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The Effect of Good Corporate Governance and Earnings Quality on Firm Value: An Empirical Study of LQ 45 Companies, Indonesia

Author

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  • Nurisyah Marthania

    (Department of Accounting, Universitas Mercu Buana, Jakarta, Indonesia)

  • Erna Setiany

    (Department of Accounting, Universitas Mercu Buana, Jakarta, Indonesia)

Abstract

This study aimed to determine the effect of good corporate governance and earnings quality on firm value. The population in this study were companies included in the LQ 45 index for the 2017-2020 period, a total population of 45 companies included in the LQ 45 index, 31 companies were selected to be the research sample. As a result, the total observations made for 2017 to 2020 were 124 observations, while the research method used correlational research. The study results were as follows: institutional ownership, managerial ownership, the composition of the independent board of commissioners, audit committee, and earnings quality simultaneously affect the firm value variable by 84%, the rest of 16% was explained by other reasons outside the model. While partially, only the composition of the independent board of commissioners (IC) affected firm value (FV), while the variable institutional ownership (IO), managerial ownership variable (MO), audit committee variable (AC), and earnings quality variable (EQ) was no effect on firm value (FV).

Suggested Citation

  • Nurisyah Marthania & Erna Setiany, 2022. "The Effect of Good Corporate Governance and Earnings Quality on Firm Value: An Empirical Study of LQ 45 Companies, Indonesia," Journal of Economics, Finance and Accounting Studies, Al-Kindi Center for Research and Development, vol. 4(2), pages 78-90, April.
    • Handle: RePEc:alk:jefas0:v:4:y:2022:i:2:id:3113
    DOI: 10.32996/jefas.2022.4.2.7
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