the influence of audit committee...
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THE INFLUENCE OF AUDIT COMMITTEE
CHARACTERISTIC TO AUDIT LAG ON FINANCIAL
REPORTING
(Empirical study on Company Listed on The Indonesia Stock
Exchange Year 2013)
By:
Saifan Atsauri Hidayatullah
ID: 109082100015
ACCOUNTING DEPARTMENT
INTERNATIONAL CLASS PROGRAM
FACULTY OF ECONOMICS AND BUSINESSES
STATE ISLAMIC UNIVERSITY SYARIF HIDAYATULLAH
JAKARTA
1436 H /2015
i
THE INFLUENCE OF AUDIT COMMITTEE
CHARACTERISTIC TO AUDIT LAG ON FINANCIAL
REPORTING
(Empirical study on Company Listed on The Indonesia Stock
Exchange Year 2013)
By:
Saifan Atsauri Hidayatullah
ID: 109082100015
ACCOUNTING DEPARTMENT
INTERNATIONAL CLASS PROGRAM
FACULTY OF ECONOMICS AND BUSINESSES
STATE ISLAMIC UNIVERSITY SYARIF HIDAYATULLAH
JAKARTA
1436 H /2015
ii
THE INFLUENCE OF AUDIT COMMITTEE
CHARACTERISTIC TO AUDIT LAG ON FINANCIAL
REPORTING
(Empirical study on Company Listed on The Indonesia Stock
Exchange Year 2013)
Undergraduate Thesis
Submitted to The Faculty of Economics and Business
In Partial Fulfillment of the Requirement
For Acquiring Bachelor Degree of Economics
By:
Saifan Atsauri Hidayatullah
109082100015
Under Supervision of
Supervisor I Supervisor II
Prof. Dr. Abdul Hamid, MS Atiqah, SE, M. Si
ID. 19570617 198503 1 002 ID. 19820120 200912 2 004
ACCOUNTING DEPARTMENT
INTERNATIONAL CLASS PROGRAM
FACULTY OF ECONOMICS AND BUSINESSES
STATE ISLAMIC UNIVERSITY SYARIF HIDAYATULLAH
JAKARTA
1436 H /2015
iii
ENDORSEMENT SHEET
COMPREHENSIVE EXAMINATION
On this day, Tuesday, July 30th, 2013, we have administered a comprehensive test
examination to:
1. Name : Saifan Atsauri H
2. Student Number : 109082100015
3. Department : Accounting (International Program)
4. Thesis Title : The Influence of Audit Committee Characteristic to
Audit Lag on Financial Reporting
After carefully observation and attention to appearance and capabilities relevant
for the comprehensive exam process, it was decided that the above student passed
and given the opportunity to thesis as one of the requirement to obtain a Bachelor
of Economics in The Faculty of Economics and Business Syarif Hidayatullah
State University Jakarta.
Jakarta, July 30th, 2013
1. Zuhairan Yunmi Yunan, M.Sc ( )
ID. 19800416 200912 1 002 EXAMINER I
2. Yulianti, M.Si ( )
ID. 19820318 201101 2 011 EXAMINER II
3. Abdul Hamid Cebba, MBA, CPA ( )
ID. 19620502 199303 1 003 EXPERT EXAMINER
iv
CERTIFICATION OF THESIS EXAM SHEET
On this day, Tuesday, November 24th, 2015, we have administered a
comprehensive test examination to:
1. Name : Saifan Atsauri H
2. Student Number : 109082100015
3. Department : Accounting (International Program)
4. Thesis Title : The Influence of Audit Committee Characteristic
to Audit Lag on Financial Reporting
After carefully observation and attention to appearance and capabilities relevant
for thesis examination process, it was decided that the above student has passed
and the thesis was accepted as one of the requirement to obtain a Bachelor of
Economics in The Faculty of Economics and Business Syarif Hidayatullah State
University Jakarta.
Jakarta, November 24th, 2015
1. Dr. Amilin., SE., Ak., M.Si., CA., QiA., BKP ( )
ID. 19730615 200501 1 009 Head of Examiner
2. Hepi Prayudiawan,SE.,MM.,Ak.,CA ( )
ID. 19760924 200604 2 002 Secretary
3. Prof. Dr. Abdul Hamid, MS ( )
ID. 19730615 200501 1 009 Supervisor I
4. Atiqah, SE, M. Si ( )
ID. 19820120 200912 2 004 Supervisor II
5. Yulianti, SE, M.Si , CPA ( )
ID. 19820318 201101 2 011 Expert Examiner
v
SHEET STATEMENT
AUTHENTICITY SCIENTIFIC WORKS
Signature Below
Name : Saifan Atsauri H
Student Number : 109082100015
Department : Accounting (International Program)
Faculty : Economics and Business
Hereby declare that in writing this thesis, I:
1. Do not use other people’s ideas without being able to develop and accountable.
2. Do not plagiarism of other people’s working manuscript.
3. Do not use other people’s work without mentioning the original source or without the owner’s permission.
4. Do not manipulate and falsify the data.
5. Own work and able to work for responsible for this work.
If in the future there is a demand from the other side of my work, and have been
accountably proved, was indeed found evidence than I have violated the above
statement, then I am ready to be sanctioned according t rules applicable in the
Faculty of Economics and Business Syarif Hidayatullah State Islamic University
Jakarta.
Thus statement truly made with sincerely.
Jakarta, 1st October 2015
(Saifan Atsauri H)
vi
CURRICULUM VITAE
Personal Data
Full Name : Saifan Atsauri H
Nick Name : Saifan
Address : GRB. Cluster Fedora Blok J16/ 19 Tangerang Selatan,
Banten
Mobile Phone : 081310962244
E-mail : [email protected]
Place, Date of Birth : Denpasar, April 18, 1992
Gender : Man
Religion : Islam
Nationality : Indonesia
Education
Elementary SDIT TAWAKKAL Denpasar 1997-2003
Junior High School MTS ASSALAAM Solo 2003-2006
Senior High School MA ASSALAAM Solo 2006-2009
University UIN Syarif Hidayatullah Jakarta 2009-now
Major: Accounting international class program
Informal Education
o PPA FEUI, Akuntansi Keuangan dan Komputer Akuntansi (2012)
o Goethe Institute, Level A1 (2013)
Work Experience
o Internship at Bata Dollar at Bogor (2012)
Organization Experience
o Head of Health Committee at Student Organization in Assalaam Solo (2008)
vii
Seminar
o Summer School “Renewable Energy-Leadership and Enterpreneurship” in
Weiden, Germany, sponsored by DAAD ( September 10-18, 2011)
Activity of Co-curricular
o Company visit to Perum Peruri (2010)
o Company visit to BMW Germany (2012)
viii
THE INFLUENCE OF AUDIT COMMITTEE CHARACTERISTIC TO
AUDIT LAG ON FINANCIAL REPORTING
(Empirical study on Company Listed on The Indonesia Stock Exchange Year
2013)
ABSTRACT
The purpose of this research is to analyze factors that influences
timeliness submission of the Indonesian public company’s financial report. The
examined factors of this research are audit committee characteristic, which are
audit committee independence, audit committee expertise, audit committee size,
and audit committee meeting as independence variable while timeliness as
dependent variable.
The data that used in this research was the secondary data and selected by
using purposive sampling method. The sample consist of 288 companies listed in
Indonesia Stock Exchange (IDX) and sent the financial report to BAPEPAM in
2013. The analysis to test the hypothesis is using logistic regression at level
significant 5%.
The result of this research shows that audit committee size and audit
committee meeting have significant influence to reduce audit report lag, while the
audit committee independence and audit committee expertise do not have
significant influence on the timeliness submission on financial reporting.
Keyword: Audit Committee, Corporate Governance, Audit Lag.
ix
PENGARUH KARAKTERISTIK KOMITE AUDIT TERHADAP AUDIT
LAG PADA PENGUMPULAN LAPORAN KEUANGAN
(Studi empiris pada perusahaan Go Public yang terdaftar di BEI pada tahun 2013)
ABSTRAK
Tujuan dari penelitian ini adalah untuk menganalisa faktor faktor yang
menyebapkan audit lag dalam pengumpulan laporan keuangan. Faktor- faktor
yang dianalisa dalam penelitian ini adalah komite audit karakteristik yang terdiri
dari independensi komite audit, keahlian komite audit, ukuran komite audit, dan
rapat komite audit yang berfungsi sebagai variable independen sedangkan
keterlambatan dalam pengumpulan laporan keuangan menjadi variable
dependen.
Data yang digunakan dalam penelitian ini merupakan data turunan yang
didapat menggunakan metode purposive sampling. Data terdiri dari 288
perusahaan yang terdaftar dalam Bursa Efek Indonesia (BEI) dan melaporkan
keuangannya pada BAPEPAM pada tahun 2013. Analisa pada penelitian ini
menggunakan regresi logistic pada signifikansi 5%.
Hasil penelitian ini menunjukan bahwa ukuran komite audit dan rapat
komite audit memiliki pengaruh yang signifikan terhadap keterlambatan
pengumpulan laporan keuangan, sedangkan independen komite audit dan
keahlian komite audit tidak memiliki pengaruh yang signifikan terhadap
keterlambatan pengumpulan laporan keuangan.
Kata Kunci: Komite Audit, Tata Kelola Perusahaan, Audit Lag.
x
FOREWORD
Assalammu'alaikum Wr.Wb
All Praise to Allah SWT as the Hearer, the Seer and above all an
abundance of grace, Taufiq, as well as his guidance. So, because Allah SWT I can
finish this research on time.
Shalawat always gives to the Prophet of Muhammad SAW and all his
family and friends who always helped him in establishing Dinullah in this earth.
With the strength, intelligence, patience, and strong desire from Allah
SWT, I am able to finish this mini thesis as graduation pre requirement for
bachelor degree. I believe there is an invisible hand that has helped me going
through this process.
My special thank for my parents, Puji Suhartono and Iftitah who alway
support my studying and teach me your best experience. Although I were seldom
in home during my studies this years, but you give me love and care. Making you
proud of me is always becoming my priority. I do not want to be regret for the
second time. Thanks for the hard work that had you done for the family. Thanks a
lot for being great father and mother ever for me.
