 4 banks. The model used in this research was panel data regression using SPSS version 24. The results of this research show that competition influences accounting conservatism and corporate governance. Corporate governance influences accounting conservatism.

KEYWORDS:

Accounting conservatism, corporate governance, competition

REFERENCES:

1) Ahmed, A.S., & Duellman, S. (2007). Accounting conservatism and board of director characteristics: An empirical analysis. Journal of Accounting and Economics, 43(2–3), 411–437. https://doi.org/10.1016/j.jacceco.2007.01.005

2) Beaver, W.H., & Ryan, S.G. (2000). Biases and Lags in Book Value and Their Effects on the Ability of the Book-to-Market Ratio to Predict Book Return on Equity. Journal of Accounting Research, 38(1), 127. https://doi.org/10.2307/2672925

3) Chou, J., Ng, L., Sibilkov, V., & Wang, Q. (2011). Product market competition and corporate governance. Review of Development Finance, 1(2), 114–130. https://doi.org/10.1016/j.rdf.2011.03.005

4) Demirguc-Kunt, a, & Martinez Peria, M. (2010). A framework for analyzing competition in the banking sector: an application to the case of Jordan. World Bank Policy Research Working Paper Series, Vol, December.

5) Dhaliwal, D., Huang, SX, Khurana, IK, & Trulaske, RP (2011). Product Market Competition and Conditional Accounting Conservatism. Https://Medium.Com/. https://medium.com/@arifwicaksanaa/pengertian-use-case-a7e576e1b6bf

6) García Lara, J.M., García Osma, B., & Penalva, F. (2009). Accounting conservatism and corporate governance. Review of Accounting Studies, 14(1), 161–201. https://doi.org/10.1007/s11142-007-9060-1

7) Karuna, C. (2011). Industry Product Market Competition and Corporate Governance. SSRN Electronic Journal, June, 1–68. https://doi.org/10.2139/ssrn.1270972

8) LaFond, R., & Watts, R.L. (2008). The information role of conservatism. Accounting Review, 83(2), 447–478. https://doi.org/10.2308/accr.2008.83.2.447

9) Leventis, S., Dimitropoulos, P., & Owusu-Ansah, S. (2013). Corporate governance and accounting conservatism: Evidence from the banking industry. Corporate Governance: An International Review, 21(3), 264–286. https://doi.org/10.1111/corg.12015

10) Mohammed, NF, Ahmed, K., & Ji, XD (2017). Accounting conservatism, corporate governance and political connections. Asian Review of Accounting, 25(2), 288–318. https://doi.org/10.1108/ARA-04-2016-0041

11) Nasr, M. A., & Ntim, C. G. (2018). Corporate governance mechanisms and accounting conservatism: evidence from Egypt. Corporate Governance (Bingley), 18(3), 386–407. https://doi.org/10.1108/CG-05-2017-0108

12) Prabaningrat, IGAA, & Widanaputra, AAG (2015). THE INFLUENCE OF GOOD CORPORATE GOVERNANCE AND ACCOUNTING CONSERVATISM ON PROFIT MANAGEMENT I Faculty of Economics and Business, Udayana University (Unud), Bali, Indonesia. Journal of Accounting, 3(8), 663–676.

13) Purwasih, D. (2020). The Effect of Corporate Governance Mechanisms, Company Size and Debt to Equity Ratio on Accounting Conservatism. JABI (Indonesian Sustainable Accounting Journal), 3(3), 309. https://doi.org/10.32493/jabi.v3i3.y2020.p309-326

14) Setiawati, L., & Naim, A. 2001. Bank Health Evaluation by Bank Indonesia and Earning Management in Banking Industry. Gadjah Mada International Journal of Business, 3.

15) Wardhani, R. (2008). The Level of Accounting Conservatism in Indonesia and Its Relation to the Characteristics of the Board as One of the Corporate Governance Mechanisms. Proceedings of the XI National Symposium on Accounting, Pontianak (23-24 July), XI, 1–26.

16) Wibowo, B., & Prasetyo Siantoro, A. (2018). Level of Bank Competition and Banking Systemic Risk: The Case of Indonesia. Journal of Technology Management, 17(3), 166–179. https://doi.org/10.12695/jmt.2018.17.3.1

17) Zarkasyi, H. Moh. Wahyudin. (2008). Good Corporate Governance in Manufacturing, Banking and Other Financial Services Business Entities, Bandung: Alfabeta