Impact of Audit Committee on Internal Control Disclosure
Parahyangan Catholic University
Regulation on companies’ reporting in the last few years has changed. Such changes appear as a reaction to the corporate reporting scandals and perceived flaws several times during the financial crisis around the world. In Indonesia, in August 2012, Bapepam issued rules relating to the submission of annual reports. One of the components that must be disclosed in the annual report according to those rules is the disclosure of internal control. In practice, interpretation and implementation of internal control disclosure varies among public companies listed on the Indonesia Stock Exchange (BEI). Although the disclosure itself is mandatory, but the details of the contents of such disclosure is not specifically regulated so that the depth and breadth of the disclosure is voluntary. Internal control aims to support the achievement of corporate goals. There is an indication that company classified as a superior company, has more adequate disclosure of internal control. In this study, companies whose shares are included in the list of IDX30, categorized as superior company. Based on the results, it can be concluded that the companies were classified as group IDX30, has the quality of disclosure of internal control that is more adequate than the company nonIDX30 group. This study further examines the impact of audit committee that affect the disclosure of internal control in its annual report. The result of the study found that audit committee is not directly influence the disclosure of internal control.
Topic: Financial Management and Accounting