I believe I am nothing without each one of you who has helped me in
finishing this mini thesis. Thus, in this very special moment, let me say many
thanks to all of them who have been helping me the process of this thesis,
including:
1. M. Arief Mufraeni, Lc.,Msi as Dean of the Faculty of Economics and Business
who helped me in completing this mini thesis and received Bachelor Degree.
xi
2. Prof. Dr. H. Abdul Hamid, MS as my thesis supervisor I. You are my mentor who
has provided direction and guided me, shared your knowledge to me, and thank
you for your time that you gave .So, I able to finish this mini thesis.
3. Atiqah, SE, M.Si as my thesis supervisor II who has provided direction, guidance,
and thank you for your time and your patience that you gave to me, so I can finish
this mini thesis. So sorry for my bad attitude during the consultation.
4. My brother and sister, who has always helped and supported me for my best,
whatever I do and whenever it is.
5. Bekasi Family, Ilham and Zulia, thanks for supporting me, and thanks also for the
convenience, love, care, support and helps.
6. All Lecturers who have taught patiently, may what they have given are recorded
in Allah SWT almighty and all staff UIN Jakarta.
7. All my friends in accounting international 2009, Angga, Arini, Aulia, Bimo, Cici,
somal friends (Adnanv & Usman), Diah, Evi, Gamal, Galer, Merdiansyah, Nanda,
Jihan, Luthfi, Pipit, Putri, Septian, Tami, and Yusuf. Thanks for the remarkable
moments that we had been through together and special thanks for some of you
that already shared and taught me your valuable experiences, especially in doing
thesis. Thanks also for my friends in management international 2009.
8. Thanks for all seniors and juniors that had helped me during my study,
comprehensive test and thesis. Thanks a lot.
xii
I realize this minithesis is still far from perfection, thus suggestions and
constructive criticism from all parties are welcome, in order to improve my thesis.
Finally, only Allah SWT will return all and I hope this thesis will be useful to all
parties, especially for writers and readers in general, may Allah bless us and
recorded as the worship of Allah’s hand. Amin.
Wassalammualaikum Wr.Wb
Tangerang, 1st October 2015
Saifan Atsauri H
109082100015
xiii
CONTENT OF TABLE
INFORMATION PAGE
Cover .............................................................................................................. i
Certification from Supervisor ....................................................................... ii
Certification of Comprehensive Exam Sheet ............................................... iii
Certification of Thesis Exam Sheet .............................................................. iv
Authenticity Statement Sheet Scientific Work ............................................ v
Curriculum Vitae ........................................................................................... vi
Abstract ........................................................................................................... viii
Abstract ........................................................................................................... ix
Foreword ......................................................................................................... x
Content of Table ............................................................................................. xiii
List of Table .................................................................................................... xvi
List of Figure .................................................................................................. xvii
CHAPTER I INTRODUCTION
A. Background .......................................................................................... 1
B. Problem Formulation ............................................................................ 8
C. Purpose of Research ............................................................................. 8
D. Benefit of Research .............................................................................. 8
CHAPTER II LITERATURE REVIEW
A. Theory Framework ............................................................................... 10
1. Agency Theory .............................................................................. 10
2. Compliance Theory ....................................................................... 11
3. Corporate Governance .................................................................. 13
4. Audit ............................................................................................. 16
a. Audit Committee ..................................................................... 17
1. Audit Committee in Indonesia .......................................... 18
5. Financial Report ............................................................................ 21
6. Timeliness ..................................................................................... 22
a. Audit Lag .................................................................................. 25
xiv
B. Previous Research ................................................................................ 25
C. Logical Framework ............................................................................. 27
D. Hypothesis ........................................................................................... 28
CHAPTER III RESEARCH METHODOLOGY
A. Scope of Research ............................................................................... 30
B. Sampling Method ................................................................................ 30
C. Data Collection Method ....................................................................... 31
D. Data Analyze Method .......................................................................... 32
1. Descriptive Statistic....................................................................... 32
2. Classical Test Assumption ........................................................... 32
3. Multiple Regression Analysis ....................................................... 36
4. Coefficient Determination Test ..................................................... 38
E. Variable Operation ............................................................................... 38
1. Independent Variable .................................................................... 38
a. Audit Committee Independence .............................................. 39
b. Audit Committee Expertise ...................................................... 39
c. Audit Committee Size .............................................................. 40
d. Audit Committee Meeting ........................................................ 40
2. Dependent Variable ...................................................................... 40
a. Audit Lag ............................................................................. 41
3. Control Variable ............................................................................ 41
a. Company Size ..................................................................... 41
b. External Auditor .................................................................. 42
c. Profitability ......................................................................... 43
CHAPTER IV RESULT AND DISCUSSION
A. Overview of Research Object............................................................... 45
1. Description of Research Object .................................................... 45
2. Description of Selected Companies’ Sample ............................... 46
B. Analysis and Discussion ....................................................................... 54
1. Descriptive Statistic Analysis ....................................................... 54
2. Classical Test Assumption ............................................................ 56
xv
3. Multiple Regression Analysis ....................................................... 62
4. Coefficient Determination Test ..................................................... 70
5. Interpretation ................................................................................ 70
CHAPTER V CONCLUSION AND RECOMMENDATION
A. Conclusion ............................................................................................ 78
B. Recommendation .................................................................................. 79
REFERENCES ............................................................................................... 81
APPENDIXES ................................................................................................ 86
xvi
LIST OF TABLE
NO INFORMATION PAGE
2.1 Previous Research ................................................................................ 25
3.1 DW Test .............................................................................................. 35
3.2 Research Operational Variable ............................................................ 44
4.1 Sample Selection ................................................................................. 46
4.2 Companies Distribution which is On Time and Delay ........................ 47
4.3 Distribution ACI to the Timeliness Submission Financial Report ....... 48
4.4 Distribution ACE to the Timeliness Submission Financial Report ...... 49
4.5 Distribution ACS to the Timeliness Submission Financial Report ...... 50
4.6 Distribution ACM to the Timeliness Submission Financial Report..... 51
4.7 Distribution CS to the Timeliness Submission Financial Report ......... 52
4.8 Distribution EA to the Timeliness Submission Financial Report ........ 52
4.9 Distribution ROA to the Timeliness Submission Financial Report ..... 53
4.10 Descriptive Statistic ............................................................................. 54
4.11 Kolmogorov-Smirnov Test ................................................................. 58
4.12 Multicolinearity Test Result ................................................................ 59
4.13 Autocorrelation Test Result ................................................................ 61
4.14 Result of Multiple Regression ............................................................. 62
4.15 Result of F-Test ................................................................................... 67
4.16 Result of t-Test .................................................................................... 67
4.17 Result of Determination Coefficient Test ........................................... 70
xvii
LIST OF FIGURE
NO INFORMATION PAGE
2.1 Logical Framework .............................................................................. 27
4.1 Histogram Graph ................................................................................. 57
4.2 Normal P-P Plot Graph ....................................................................... 57
4.3 Heteroscedasticity Test Result ............................................................ 60
1
CHAPTER I
INTRODUCTION
A. Background
The decrease in investor confidence in financial statement
information resulting from corporate scandals involving once well-
respected companies such as Enron and WorldCom served as a catalyst
for the Sarbanes-Oxley Act of 2002 (SOX). In Indonesia, there is case
which drag state enterprise (PT KAI). Problem come when commissioner
as a principal fraud management performance which result untrusted
financial report (www.dokumen.tips). The intent of SOX is to protect
investors by improving the accuracy and reliability of corporate
disclosures made pursuant to the securities laws. The financial
information should be of higher quality before it is being delivered to
outside stakeholders because the users of financial information demand
for complete, transparent and timely information. Singhvi and Desai
(1971) in Shukeri and Nelson (2011) suggest that quality of reporting, is
reporting which complete, accurate, reliable and prepared in a timely
manner that leads to quality decision making. Thus, timely financial
reporting is considered as one of financial reporting quality that leads to
quality decision-making.
Investors in today's markets rely on financial report to provide
greater information on a timely basis. Timeliness of financial reporting
has allowed the information to be available to decision-makers before it
2
loses its capacity to influence business decisions. Greater benefits will be
derived from the timely reporting of financial statements, and specifically
timely reporting refers to the shorter time between the date of accounting
financial year-end and the date an independent auditor issues an audited
annual report. The delay in releasing the financial statement is most
likely to boost uncertainty associated with the decisions made based on
the information contained in the financial statements Ashton et al (1987).
Therefore, time precision in reporting will enhance decision-making and
reduce information asymmetry in the capital market Stephen Owusu-
Ansah and Stergios Leventis (2006). The issue of timeliness of reporting
also affects regulators and policy makers since they need to play a role in
ensuring the shorter gap of financial report delay. Hence, exploring the
determinants of timeliness of reporting would enhance the regulators of
emerging capital market in formulating new policies to improve the
allocation efficiency of their markets. Giving the importance of financial
reporting timeliness to investors, and identifying the determinants of
financial reporting delay has become a significant move to improve the
financial reporting quality and also continue to examine the factors that
may influence the timeliness of financial reporting.
Bapepam as security exchange committee and government
financial institutions in Indonesia, issued regulation No. XK2 attachment
decisions of the head of Bapepam and LK No.: Kep346/BL/2011
regarding submission of the financial statements of public listed
3
companies periodically. It stated that all public companies listed on the
Indonesia stock exchange obligated to submit annual financial statements
and issue the opinion made by the certified public accountant. The
regulation makes enterprise companies listed in Indonesia Stock
Exchange became motivated to report their financial statements in a
timely manner, in accordance with applicable regulations.
Professionals and government agencies take action to identify the
factors that caused company in presenting its financial statements in a
timely manner. Bursa Malaysia highlights that one of the corporate
governance mechanism; audit committees, will play significant role in a
company to ensure the accuracy in the delivery the financial statements
will be achieved based Bursa Malaysia’s regulators Hashim and Rahman
(2011).
The existence of the audit committee in Indonesia confirmed by
Bapepam regulation No. IX.1.5, guidelines and implementation of the
establishment audit committee (the Chairman of Bapepam No.Kep-
29/PM/2004 Attachment 24 September 2004), which say that the audit
committee is a committee established by the board of commissioners in
order to carry out its duties and functions. Another rule explains the audit
committee, rules No.IA on General Provisions on Registration of Equity
Stock (Annex II to Decision Directors. Jakarta Stock Exchange No.Kep-
305/BEJ/07 -2004 July 19th, 2004), SK. Dir. JSE Number 315/BEJ/06-
2000, Decree No. 117/Year SOE 2002 SOE and Law No. 19/2003 issued
4
by Jakarta Stock Exchange (now Indonesia Stock Exchange). The rule
obligates the companies to establish an audit committee in order to
actualize good corporate governance (GCG) in Indonesia Darmawati et
al. (2005).
