Accounting Conservatism Influence On Equity Appraisal Company By The Good Corporate Governance Be Moderated
Amalia S. Yana DWI FALA, SE, SI M.
Khairun Ternate University
The objective of this study is to determine the influence of accounting conservatism on the assessment of corporate equity valuation and the ABILITY of Good Corporate Governance (GCG) in interacting the effect of accounting conservatism to the corporate value. Sample in this research is manufacturing companies listed in the Jakarta Stock That Market for the financial report in 2000-2005 periods. Number of sample is 23 companies with 115 observations. The accounting conservatism, conservatism, the proxy by instrument variables (VIKV2_23). The assessment of corporate proxies by equity market-to-book ratio. The mechanism of Corporate Governance is Measured using the managerial approach of the properties and proportion of commissioner board.
The results showed That accounting conservatism, giving significant positive influence to corporate equity. Proportion of commissioner board as one mechanism of corporate governance as moderating variables That was interacting with relations Between accounting conservatism, corporate value, even in a negative impact. Oppositely, the property was not a managerial That Could interacting variables moderating the relation Between Accounting conservatism and corporate value.
Key words: conservatism, instrumental variable, market-to-book ratio, a corporate governance mechanism.
Conservatism is a principle which most affect the accounting valuation (Sterling, 1970 in Watts, 2003a). Because of that conservatism today and still have an important role in accounting practices. Conservatism is defined as a concept for delaying the recognition of future cash inflows (Watts, 1993), and as a conservative accounting is generally stated that the accountant should report the accounting information of the lowest of several possible values for assets and income, as well as the highest of several possible value of liabilities and expenses (Hendriksen, 1992).
Lo (2005) defines conservatism as a pessimistic outlook in accounting. Conservative accounting means that accountants be pessimistic in the face of uncertain income or loss by selecting the principles or policies that slow the recognition of revenue, accelerate the recognition of the cost, lowering the valuation of assets and raising debt rating.
In fact there are pros and cons surrounding the application of the principles of conservatism. Critics claimed that the conservatism of this principle led to the financial statements to be biased and so can not be used as tools by the users of financial reports to evaluate corporate risk. Monahan (1999) in Mayangsari and Wilopo (2002) states that the more conservative accounting so the reported book value of equity will be increasingly biased.
PENGARUH KONSERVATISMA AKUNTANSI TERHADAP PENILAIAN EKUITAS PERUSAHAAN DIMODERASI OLEH GOOD CORPORATE GOVERNANCE
* Simposium Nasional Akuntansi 10 - Makassar