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

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Listed:
  • Anggita Langgeng WIJAYA

    (Universitas PGRI Madiun, Indonesia)

  • Ima Widha RATNASARI

    (Universitas Pendidikan Ganesha, Indonesia)

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.

Suggested Citation

  • Anggita Langgeng WIJAYA & Ima Widha RATNASARI, 2023. "The Effect of the Audit Committee on the Firm Value of State-Owned Enterprises in Indonesia: The Mediation Role of Financial Performance," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 4(6), pages 60-72, June.
    • Handle: RePEc:ahd:journl:v:4:y:2023:i:6:p:60-72
    DOI: 10.37945/cbr.2023.06.07
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    References listed on IDEAS

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    More about this item

    Keywords

    audit committee; firm value; financial performance; state-owned enterprises; Indonesia;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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