The effectiveness of audit committees in monitoring corporate
financial reporting is great concern to regulators, especially in light of
recent accounting scandals. The audit committee serves as a liaison
between the external auditor and the board of directors, and facilitates the
monitoring process by reducing information asymmetry between the
external auditor and the board Klein (1998). In addition, Lennox and
Park (2007) suggest that the audit committee is the most important
governance mechanism with respect to audit firm appointments because
it is responsible for hiring the external auditor and for overseeing audit
quality. Therefore, a properly functioning audit committee is critical in
ensuring the independence of auditors and high quality financial
reporting Wild (1996) in Husam et al. (2012).
In 1999, the Blue Ribbon Committee on Improving the
Effectiveness of Corporate Audit Committees (BRC) issued several
recommendations in response to concerns over the failure of a number of
audit committees Lublin and MacDonald (1999) in DeZoort et al. (2002).
These recommendations relate to audit committee composition and
operational characteristics such as size, independence, and financial
literacy.
5
Afify (2009) in Hashim and Rahman (2011) tried to analyze the
relationship between the audit committee and the timeliness of financial
report, which says that the establishment of audit committees in Egypt
voluntarily reduces instances of audit report lag. Bedard and Gendron
(2010) in Naimi et al (2010) indicate that the relationship between the
audit committee and the timeliness of financial reporting is rarely
investigated.
Hashim and Rahman (2011) in previous studies analyzed the effect
of audit committee characteristics on audit report lag in Malaysia. This
study used the audit committee independency, the number of audit
committee meetings and audit committee expertise as independent
variables to analyze their effects on audit report lag. This study found
that audit committee independence and audit committee expertise have a
significant relationship to company's audit report lag. Wijaya and
Rahardja (2012) show that audit committee size and audit committee
expertise has significant influence to reduce audit report lag, while the
others audit committee characteristic has not.
Based on researched mentioned above, the researcher is interesting
to find out the influence of audit committee effectiveness in certain
indicators to minimize the timeliness submission on financial reporting
and get reliable reporting for decision making. Proofing financial report
reliability is not always determined by the achievement of firm target
showed by the increasing of revenue or total asset of firm in stock
6
exchange, but also the compliance of the firm towards regulations, and
reliability of the reporting including the good corporate governance
regulation, by put right composition of audit committee in the firm and
also the time of submission of financial reporting. Therefore, the
researcher takes the title of thesis “The Influence of Audit Committee
Characteristics towards Timeliness Submission on Financial
Reporting (Empirical study on Company Listed on The Indonesia
Stock Exchanges Year 2013)”.
This research have been done by Wijaya and Rahadja (2012) with
the title “Pengaruh Karakteristik Komite Audit Terhadap Audit Report
Lag, Puasa et al (2014) with title “Audit Committee and Timeliness of
Financial Reporting: Malaysian Public Listed Companies”, and Vuko and
Cular (2014) with title “Finding determinants of audit delay by pooled
OLS regression analysis”. With the differences as follow:
1. Wijaya and Rahadja (2012)
a. Variable: The previous research used same variable as
this research.
b. Period: The previous research was done in 2011. While
this research is done in 2013.
c. Population: The previous research used same variable
as this research.
2. Puasa et al (2014)
a. Variable: The previous research used AC
7
Independence, AC Non Independence, AC Size, AC
Expertise, AC Activity, Profitability, Company Size,
Leverage, Managerial Ownership, Type of External
Auditor, Audit Opinion, and Company financial year-
end.
b. Period: The previous research was done within 2004-
2006, and 2009-2011, while this research is done in
2013.
c. Population: The previous research used stock listed on
Bursa Malaysia, while this research uses stock listed in
Indonesia Stock Exchange as population.
3. Vuko and Cular (2014)
a. Variable: The previous research used Audit Firm Type,
Audit Opinion, Profitability, Leverage, Audit effort,
and Absolute level of total accrual, Company Size, and
Audit Committee.
b. Period: The previous research was done within 2008-
2011, while this research is done in 2013.
c. Population: The previous research used stock listed on
Croatian listed companies, while this research uses
stock listed in Indonesia Stock Exchange as population.
8
B. Problem Formulation
1. Does audit committee independent have influence to audit lag?
2. Does audit committee expertise have influence to audit lag?
3. Does audit committee size have influence to audit lag?
4. Does audit committee meeting have influence to audit lag?
5. Does company size have influence to audit lag?
6. Does big 4 auditor have influence to audit lag?
7. Does profitability have influence to audit lag?
C. Purpose of Research
The purpose of this study was to obtain empirical evidence regarding the
following matters:
1. Audit committee independent has influence to audit lag.
2. Audit committee expertise has influence to audit lag.
3. Audit committee size has influence to audit lag.
4. Audit committee meeting has influence to audit lag.
5. Company size significant has influence to audit lag.
6. Big 4 auditor significant has influence to audit lag.
7. Profitability has significant influence to audit lag.
D. Benefit of Research
The expected benefits of this research include the following:
a. For Bapepam and IDX
9
This study is expected to provide the information in drafting the
law of timeliness submission of financial report for public
companies in Indonesia.
b. For Practitioners and Auditors
This study is expected to be useful and helpful in identifying
factors that affect the time delay submission of financial
statements and to provide an overview of the importance of
timeliness in delivering the company's financial position to the
public.
c. For Audit Services User
The study is expected to improve the efficiency and effectiveness
of the audit process by controlling the factor that cause delays in
submission of financial report.
d. For Future Research
The results of this research can give contribution and information
regarding the factors that influence the delay of the submission of
financial report, as well as a basis or reference for future studies.
e. For Researcher
Provide a better understanding especially about factors that
influence the delay submission of financial statements in
Indonesia, increasing insight, and can compare the existing
application in the theory of acquired companies during the lecture.
10
CHAPTER II
LITERATURE REVIEW
A. Theoretical Framework
1. Agency Theory
An agency relationship is one, which the principals engage to
another person (the agent) performing some service on their behalf,
which involves delegating some decision-making authority to the agent
Delves and Patrick (2008). Mitnick (1973) highlighted that the most
recognizable form of agency relationship is that of employer and
employee. Other examples include state (principal) and ambassador
(agent); constituents (principal) and elected representative (agent);
organization (principal) and lobbyist (agent);
or shareholders
(principal) and CEO. They give further explanation that agency theory
is the study of the agency relationship.
Jensen and Meckling (1976) provided a meaningful definition
regarding agency theory. They indicate agency theory as a theory that
explains the relationship between agents as those who manage the
company and the principal as the owner; both are bound in a contract.
The owner as the principals having little knowledge of the business
will transfer the decision concerning organization operation to the
agents, which used to be represented by the managers. The principals
evaluate the information received from the management while the
agents are running as part of management activities and decision-
11
making.
The separation of ownership and control has led to notorious
agency problem. The agency problem was first explored in Ross
(1973), with the first detail theoretical exposition of agency theory
presented in Jensen and Meckling (1976).
Delves and Patrick (2008) argued that the issue arises from
particularly dilemma when the principal and agent while nominally
working toward the same goal may not always share the same
interests. While Brennan (1995) explained that the agency problems
happen due to the impossibility of perfectly contracting for every
possible action of an agent whose decisions can affect both his own
welfare and the principal welfare. The problem is arising, how to
induce the agent to act for the best interests of the principal. Managers
bear the entire cost of failing to pursue their own goals, but capture
only a fraction of the benefits. Jensen and Meckling (1976) argue that
this inefficiency is reduced as managerial incentives to take value-
maximizing decisions are increased.
2. Compliance Theory
According to the General Dictionary Indonesian compliance comes
from the word obey. Obey means love, obedience to orders or rules
and discipline. Compliance means to be submissive, obedient, and
obedient to the teachings or rules.
Compliance Theory has been studied in the social sciences,
12
especially in psychology and sociology with emphasis on the
importance of the socialization process in influencing the compliance
behavior of an individual Sulistyo (2010). According to Saleh and
Susilowati (2004) in Sulistyo (2010) there are two basic perspectives
on law compliance in the instrumental and normative. Instrumental
perspective assumes the individual as a whole is driven by self-interest
and responses to changing incentives, and penalties associated with
the behavior. Normative Perspectives in touch with what people
consider being moral and contrary to their personal interests.
An individual tends to obey the laws that they deem appropriate
and consistent with the internal norms. Normative commitment
through morality means obeying law because the law is regarded as a
necessity, whereas normative commitment legitimacy through means
comply with the authorities making up the law has the right to dictate
behavior Sudaryanti (2008) in Sulistyo (2010).
Compliance theory can lead people better to comply with current
regulations, as well as companies are trying to submit financial report
on time because in addition to being a company's obligation to submit
financial report on time, will also be very beneficial for the users of
financial report.
Requirement for compliance with timeliness in the submission of
the annual financial report of public companies in Indonesia have been
set by Bapepam Regulation No. X.K.6, through Decree No. Kep-
13
134/BL/2006 head of Bapepam and LK concerning Obligation to
Submit Periodic Financial Report. Such regulations are legally
indicate the existence of any compliance behavior of individuals and
organizations involved in the Indonesian capital market to submit the
company's annual financial report on time to Bapepam.
3. Corporate Governance
Corporate governance is a term that over the last two decades
has become popular literature. The term governance derives from the
Latin gubernare, meaning to steer, usually applying to the steering of a
ship, which implies that corporate governance involves the function of
direction rather than control Cadbury Report (1992). Talamo (2011)
explains that the corporate governance in the traditional definition is
considered as a cornerstone of ethical conduct within accounting
practices such as the integrity and objectivity of accountants and
auditors.
Shleifer and Vishny (1989) propose a broad definition of
corporate governance: corporate governance concerns the ways in
which suppliers of funds and the corporations themselves ensure
returns on investment. Using a similar approach, Picou and Rubach
(2006) define corporate governance as the construction of rules,
practices, and incentives to align effectively the interests of the agents
(boards and managers) with those of the principals (capital suppliers).
