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Thursday, April 29, 2010

Activities And Financial Influence ...


Activity and Financial Literacy of Audit Committee Influence Against Type of Profit Management

Pengaruh Aktivitas Dan Financial Literacy Komite Audit Terhadap Jenis Manajemen Laba

Debby FITRIASARI SE. AK, M.S.M
Indonesian Universities

ABSTRACT

Audit committee is one component of the GCG Which exists in the company. Ins running on their tasks and functions in connection with financial reporting, the members of the audit committee is required to Communicate actively with internal and external parties and to have financial literacy in order to be Able to Increase the quality of company's financial statement.

Performed this research is to find the effect of the audit committee's effectiveness, in Which the effectiveness is from the perspective of input and process, to the type of company's earnings management, whether it is efficient or Opportunistic. The audit steering committee's effectiveness is Measured by the audit committees of GCG survey results from the index is developed by Arsjah Which (2005). In Addition to finding the effect of the audit committee's effectiveness, this research is Also Performed to find the effect of components of the audit committee's activity, its meeting with the company's internal (IAU) and the external auditor and Its financial literacy to the type of company's earnings management. More effective, active and financially literate audit committees are the Expected to Be Able to make the company's earnings management more efficient.

This research Finds That the audit committee's effectiveness from the perspective of the input and process is not Able to Make the company's earnings management more efficient. If We see from the component of the audit committee's activity, its meeting with the SPI is not proven to make the company's earnings management more efficient. Whilst the audit committee's meetings with external auditors and financial literacy have inconclusive results.

This research is Also using the Board of Commissioners ("BOC") index and the external auditors' index from a survey by Arsjah (2005), besides the BOC's percentage and the auditor's size, to find the effect of BOC's and external auditor's quality to the type of company's earnings management . This research Finds That BOC index index and external auditors tend to make the company's earnings management more efficient than the BOC's percentage and the auditor's size. It shows That the BOC's percentage and the auditor's size are not appropriate to be Used as a proxy of BOC and audit quality.

Keywords: audit committee,'s effectiveness, the audit committee's activity, financial literacy, earnings management.

CHAPTER I INTRODUCTION
The concept of good corporate governance (GCG), the more often mentioned by practitioners of business as one tool to prevent the financial big case that happened, for example the case of Enron (Alijoyo, 2002). One component that plays an important role in the process of implementation of GCG is an audit committee.

DeZoort et al. (2002) explains that an effective audit committee determined two things: 1) from the input side (the composition of the qualifications, competence and the amount of resources) and 2) of the process (must have a high work ethic). From the input and the process is expected to be an effective audit committee work so that it can produce an output in the form of financial statements, internal controls and risk management that can be trusted.

The financial statements of quality and trustworthy is a difficult thing to measure. One of the ways used by researchers to measure it is by seeing whether there is an earnings management practices by management in preparing its financial statements, a proxy for discretionary accruals (Xie et al. (2001), Chtourou et al. (2001), Bradbury et al. (2004), Parulian (2004), Wedari (2004)).

*Simposium Nasional Akuntansi 10 Makassar
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