Good Corporate Governance and Political Connections to Accounting Conservatism with Company Size as a Moderating Variable: Evidence from Indonesia and Malaysia

Hendy Satria (), Charly Marlinda, Rachmad Chartady and Bambang Sambodo
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Hendy Satria: Universitas Sebelas Maret
Charly Marlinda: STIE Pembangunan
Rachmad Chartady: STIE Pembangunan
Bambang Sambodo: STIE Pembangunan

A chapter in Proceedings of the International Colloquium on Business and Economics (ICBE 2022), 2022, pp 166-178 from Springer

Abstract: Abstract This study aims to determine the mechanism of good corporate governance and political connections to accounting conservatism with company size as the moderating variable: studies on manufacturing companies in Indonesia and Malaysia. The good corporate governance mechanism consists of managerial ownership and the proportion of independent commissioners. The data in this study is secondary data with a sample consisting of the Indonesia Stock Exchange as many as 27 companies and the Malaysia Stock Exchange as many as 26 companies whose sub-sector is food and beverage with an observation period from 2018 to 2021. Sample selection using purposive sampling method. The analytical method used in this study is multiple linear regression with moderated regression analysis (MRA) using E-Views 12. The results of this study indicate that the Indonesian Stock Exchange companies show that good corporate governance and good corporate governance moderated by company size partially have no significant effect on accounting conservatime. Partially, political connections have a negative and significant effect on accounting conservatism and company size partially has a negative and insignificant effect on accounting conservatism and political connections moderated by firm size partially strengthens and significantly influence accounting conservatism. While the Bursa Malaysia company shows that good corporate governance, political connections, good corporate governance moderated by company size and political connections moderated by company size partially have no significant effect on accounting conservatime. While the size of the company partially has a negative and significant effect on accounting conservatism. The advice that researchers can give is that companies can pay more attention to factors that can affect accounting conservatism so that in applying accounting conservatism can bring companies to a better direction.

Keywords: Good corporate governance; Political Connections; Company Size; Accounting Conservatism (search for similar items in EconPapers)
Date: 2022
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DOI: 10.2991/978-94-6463-066-4_15

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