According to Lashgari (2004), corporate governance is
14
concerned with managing the relationship among various corporate
stakeholders. Corporate governance is a concept to increase company
performance through supervising or monitoring management
performance and guarantee management accountability to stakeholder
based on rule’s framework.
The main objective of corporate governance is to achieve a
company management transparency for the users of financial statement
Yonnedi and Sari (2009). If the company could implement this concept
so the economics growth could keep on going well together with
company management transparency that is also going well and give
benefit for many sides.
In formulating corporate governance, there are many countries,
including Indonesia, that refer to OECD (Organization for Economic
Co-operation and Development). OECD reveals a corporate
governance structure and its relation of accountability among the
involved parties consisting of shareholders, board members,
commissioners, and managers. It designed to encourage the creation of
a competitive performance and to reach the main objectives of the
company.
Corporate governance has been strongly influenced by corporate
ownership structure. Meanwhile, there are many other factors affecting
corporate governance such as legal system, cultural and religious
tradition, political stability and economic event. The global financial
15
crisis and credit crunch, which have engulfed financial markets and
economics around the world, have further catapulted corporate
governance onto center stage Solomon (2010).
Generally, Indonesia’s corporations are family businesses,
which mean that family members hold key managerial positions, and
control the corporation Sang-Woo Nam and Il Chong Nam (2004).
This situation emerges the agency problem between the management
(the controlling family) and minority shareholders. The agency
problem does not appear commonly between the management and
owners. The existence of large shareholders may by itself not be a
matter of concern, or may even be a blessing but the beneficial effect
of large shareholders should be expected only when management is
separated from ownership or when proper corporate governance
mechanisms are in place so that outside shareholders can effectively
check misbehavior by controlling owners. Due to those reasons,
Indonesia needs more attention in relations to the corporate governance
problem arising from the separation of control from ownership.
Good corporate governance (GCG) is an important pillar of
market economy as it relates to the investors’ confidence both in the
companies as well as in the overall business environment.
Implementation of GCG encourages fair competition and conducive
business climate leading to sustainable economic growth and stability
(Indonesia Codes of Good Corporate Governance, 2006).
16
In addition, good corporate governance is needed to prevent the
expropriation of shareholders by managers and to ensure the efficient
management of a company that has multiple owners. It is also needed
to attract the capital needed to pursue large and worthwhile projects
Sang-Woo Nam and Il Chong Nam (2004).
4. Audit
Generally audit is a systematic process of (1) objectively
obtaining and evaluating evidence regarding assertions about
economic actions and events to ascertain the degree of correspondence
between those assertions and established criteria and (2)
communicating the results to interested users
(www.accountingconcern.com).
An auditor's job is to ensure the integrity of financial data. When
performing an audit, an auditor will request access to the business'
financial records. This includes the ledgers, lists of receipts and
expenditures, bank balances, records of physical assets owned or
leased and many other records. The auditor will also interview
personnel and review the business' accounting system and its internal
controls. In essence, the auditor will review any activity that affects
the business' finances (www.fasb.org).
Audits exist because they add value through easing the cost of
information asymmetry, not just because they are required by law. For
example, a privately-held company that does not issue securities on a
17
public exchange might engage a firm to audit its financial statements
in order to obtain more desirable loan terms from a financial
institution. Without the audit, the lending party would not have
assurance as to whether or not the company's financial position is
accurate. In turn, the lender could price protect (raise their price)
against this information asymmetry.
An auditor working for a private business may review a client's
banking and other financial statements, to verify that they have been
correctly prepared and appropriately reported as required by the law.
Auditors must keep themselves educated of any changes in law that
will affect how their clients must report financial information. It is
important that the auditor be able to give an unbiased evaluation of a
client's records.
Auditors are not expected to guarantee that 100 percent of the
transactions are recorded correctly. They are only required to express
an opinion as to whether the financial statements, taken as a whole,
give a fair representation of the organization's financial picture. In
addition, audits are not intended to discover embezzlements or other
illegal acts. Therefore, a "clean" or unqualified opinion should not be
interpreted as an assurance that such problems do not exist.
a. Audit Committee
Pickket (2003) defined audit committee as a standing committee
of the main board and tends to consist of a minimum of three non-
18
executive directors. The audit committee is increasingly seen as one of
the cornerstones of corporate governance. Many argue that the success
of an organization’s corporate governance arrangements relies in part
on the success of the established audit committee.
Under Sarbanes-Oxley Act in 2002, audit committees are
ultimately responsible for the appointment of external auditors,
although in practice, managers may also play a significant role. To
emphasize the importance of audit committees, there are several
sections of the SOX (i.e., Sections 204, 301, and 407) dedicated to the
responsibilities and composition of audit committees Lisic and Zhou
(2013).
DeZoort et al. (2002) in Ika and Ghazali (2011) explained that an
effective audit committee has qualified members with the authority and
resources to protect stakeholder interests by ensuring reliable financial
reporting, internal controls, and risk management through diligent
oversight efforts. It asserts that the ultimate goal of audit committee
service is to protect shareholders’ interests, and the way audit
committee can achieve this goal is through the use of qualified
members with adequate authority and resources to provide diligent
oversight.
1. Audit Committee in Indonesia
Audit committee in Indonesia is relatively new as it has
been regulated after the occurrence of the 1997 Asian
19
financial crisis Ika and Ghazali (2011). Initially, audit
committee formation was voluntary BAPEPAM (2000). It
was made mandatory to all listed companies after the
issuance of BAPEPAM (2004) concerning Guidelines on
Establishment and Working Implementation of audit
committee.
According to BAPEPAM rule (2004), audit committee
membership must comprise of at least three members, one of
whom shall be an independent commissioner and
concurrently the chairman of the audit committee, while the
others shall be external independent parties. Additionally, at
least one of the audit committee shall have accounting and/or
finance expertise. The responsibility of the audit committee is
to provide independent professional advice to the board of
commissioners (BOC) and identifying matters that require the
attention of the Board of Commissioner.
Regarding National Committee on Governance (2006),
the function of the Audit Committee is to assist the Board of
Commissioners to ensure that:
1) Financial reports are presented appropriately in accordance
with the generally accepted accounting principles.
2) Internal control structure is adequate and effective.
3) Internal and external audits are conducted in accordance with
20
applicable audit standards.
4) Audit findings are followed up by the management.
The Audit Committee shall review candidates for
external auditors including their remuneration, and submits
its recommendation to the Board of Commissioners. Audit
committee also has the responsibility to review the
independence and objectivity of a public accountant, and to
review the audit adequacy conducted by public accountant
IDX (2004a, b).
BAPEPAM (2004) rule also provides guidelines on
some aspects such as the definition of independent for audit
committee members, the authority of audit committee, and
audit committee meetings. In terms of audit committee
meetings this rules stipulates that the number of audit
committee meetings held during a year should be at least the
same with the minimum requirement of BOC meetings as
stated in company’s article of association.
In terms of Audit Committee reporting, IDX (2004a, b)
rule stipulates that audit committee must submit a report on
its activity to the BOC periodically at least once in three
months. Audit committee reports must be disclosed in the
annual reports as part of company’s corporate governance
disclosures BAPEPAM (2006). The disclosures should at
21
least provide information on:
1. Name, position, and short biography of audit committee
member.
2. Job description and responsibility of audit committee.
3. Number of meetings held during the financial year and
detail attendance of each audit committee member.
Summary of the activities of audit committee in discharging its duties
during a financial year.
5. Financial Report
The financial report have an important role because financial
reports intended to provide information regarding the financial
position, performance and changes in financial position of an
enterprise that benefits a large number of users in making economic
decisions.
According to Kieso et al (2010) states that the Financial report
are meant to present the financial information of the entity in question
as clearly and concisely as possible for both the entity and for readers.
Financial report for businesses usually include: income statements,
balance sheet, statements of retained earnings and cash flows, as well
as other possible statements. Financial Accounting Foundation (2010)
stated that the objective of general purpose financial reporting is to
provide financial information about the reporting entity that is useful
to existing and potential investors, lenders, and other creditors in
22
making decisions about providing resources to the entity. Those
decisions involve buying, selling, or holding equity and debt
instruments and providing or settling loans and other forms of credit
Decisions by existing and potential investors about buying, selling, or
holding equity and debt instruments depend on the returns that they
expect from an investment in those instruments; for example,
dividends, principal and interest payments, or market price increases.
Similarly, decisions by existing and potential lenders and other
creditors about providing or settling loans and other forms of credit
depend on the principal and interest payments or other returns that
they expect. Investors, lenders, and other creditors expectations about
returns depend on their assessment of the amount, timing, and
uncertainty of (the prospects for) future net cash inflows to the entity.
Consequently, existing and potential investors, lenders, and other
creditors need information to help them assess the prospects for future
net cash inflows to an entity.
6. Timeliness
Financial statements have four qualitative characteristics to be
useful for making economic decision, which are perceivable,
relevance, reliable, and comparable. To meet the characteristic of
relevance, financial statements should be provided in a timely basis.
Timeliness of financial reporting also can be viewed as company
means to be transparent Merdikawati and Arsjah (2011). According to
23
Prickett (2002), and Kulzick (2004), transparency from the
perspective of financial statements users includes eight aspects as
follows, accuracy, consistency, appropriateness, completeness, clarity,
timeliness, convenience, and governance and enforcement.
Timely release of corporate financial report has long been
recognized as one of the qualitative attributes of financial reporting
(Accounting Principle Board, 1970; Financial Accounting Standards
Board, 1980). In the capital market where corporate financial
information is a primary source of information to shareholders, timely
publication of the information is crucial Ika and Ghazali (2011). For
investors, timely reporting reduces the uncertainty related to
investment decision Ashton et al. (1989) and asymmetric
dissemination of financial information among stakeholders in the
capital market Jaggi and Tsui (1999).
Timeliness of financial reporting has allowed the information to
be available for decision-makers before it loses its capacity to
influence decisions. Greater benefit will be derived from the timely
reporting of financial statement, and specifically timely reporting
refers to the shorter time between the date of accounting financial
year-end and the date of independent auditor issuing an audited annual
report (Shukeri and Nelson).
