Ersa Tri Wahyuni, Asangki Nindya, Gatot Soepriyanto, Ilya Avianti and Zubir Azhar
Pertanika Journal of Social Science and Humanities, Volume 28, Issue 2, June 2020
Keywords: Audit Committee, IAS 24, institutional ownership, management compensation
Published on: 26 June 2020
This study aimed to examine the effect of firm characteristics and corporate governance on the quality of management compensation disclosure in Indonesia. The adoption of International Accounting Standards (IAS) 24 Related Party Disclosures in Indonesia in 2011 had required disclosures about key management compensation, which was not required by the previous standard. The research was conducted by examining the top 100 listed companies data that ranged between 2011 and 2014. Our findings suggest that institutional ownership and firm size are positively associated with the disclosure level of management compensation. We also found that the proportion of independent audit committee was negatively associated with the level of management compensation disclosure. Finally, we found no evidence that the audit quality had affected the level of management compensation disclosure. Our research has shed light on the determinants of management compensation disclosure in an emerging country with a two-tier board system where arguably the financial reporting environment is opaquer than the more developed countries.
ISSN 0128-7702
e-ISSN 2231-8534
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