Measurement vs. disclosure of accounting compliance in Indonesia
AbstractThis study examines Indonesian Accounting Regulatory Compliance measurement (IARCm) and Indonesian Accounting Regulatory Compliance disclosure (IARCd) through an agency theory-based analysis of 220 Indonesian listed companies' 2006 annual reports. To measure the level of regulatory compliance of Indonesian listed companies, this study uses a 29 item index derived from Indonesian accounting standards on inventory, fixed assets and depreciation. Analysis reveals a moderate level of 69.70% measurement and 54.20% disclosure compliance with accounting rules. Statistical analysis shows that firm size is the best predictor of compliance. Surprisingly, corporate governance factors fail to explain compliance. However, more profitable firms do demonstrate increased measurement compliance. Although Indonesian firms may have complied with more than 50% of the key accounting rule provisions, regulatory intervention is still strongly advocated for making Indonesian firms fully comply with Indonesian accounting regulations.
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Bibliographic InfoArticle provided by Inderscience Enterprises Ltd in its journal International Journal of Accounting, Auditing and Performance EvaluationÂ Â.
Volume (Year): 7 (2011)
Issue (Month): 1 (January)
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Web page: http://inderscience.metapress.com/link.asp?target=journal&id=111023
accounting compliance; disclosure compliance; developing economies; accounting standards; Indonesia; regulatory compliance; compliance measurement; agency theory; inventory; fixed assets; depreciation; corporate governance;
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