Timeliness of financial reporting is crucial to all users of
financial reports. This is because most users particularly the
24
shareholders and potential investors rely on the audited financial
reports before deciding whether to retain as shareholders or to become
investors of a company. Reliability of the reports would increase when
external auditor audits it. In Exposure Draft of an Improved
Conceptual Framework for Financial Reporting (2008), which is
issued by International Accounting Standard Board, also includes that
reliability as an essential qualitative characteristic of decision-useful
financial reporting information Hasyim and Rahman (2011).
There is several researches used timeliness. Ika and Ghazali
(2011) defined timeliness as the number of days that elapses between
a company’s financial year-end and the day of which its audited
financial statement is received by the IDX. Al- Ajmi (2008) measured
timeliness of financial reporting by audit lag, interim period, and
reporting lag. Interim period is period between audit lag and reporting
lag. Al-Ajmi (2008) findings indicated that the audit lag and the
interim period is shorter in big companies and companies that
announced good news for investors. Reporting lag is shorter in
companies that announced good news for investors and on
government regulation. Audit lag and reporting lag is longer for high
leverage companies. In the other side, Merdekawati and Arsjah (2011)
assessed timeliness by using audit lag and reporting leg.
25
In this research, audit lag is used to assess the timeliness.
a. Audit Lag
Audit lag were measured by number of day between financial
statements date to audit report date. There were many factors that
cause the audit lag, such as firm size, regulation, business sector
(industry), internal audit factors, auditor’s size, audit opinion,
announcement of profit/loss, enterprise risk, corporate governance,
and good news or bad news contained in the financial statements.
Dyer and McHugh (1975) found that only firm size that has effect
on audit lag.
B. Previous Research
Table 2.1
Previous Research
No Researcher
(Year) Title
Variable Result
Similarity Difference
1 Naimi et al
(2010)
Audit Committee
and Timeliness of
Financial
Reporting:
Malaysian Public
Listed Companies
Audit
Committee
Independence
Audit
Committee
Expertise
Audit
Committee
Size
Audit
Committee
Meeting
Audit
Committee
Size, and Audit
Committee
Meeting has
significant to
Audit Report
Lag
2 Naimi et al.
(2011)
Timeliness of
Annual Audit
Report: some
empirical
evidence from
Malaysia
Audit
Committee
Expertise
Audit
Committee
Size
Audit
Committee
Board
Independen
ce
None of the
independent
variable has
significant
effect toward
Audit Report
Lag
26
No Researcher
(Year) Title
Variable Result
Similarity Difference
Meeting
3 Wijaya and
Rahardja
(2012)
Pengaruh
Karakteristik
Komite Audit
Terhadap Audit
Report Lag
Audit
Committee
Independence
Audit
Committee
Expertise
Audit
Committee
Size
Audit
Committee
Meeting
Company
Size
Profitability
External
Auditor
Audit
Committee
Size and Audit
Committee
Expertise has
significant
effect toward
to Audit
Report Lag
4 Puasa et al
(2014)
Audit Committee
and Timeliness of
Financial
Reporting
Malaysian Public
Listed Companies
AC
Independence
, AC Size,
AC
Expertise,
Profitability,
Company
Size, Type of
External
Auditor, and
Company
financial
year-end.
AC Non
Independen
ce, AC
Activity,
Leverage,
Managerial
Ownership,
and Audit
Opinion
AC
Independence,
and Audit
Activity has
significant
influence
toward
timeliness of
submission
financial report
5 Vuko and
Cular
(2014)
Finding
determinants of
audit delay by
pooled OLS
regression
analysis
Profitability,
Company
Size, and
Audit
Committee.
Audit Firm
Type, Audit
Opinion, ,
Leverage,
Audit effort,
and
Absolute
level of
total accrual
Profitability,
Leverage, and
Audit
Committee has
significant
influence
towards audit
delay
27
C. Logical Framework
Figure 2.1
Logical Framework
Audit Committee Independence (X1):
Audit Committee Expertise (X2):
Audit Committee Size (X3):
Audit Committee Meeting (X4):
Control Variables:
1. Company Size (X5)
2. Auditor Firm’s Size (X6)
3. Profitability (X6)
Timeliness:
Audit Lag (Y)
Descriptive Statistic
Clasical Assumption Test
Hypothesis Test:
Multiple Linear Regression
Analysis
Conclusion
28
D. Hypothesis
Hypothesis is considered as a tentative statement that proposes a possible
explanation to some phenomenon or event. Based on the literature review
previously, the hypothesis development can be describe as:
1. Audit Committee Independence
BAPEPAM (2004) regulated at least 3 members of audit
committee consist of 2 members from outside parties and lead by an
independent commissioner. If there are 2 independents commissioners,
one of them should be a leader. Nor et al (2010) and Hasyim and
Rahma (2011) in Wijaya and Rahardja (2012) stated that audit
committee independence has negative influence to the audit lag.
H1: Audit Committee Independence has influence to audit lag
2. Audit Committee Expertise
BAPEPAM (2004) regulated at least 1 of audit committee member
has background in and experience in accounting or finance. The
expertise of audit member could increase the quality of financial report
related with timely manner. Purwati (2006), and Hasyim and Rahma
(2011) in Wijaya and Rahardja (2012) stated that audit committee
expertise has negative influence to audit lag.
H2: Audit Committee Expertise has influence to audit lag
3. Audit Committee Size
BAPEPAM (2004) regulated at least 3 members of audit
committee consist of 2 members from outside parties and lead by an
29
independent commissioner. If there are 2 independents commissioners,
one of them should be a leader. With the varieties of public company
raise a statement bigger audit committee increase the quality of
financial report and reduce audit lag. Purwati (2006), and Nor et al
(2010) in Wijaya and Rahardja (21012) stated there are negative
influence between audit committee size and audit lag.
H3: Audit Committee Size has influence to audit lag
4. Audit Committee Meeting
FCGI in Wijaya and Rahardja (21012) stated at least 3 or 4
meeting held in a year to fulfill the obligation and responsibility. Nor et
al (2010) in Wijaya and Rahardja (21012) stated that audit committee
meeting has negative influence to the audit lag.
H4: Audit Committee Meeting has influence to audit lag
30
CHAPTER III
RESEARCH METHODOLOGY
A. Scope of Research
This research uses quantitative method. The research design or
relationship between variables uses causality. Causality is a type of
relationship, which can be seen from the characteristics of the relationship
between independent and dependent variables. When the dependent variable
explained or influenced by independent variables, it can be stated that
variable X cause variable Y.
The aim of this study is to examine the influence of audit committee
effectiveness to the timeliness submission of financial reports. In this
research, audit committee is the independent variable proxies by audit
committee independence, audit committee expertise, audit committee size,
audit committee meeting, company size, external auditor, and profitability.
Meanwhile, the dependent variable is timeliness proxy by audit lag. The
population in this study is companies listed on the Indonesia Stock Exchange
(BEI) for the period 2013, which fulfill the selected criteria for this research.
B. Sampling Method
Sampling method is kind of method that taken data from population.
Sample is a part of the number, and characteristics possessed by the
population. Research will not take all the populations due to limited funds,
manpower and time. So, sample can represent the population. Researcher
31
uses non-probability sampling, which means that the elements of the
population do not have the same chance to select as a sample.
This research will conduct purposive sampling. Purposive sampling is
divided into two types, quota sampling and judgmental sampling. In this
research, researcher will use judgmental sampling as sampling method. In
judgmental sampling, subjects selected on the basis of their expertise in the
subject investigated.
The population used in this research is companies listed on the
Indonesia Stock Exchange in 2013. The choice of choose all listed companies
in 2013 because more companies have more complex diversity which great
way to examine the effect the timeliness of the financial report. The sample
selection criteria in this in this research are as follow:
1. Companies listed in IDX period of 2013.
2. Companies have published its annual report publicly period 2013.
3. Companies have the data of audit committee independence, audit
committee expertise, audit committee size, audit committee
meeting, company size, external auditor, profitability that will be
tested in its annual report.
C. Data Collection Method
The data used in this research is secondary data. Secondary data is
data that available from previous research, case studies, and library records,
online data, company websites, and the internet in general Sekaran and
Bougie (2010).
32
Secondary data used in this study are the financial report of companies
listed on the Indonesia Stock Exchange in 2013. The data obtained in this
study are gathered from the Indonesian Capital Market Directory (ICMD),
www.idx.co.id, through Corner, Capital Market Reference Center (CMRC) at
the Indonesia Stock Exchange (IDX).
D. Data Analysis Method
The method of analysis data in this research is using statistical
calculations; the name of application is SPSS (Statistical Product and Service
Solutions). Once the necessary data have been collected in this study, the data
analysis can be performed by descriptive statistics and hypothesis test. The
descriptions of the data analysis method are as follows:
1. Descriptive Statistics
The data in this study were analyzed with descriptive statistics. The
descriptive statistical testing is a transformation process of research data
by using tabulation in order to make the data understandable and easily
being interpreted. Generally, tabulation is used by researcher to obtain
information about characteristics of primary variable in research. The
measurement applied in this descriptive statistical testing depends on the
type of scale of measurement. The descriptive statistical testing obtains a
picture or describes data that can be seen from median, mean, mode,
standard deviation, variance, maximum and minimum.
2. Classical Assumption
a. Normality Test
33
According to Hair et al. (2006) cited in Adinugraha et al (2007),
the purpose of the normality test is to determine whether the
regression model variables are normally distributed or not. The
normality test conducted to determine whether the inferential statistics
to be used is a parametric or non-parametric statistics. There are two
ways to test, i.e. the graph analysis and statistical tests Ghozali (2011).
Researcher chooses two tools to test whether the data is normally
distributed or not.
1) Graph Analysis
When using graph analysis, normality test can be done by looking
at the spread of the data (dots) on the diagonal axis of the graph or
by looking at the histogram from the residual.
a) If the dots spread around the diagonal line and follow the
direction of the diagonal line, the regression model meets the
normality assumption.
b) If the dots spread away from diagonal lines and / or do not
follow the direction of the diagonal line, the regression model
does not meet the normality assumption.
2) Statistical Test
Kolmogorov-Smirnov Z (1 - Sample KS) uses for making
decision regarding the normality test.
(a) If the value Asymp. Sig. (2-tailed) less than 0.05, it means
that the data are not normally distributed.
34
(b) If the value Asymp. Sig. (2-tailed) of more than 0.05, it
means that the data are normally distributed.
b. Multicollinearity Test
Multicollinearity test aims to test whether the regression model
found a correlation between the independent variables Ghozali (2011).
