The Effect of the Audit Committee on the Firm Value of State-Owned Enterprises in Indonesia: The Mediation Role of Financial Performance

Anggita Langgeng Wijaya and Ima Widha Ratnasari
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Anggita Langgeng Wijaya: Universitas PGRI Madiun, Indonesia
Ima Widha Ratnasari: Universitas Pendidikan Ganesha, Indonesia

CECCAR Business Review, 2023, vol. 4, issue 6, 60-72

Abstract: The audit committee is important in implementing corporate governance in a company. The aim of this study is to investigate the impact that the audit committee has on the value of the company, with the financial performance of the company serving as a mediating variable. During the 2016-2020 research period, the investigation was carried out at businesses that are part of state-owned enterprises and are registered on Indonesia’s capital market. Data analysis in this research uses a path analysis. The research sample was obtained through a population sampling technique. This research found that the audit committee positively affects the company’s financial performance. This research also found a positive effect of the financial performance on firm value. The results of path analysis prove that financial performance can act as a variable mediating the influence between the audit committee and firm value in companies in the category of state-owned enterprises registered on Indonesia’s capital market. This research proves that the existence of an audit committee can improve a company’s financial performance, which indirectly impacts increasing firm value.

Keywords: audit committee; firm value; financial performance; state-owned enterprises; Indonesia (search for similar items in EconPapers)
JEL-codes: G30 G32 M42 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ahd:journl:v:4:y:2023:i:6:p:60-72

DOI: 10.37945/cbr.2023.06.07

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