A good regression model should not happen correlation between the
independent variables. To detect the presence or absence of
multicollinearity in the regression model can be seen from the value of
tolerance and the variance inflation factor opponent (VIF).
Multicollinearity views of the tolerance value <0.10 or VIF> 10. Both
of these measurements indicate each independent variable, which is
explained by the other independent variables.
c. Heteroscedasticity Test
Heteroscedasticity test aims to test if there is variance difference
from residual of one observation to (an) other observation(s) occurred
Santoso (2010). Furthermore, if the variance remains constant, it is
called homoscedasticity and if it is changing or different, it is called
heteroscedasticity Santoso (2010). A good regression model is
homoscedasticity or there is no heteroscedasticity.
In this study, heteroscedasticity test can be viewed by using the
Scatter plot graph between the standardized predicted variable
(ZPRED) and studentized residual (SRESID). Y-axis becomes the axis
35
that has been predicted and the X-axis is the residual (Y predicted-Y
actual). Decision-making can be made by this consideration:
1) If there is a specific pattern, like dots, which form well-ordered
pattern (waving, spreading then narrowing), it indicates that
heteroscedasticity occurs.
2) If there are no well-ordered pattern and the dots spread above and
below 0 in Y-axis, heteroscedasticity does not prevail.
d. Autocorrelation Test
Autocorrelation test aims to find if there is correlation in linear
regression model between disturbances in t period with previous
period (t-1) Santoso (2010). A good regression model is a regression
that is free from autocorrelation.
Autocorrelation can be determined using DW (Durbin- Watson)
Test and Breusch-Godfrey Test.
Table 3.1
DW (Durbin- Watson) Test
Formula Decision
DW < -2 Positive Autocorrelation
-2 < DW < +2 No Decision
DW > +2 Negative Autocorrelation
36
3. Multiple Regression Analysis
Multiple regression analysis used to test the effect of two or
more independent variables toward the dependent variable Ghozali
(2011). Regression analysis divided into two kinds, simple regression
analysis (if there is only one independent variable) and multiple
regression analysis (if there is more than one independent variables).
Multiple regression analysis can be measured partially (indicated by
coefficient of partial regression) jointly indicated by coefficient of
multiple determination or R2.
Independent variable in this research is audit committee
effectiveness, dependent variable is timeliness, which is separated into
audit lag and report lag, and control variables are financial condition,
company size, and audit firm’s size. Structural equation model that
proposed as an empirical model is as follows:
Y1 = β0 + β1X1 + β2X2 + β3X3 + β4X4 + β5X5 + β6X6 + β7X7 + ε
Where:
Y1 = Audit Lag
X1 = Audit Committee Independence
X2 = Audit Committee Expertise
X3 = Audit Committee Size
X4 = Audit Committee Meeting
X5 = Company Size
X6 = Auditor Firm’s Size
37
X7 = Profitability
β1 =Regression Variable Audit Committee Independence
β2 = Regression Variable Audit Committee Expertise
β3 = Regression Variable Audit Committee Size
β4 = Regression Variable Audit Committee Meeting
β5 = Regression Variable Company Size
β6 = Regression Variable Auditor Firm’s Size
β6 = Regression Variable Profitability
ε = Error
a. Simultaneous Regression Analysis (Test - F)
Essentially, F- test has purpose to know whether among
independent variables simultaneously have significant influence toward
dependent variable. Independent variables in this research are good
corporate governance and ownership structure whereas dependent
variable is firm value. So, F- test has a function to know the influence
among good corporate governance and ownership structure towards
firm value. α used for this research is 0.05 (5%) with assumption:
1) α > 5%, Ho is accepted.
2) α < 5%, Ho is rejected.
b. Partial Regression Testing (T-test)
T-test basically indicates the influence of independent variable to
dependent variable. The value of t-test is compared with the degree of
believes.
38
The level of significance used in this test is 5% or (α) 0.05. The
decision-making is based on probability values:
1) If the value Significance is < error rate (α = 0.05), then Ho1 and
Ho2 are rejected
2) If the value Significance is > error rate (α = 0.05), then Ho1 and
Ho2 are accepted.
4. Coefficient Determination Test (R2)
Coefficient determination (R2) is a statistical measurement of how
well the regression line approximates the real data point. By knowing
the value of R2, it can determine the magnitude contribution of
independent variables toward the dependent variable. R2 expresses a
value between zero and one.
If R2 is near to 0, the regression model cannot explain most of
data variations. In this case, the regression model fits the data poorly.
On the other hand, if R2 is near to 1, the regression model can explain
most of the variation in the dependent variable. In other words, the
regression model fits the data well Sekaran and Bougie (2010).
E. Variable Operation
1. Independent Variable
This section will describe the definition of independent variable,
along with the way to operate and to measure. Independent variables are
variables that influence or cause the change of dependent variable.
According to Wijaya and Rahardja (2012), the proxies of Audit Committee
39
are Audit Committee Independence, Audit Committee Expertise, Audit
Committee Size, and Audit Committee Meeting.
a. Audit Committee Independence
Audit committee independence described as a situation
where the members of the audit committee should be recognized
as an independent party. Audit committee members also must be
free from any liability to the company. In addition, the audit
committee members also do not have a particular interest to
company and must be free from circumstances that cause others
to doubt the nature of its independence. The variable measured
by the number of members of the Audit Committee. The data is
obtained from the annual report as well as the Indonesian
Capital Market Directory.
b. Audit Committee Expertise
In accordance with Bapepam regulation, the audit
committee must have at least three (3) members of the audit
committee, one of whom is an independent commissioner, who
acts as chairman of the audit committee, while the other two
members must be independent parties, one of which must have
accounting expertise and / or financial (financial expertise).
Audit committee comprised of at least one member who has
expertise in the financial sector will be more effective in
detecting material misstatements. This variable is measured by
40
the proportion of members of the Audit committee were
competent with the number of the Audit committee member.
The data is obtained from the annual report as well as the
Indonesian Capital Market Directory.
c. Audit Committee Size
Based on the Circular of directors PT.Bursa Efek
Indonesia No.SE-008 / BEJ / 12-2001 December 7, 2001 and
Guidelines for the Establishment of Audit Committee regarding
the membership of the audit committee, stated that the audit
committee member at least three (3) members, including the
chairman of the audit committee. This variable is measured from
the number of members of the Audit Committee. The data is
obtained from the annual report as well as the Indonesian
Capital Market Directory.
d. Audit Committee Meeting
Based on guidelines, Bapepam mention that the audit
committee shall hold a meeting of at least 4 (four) times a year
to discuss the financial reporting with external auditors. This
variable is measured on how many times the audit committee to
conduct meetings in a year.
2. Dependent Variable
The purpose of this research is to examine whether audit committee
effectiveness has an association with the timeliness of reporting.
41
Therefore, the dependent variable is timeliness of reporting. In this
research, timeliness of reporting is defined as the number of days that
elapses between a company’s financial year-end and measured into one,
namely:
a. Audit Lag
Audit lag is measured by number of days between
financial statements date until the date of the audit report Dyer
and McHugh (1975), McGee (2009), Khasharmeh and Aljifri
(2010), Rachmawati (2008) Al-Ajmi (2008); and Perdhana,
(2009). According to Elder et al. (2008), the date of the audit
report is the date when audit fieldwork has been completed. If
there are events after the signing of the audit report, which
significantly affects the financial statements, it will be possible
for dual-dated audit report. Dual-dated audit report is an audit
report that takes two dates, which is the date of audit fieldwork
completion and the date of incident investigation completion
(Elder et al., 2008). This study will use the most recent date for
dual-dated audit report.
3. Control Variable
Consistent with Wijaya and Rahardja (2012), three corporate
characteristics namely company size, auditor firm size, and profitability
are included as control variables.
a. Company Size
42
Company Size is measured by a natural logarithm of the
companies’ total assets. This control variable is used in order to
control the variable of audit committee effectiveness to
timeliness because large companies are often followed by a
large number of investment and media analysts who demand for
timely reporting in order to review their performance for
investment decision-making Stephen Owusu-Ansah and Stergios
Leventis (2006) and the large companies have higher resources,
which enable them to pay the auditor a higher audit fees to get
the audit done in a shorter period of time Al-Ajmi, (2008).
b. External Auditor
External Auditor is represented by dummy variable by
classifying the Big Four public accounting firm and non-Big
Four public accounting firm. The Big Four refers to Klynveld
Peat Marwick Goerdeler (KPMG), Ernst & Young,
PricewaterhouseCoopers and Deloitte Touche Tohmatsu.
Companies that are audited by public accounting firm associated
with the Big Four was given the value ‘1’ while companies
audited by non-Big Four public accounting firm was given the
value ‘0’.
This variable is used as control variable because it is more
likely that large audit firms will perform audit faster as they may
have the advantage of using presumably more efficient audit
43
technology Newton and Ashton (1989) in Ika and Ghazali
(2011). In addition, the international audit firms (Big 4 auditors)
have a tendency to finish audit faster to preserve their reputation
Afify (2009) in Ika and Ghazali (2011).
c. Profitability
Profitability is an indicator of success in the company
(management activities) to getting profit. More higher the
company’s ability to getting profit, indicate the higher level of
effectiveness in the company’s management. Profitability can be
measured by Return on Assets (ROA) by using the formula
profitability divided by total assests Keown (2006:87) in Wijaya
and Rahardja (2012).
44
Table 3.2
Research Operational Variable
Variable Measurement Scale
Audit Committee
Independence (ACI)
The total number of audit
committee independence
Ratio
Audit Committee
Expertise (ACE)
The total number of audit
committee expertise
Ratio
Audit Committee Size
(ACS)
The total number of audit
committee
Ratio
Audit Committee
Meeting (ACM)
The total number of audit
committee meeting
Ratio
Company Size (CS) The natural logarithm of
the company total assets
Ratio
External Auditor (EA) Dummy, “1” for Big 4
and “o” for Non-Big 4
Numerical
Profitability (ROA) Return on Assets (ROA)
by using the formula
profitability divided by
total assets
Ratio
Timeliness (AL) Total number of days
between financial
statements date until the
date of the audit report
Ratio
45
CHAPTER IV
RESULT AND ANALYSIS
A. Overview Research Object
1. Description Research Object
This chapter presents the findings of the research. The populations in
this study are all companies that go public and listed on the Indonesian
Stock Exchange (IDX) in 2013. The selection of sample is chosen by
criteria of population that have explained in research methodology in
previous chapter that is taken as annually in 2013. The focus of this
research is to look at the effect of audit committee independent, audit
committee expertise, audit committee size and audit committee meeting,
company size, big 4 auditor, and profitability to the timeliness of company
in submitted their financial report.
Listed companies often get considerable concern from investors for
investment purposes, so the financial audit report can be very useful when
presented on time to investors as consideration in investing. The total
numbers of companies are being populated for this research is 486
companies listing on the Indonesian Stock Exchange in 2013.
46
Table 4.1 below presents the sample selection process based on
established criteria.
Table 4.1
Sample Selection Process Based on Criteria
No Criteria Total
1. Companies listed on the Indonesian Stock Exchange in 2013 486
2. The company did not have complete data related to the studied
variables. (133)
3. Outlier Test (65)
Total sample during research period 288
Source: Secondary Data Processed
2. Description of Selected Companies’ Sample
Description of Study SampleObject of the research are companies which
is grouped into two categories based on the timeliness submission their
financial report, the categories are:
a. Companies that are submit their financial report on time to
BAPEPAM.
b. Companies that are not on time in submit their financial reports to
BAPEPAM.
47
Table 4.2
Company Distribution which is On Time and Delay on
Submitting Financial Report during Study Period
Categories of
Companies
Years of Research
2013
Total %
Companies On
Time 280 97.3%
Companies Not
On Time 8 2.7%
Total 288 100
Source: Secondary Data Processed
Distribution of companies based on the timeliness their
financial reporting for the year period 2013 is shown on Table 4.2.
It is known that at year 2013 the company reported its financial
statements on time as much as 280 (97.3%) companies. As for the
companies that report financial statements delay in year 2013 as
much as 8 (2.7%) companies.
Companies that delay in submitting financial report
according to a report from BAPEPAM and LK caused by several
things, such caused by technical problems the parent’s company
consolidated with subsidiaries. An increasing number of companies
who are delay in submitting financial statements according to a
report from Bapepam-LK because of several things, as a follows:
1. Related to the company's internal problems, such as:
the preparation of human resources, information
48
systems, and the willingness of the company in
submitting their financial report.
2. There are several companies that perform massive debt
restructuring, so it took a long time for the preparation
of financial report.
In terms of regulations in Indonesia, since the issuance the
Latter of Chairman of the Capital Market Supervisory Agency and
Financial Institution number 40/BL/2007 about Submission Period
the periodical Financial Statements and Annual Reports going
public companies listed on the (IDX) Indonesia Stock Exchange
push companies listed to report their financial reports on time
before the expiry date which is on March 31 (90 days). Although
Bapepam will provide tough sanctions to companies that are delay
in submitting their financial report, but there are still some
companies that do not submit financial reports on time. It is seen
97.3% of companies that on time in submit their financial report
while the remaining 2.7% of companies has been late.
Table 4.3
Distribution ACI (Audit Committee Independence) to the timeliness
submission financial report
No ACI Category On Time Delay Total
Total % Total % Total %
1 <3 Person 7 2.5% 0 0% 7 2.43%
2 3 Person 245 87.5% 7 87.5% 252 87.5%
49
3 >3 Person 28 10% 1 12.5% 29 10.07%
Total 280 100% 8 100% 288 100%
Source: Secondary Data Processed
Table 4.3 shows the number of companies that on time and
delay on submit their financial report based on ACI (Audit
Committee Independence) for year 2013. In the total shows that
companies which is on time submit their financial report have
independence member less than 3 persons 7 companies or 2.3%,
have member 3 persons 245 companies or 87.5%, and have more
than 3 persons 28 companies or 10%. At the other side, companies
that have delay in submit their financial report have member less
than 3 persons 0 companies, and companies have member 3 person
7 companies or 87.5%, meanwhile companies that have more than
3 persons 3 companies or 12.5%.
Table 4.4
Distribution ACE (Audit Committee Expertise) to the timeliness
submission financial report
No ACE Category On Time Delay Total
Total % Total % Total %
1 <2 Person 49 17.5% 0 0% 49 17.01%
2 2 Person 144 51.4% 7 87.5% 151 52.44%
3 >2 Person 87 31.1% 1 12.5% 88 30.55%
Total 280 100% 8 100% 288 100%
Source: Secondary Data Processed
Table 4.4 shows the number of companies that on time and
delay on submit their financial report based on ACE (Audit
Committee Expertise) for year 2013. In the total shows that
50
companies which is on time submit their financial report have
independence member less than 2 persons 49 companies or 17.5%,
have member 2 persons 144 companies or 51.4%, and have more
than 2 persons 87 companies or 31.1%. At the other side, there are
no companies that have delay in submit their financial report have
member less than 2 persons and companies have member 2 person
7 companies or 87.5%, meanwhile companies that have more than
2 persons 1 companies or 12.5%.
Table 4.5
Distribution ACS (Audit Committee Size) to the timeliness submission
financial report
No ACS Category On Time Delay Total
Total % Total % Total %
1 <3 Person 6 2.15% 0 0% 6 2.1%
2 3 Person 246 87.85% 7 87.5% 253 87.84%
3 >3 Person 28 10% 1 12.5% 29 10.06%
Total 280 100% 8 100% 288 100%
Source: Secondary Data Processed
Table 4.5 shows the number of companies that on time and
delay on submit their financial report based on ACS (Audit
Committee Size) for year 2013. In the total shows that companies
which is on time submit their financial report have independence
member less than 3 persons 6 companies or 21.5%, have member 3
persons 246 companies or 87.85%, and have more than 3 persons
28 companies or 10%. At the other side, there are no companies
that have delay in submit their financial report have member less
51
than 3 persons, and companies have member 3 person 7 companies
or 87.5%, meanwhile companies that have more than 3 persons 1
companies or 12.5%.
Table 4.6
Distribution ACM (Audit Committee Meeting) to the timeliness
submission financial report
No ACM Category On Time Delay Total
Total % Total % Total %
1 <4 Times 35 12.5% 0 0% 35 12.15%
2 4 Times 133 47.5% 4 50% 137 47.56%
3 >4 Times 112 40% 4 50% 116 40.27%
Total 280 100% 8 100% 288 100%
Source: Secondary Data Processed
Table 4.6 shows the number of companies that on time and
delay on submit their financial report based on ACM (Audit
Committee Meeting) for year 2013. In the total shows that
companies which is on time submit their financial report held
meeting less than 4 times 35 companies or 12.5%, held meeting 4
times 133 companies or 47.5%, and held meeting more than 4
times 112 companies or 40%. At the other side, there are no
companies that have delay in submit their financial report held
meeting less than 4, and companies held meeting 4 times 4
companies or 50%, meanwhile companies that held meeting more
than 4 times 4 companies or 50%.
52
Table 4.7
Distribution Company Size to the timeliness submission financial
report
No Company
Size Category
On Time Delay Total
Total % Total % Total Total
1 <25 15 5.35% 1 12.5% 16 5.55%
2 25-30 214 76.43% 5 62.5% 219 76.04%
3 >30 51 18.21% 2 25% 53 18.4%
Total 280 100% 8 100% 288 100%
Source: Secondary Data Processed
Table 4.7 shows the number of companies that on time and
delay on submit their financial report based on Company Size for
year 2013. In the total shows that companies which is on time
submit their financial report have value less than 25 15 companies
or 5.35%, have value between 25-30 214 companies or 76.43%,
and have value more than 30 51 companies or 18.21%. At the other
side, companies that have delay in submit their financial report
have value less than 25 1 companies or 12.5%, and companies have
value between 25-30 5 companies or 62.5%, meanwhile companies
that have value more than 30 2 companies or 25%.
Table 4.8
Distribution External Auditor to the timeliness submission financial
report
No External Auditor On Time Delay Total
Total % Total % Total %
1 Big 4 105 37.5% 1 12.5% 106 36.8%
2 Non Big 4 175 62.5% 7 87.5% 152 63.2%
Total 280 100% 8 100% 288 100%
Source: Secondary Data Processed
53
Table 4.8 shows the number of companies that on time and
delay on submit their financial report based on External Auditor for
year 2013. In the total shows that companies that is on time submit
their financial report used Big 4 Public Accountant 105 companies
or 37.5%, did not use Big 4 Public Accountant 17 5 companies or
62.5%. At the other side, companies that have delay in submit their
financial report used Big 4 Public Accountant 1 companies or
12.5%, and companies did not use Big 4 Public Accountant 7
companies or 87.5%.
Table 4.9
Distribution Profitability (ROA) to the timeliness submission financial
report
No ROA On Time Delay Total
Total % Total % Total %
1 <10% 216 77.14% 8 100% 224 77.78%
2 10-50% 62 22.14% 0 0% 62 22.14%
3 >50% 2 0.72% 0 0% 2 0.7%
Total 280 100% 8 100% 288 100%
Source: Secondary Data Processed
Table 4.9 shows the number of companies that on time and
delay on submit their financial report based on Profitability for
year 2013. In the total shows that companies which is on time
submit their financial report have value less than 10% 216
companies or 77.14%, have value 10-50% 62 companies or
22.14%, and have value more than 50% 2 companies or 0.72%. At
the other side, companies that have delay in submit their financial
54
report have value less than 10% 8 companies or 100%, and there
are no companies that have value gather than 10%.
B. Analysis and Discussion
1. Descriptive Statistic Analysis
The descriptive statistical testing obtains a picture or describes data
that can be seen from median, mean, mode, standard deviation, variance,
maximum and minimum. Variable used in this test are variable of audit
committee independent, audit committee expertise, audit committee size,
audit committee meeting, company size, external auditor, profitability and
financial report submission. Based on the test result, it is obtained the
descriptive statistic as much as 163 observation data coming from a single
study period in 2013.
Table 4.10
Descriptive Statistic
Descriptive Statistics
N Minimum Maximum Mean
Std.
Deviation
ACI 288 2.00 6.00 3.1111 .48116
ACE 288 .00 5.00 2.1771 .79188
ACS 288 2.00 6.00 3.1285 .52215
ACM 288 .00 44.00 6.0486 5.25162
CS 288 19.11 40.65 28.3165 2.32984
EA 288 .00 1.00 .3681 .48312
ROA 288 -1.00 .67 .0512 .11513
Audit Lag (AL) 288 41.00 101.00 79.4271 8.53043
Valid N (listwise) 288
Source: Output SPSS 20.0
55
Table 4.10 shows the descriptive statistic of each variable of the
research. Based on table 4.10, the result of the analysis using descriptive
statistic on ACI (Audit Committee Independence) indicates the minimum
value is 2.00 and the maximum value is 6.00. Average ACI variable is
3.1111 and the standard deviation is 0.48116, which is lower than average
value and indicate the data is distributed normally.
The result of the analysis using descriptive statistic on ACE (Audit
Committee Expertise) indicates the minimum value of ACE value is 0.00,
and the maximum value is 5.00. Average ACE variable is 2.1771 and the
standard deviation is 0.79188, which is lower than average value and
indicate the data is distributed normally.
The result of the analysis using descriptive statistic on ACS (Audit
Committee Size) indicates the minimum value of ACS value is 2.00, and
the maximum value is 6.00. Average ACS variable is 3.1285 and the
standard deviation is 0.52215, which is lower than average value and
indicate the data is distributed normally.
The result of the analysis using descriptive statistic on ACM (Audit
Committee Meeting) indicates the minimum value of ACM value is 0.00,
and the maximum value is 44.00. Average ACM variable is 6.0486 and the
standard deviation is 5.25162, which is lower than average value and
indicate the data is distributed normally.
The result of the analysis using descriptive statistic on CS
(Company Size) indicates the minimum value of CS value is 19.11, and
56
the maximum value is 40.65. Average CS variable is 28.3165 and the
standard deviation is 2.32984, which is lower than average value and
indicate the data is distributed normally.
The result of the analysis using descriptive statistic on External
Auditor (EA) indicates the minimum value of EA value is 00.00, and the
maximum value is 01.00. Average EA variable is 0.4294 and the standard
deviation is 0.49652.
The result of the analysis using descriptive statistic on Profitability
(ROA) indicates the minimum value of ROA value is -0.10, and the
maximum value is 0.40. Average ROA variable is 0.428 and the standard
deviation is 0.10979.
The result of the analysis using descriptive statistic on Audit Lag
(AL) indicates the minimum value of Timeliness submission value is
41.00, and the maximum value is 101.00. Average variable is 79.4271 and
the standard deviation is 8.53043, which is lower than average value and
indicate the data is distributed normally.
2. Classical Test Assumption
a. Normality Test
The purpose of the normality test is to determine whether
the regression model variables are normally distributed or not. A
good regression model is to have normal or nearly normal
distribution. In this research, to detect whether normally distributed
data or not, it can be done with using graph analysis namely
57
histogram graph Normal Probability Plot (P-P Plot) and statistical
analysis namely kolmogorov-smirnov test.
Figure 4.1
Histogram Graph
Source: Output SPSS 20.0
Figure 4.2
Normal P-P Plot Graph
Source: Output SPSS 20.0
58
According to the result of normality test using graph
analysis namely histogram graph showing a form of bell in
histogram graph and Normal Probability Plot (P-P Plot) showing
dots distribution along diagonal line, indicate that regression model
has meet the normality assumption. However, graph analysis can
emerge different interpretation among reader, so that statistical
analysis test is needed to ensure the interpretation mistake for
reading the graph. Table 4.11 below will show the result of
statistical analysis namely kolmogorov-smirnov test:
Table 4.11
Kolmogorov-Smirnov
One-Sample Kolmogorov-Smirnov Test
Unstandardiz
ed Residual
N 288
Normal Parametersa,,b Mean .0000000
Std. Deviation 7.12881064
Most Extreme
Differences
Absolute .078
Positive .063
Negative -.078
Kolmogorov-Smirnov Z 1.327
Asymp. Sig. (2-tailed) .059
a. Test distribution is Normal.
b. Calculated from data.
Source: Output SPSS 20.0
The result of Kolmogorov-Smirnov test on table 4.11 also
shows that the value of Kolmogorov-Smirnov 1.327 with the level
of significant probability 0059, the value of p > 0.05. So the
residual data is distributed normally. Therefore, regression model
used in this research has met the normality test assumption.
59
b. Multicollinearity Test
The aim from multicolinearity test is to test whether the
regression model found a correlation among the independent
variables. A good regression model should there is no correlation
among independent variables. In this research, to detect the
presence or absence of multicolinearity can be done by calculating
value of variance inflation factor (VIF) of each independent
variable.
Table 4.12
Multicolinearity Test Result
Coefficientsa
Model
Collinearity Statistics
Tolerance VIF
1 (Constant)
ACI .263 3.801
ACE .841 1.189
ACS .238 4.210
ACM .829 1.207
CS .876 1.142
EA .874 1.145
ROA .947 1.056
a. Dependent Variable: AL
Source: Output SPSS 20.0
Based on table 4.12 above, the result shows that there is no
value of variance inflation factor (VIF) of each independent
variable, which is less than 0.1 or more than 10. So, it can be
concluded that there is no multicolinearity.
60
c. Heteroscedasticity Test
The aim from heteroscedastisity test is to test whether the
regression model occur the variance inequality of the residual from
one observation to another observation. A good regression model is
homocedastisity or there is no heteroscedastisity. In this research,
heteroscedastisity test can be viewed with using the chart
Scatterplot between the predicted value of dependent variable
(ZPRED) and residual (SRESID).
Figure 4.3
Heteroscedasticity Test Result
Source: Output SPSS 20.0
From result of figure 4.3 shows that there is no clear
pattern, as well as the dots spread above and below zero (0) on the Y
axis. So, it can be concluded that there is no heteroscedastisity
(homocedasticity).
61
d. Autocorrelation
Autocorrelation test aims to test whether a regression model
there is a correlation between data in variable. A good regression
model is a regression that is free from autocorrelation. In this
research, autocorrelation test use the Durbin Watson (DW test).
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 107.257 5.724 18.737 .000
ACI 2.687 1.726 .152 1.556 .121
ACE -.496 .587 -.046 -.845 .399
ACS -8.991 1.674 -.550 -5.371 .000
ACM -.231 .089 -.142 -2.596 .010
CS -.169 .195 -.046 -.864 .388
EA -.053 .943 -.003 -.057 .955
ROA -15.271 3.802 -.206 -4.016 .000
a. Dependent Variable: AL
Table 4.13
Autocorrelation Test Result
Model Summaryb
Model R R Square
Adjusted R
Square
Std. Error of
the Estimate
Durbin-
Watson
1 .549a .302 .284 7.21737 2.019
a. Predictors: (Constant), ROA, ACE, ACM, EA, CS, ACI, ACS
b. Dependent Variable: AL
Regarding Durbin Waston table, value of dL and dU are
1.696 and 2.159. Based on table 4.13 above, the result shows that
value of Durbin-Watson (DW) is 2.019, which mean 1.696 < 2.019
62
< 2.159. So it can be concluded that the regression model do not
have autocorrelation.
3. Multiple Regression Analysis
Multiple regression analysis used to test the effect of two or
more independent variables toward the dependent variable. In this
research, Independent variables are ACI (number of independent
audit committee), ACE (number of expertise audit committee),
ACS (number of audit committee), ACM (number of audit
committee meetings), Company Size (natural logarithm of total
asset), External Auditor (big 4 and non-big 4 public accountant),
Profitability (ROA), and dependent variable is audit lag (days
elapses between January 1st to date of submitted financial report.
Table 4.14
Result of Multiple Regressions
Model
Unstandardized Coefficients
Standardized
Coefficients
B Std. Error Beta
1 (Constant) 107.257 5.724
ACI 2.687 1.726 .152
ACE -.496 .587 -.046
ACS -8.991 1.674 -.550
ACM -.231 .089 -.142
CS -.169 .195 -.046
EA -.053 .943 -.003
ROA -15.271 3.802 -.206
Source: Output SPSS 20.0
63
The result of multiple regression analysis has been
explained in table 4.16. The result of multiple regression analysis
with using significance 5% obtained the following equation:
Y = 107.257 + 2.687X1 -0.496X2 -8.991X3 -0.231X4 -0.169X5 -
0.053X6 -15.271X7 +ε
From the multiple linear regression equation above, it can
be explained for each variable as follows:
1. Constant at 107.257 units stated that if there is no influence or
change in audit committee independence, audit committee
expertise, audit committee size, audit committee meeting,
company size, external auditor, and profitability then the value
of firm value will be 107.257.
2. Regression coefficient of Audit Committee Independence (X1)
marked positive at 2.687. It shows that the influence of Audit
Committee Independence on the Audit Lag is positive, which
means that if the value or number of Audit Committee
Independence is increased by one point, then Audit Lag will
increase by 2.687 or on the contrary, with assumption variables
X2, X3, X4, X5, X6 and X7 remain or unchanged.
3. Regression coefficient of Audit Committee Expertise (X2)
marked negative at -0.496. It shows that the influence of Audit
Committee Expertise on the Audit Lag is negative or opposite
direction, which means that if the value or number of Audit
64
Committee Expertise is increased by one point, then Audit Lag
will decrease by -0.496 or on the contrary, with assumption
variables X1, X3, X4, X5, X6 and X7 remain or unchanged.
4. Regression coefficient of Audit Committee Size (X3) marked
negative at -8.991. It shows that the influence of Audit
Committee Size on the Audit Lag is negative or opposite
direction, which means that if the value or number of Audit
Committee Size is increased by one point, then Audit Lag will
decrease by -8.991 or on the contrary, with assumption
variables X1, X2, X4, X5, X6 and X7 remain or unchanged.
5. Regression coefficient of Audit Committee Meeting (X4)
marked negative at -0.231. It shows that the influences of
Audit Committee Meeting on the Audit Lag is negative or
opposite direction, which means that if the value or number of
Audit Committee Meeting is increased by one point, then
Audit Lag will decrease by -0.231 or on the contrary, with
assumption variables X1, X2, X3, X5, X6 and X7 remain or
unchanged.
6. Regression coefficient of Company Size (X5) marked negative
at -0.169. It shows that the influence of Company Size on the
Audit Lag is negative or opposite direction, which means that
if the value or number of Company Size is increased by one
point, then Audit Lag will decrease by -0.169 or on the
65
contrary, with assumption variables X1, X2, X3, X4, X6 and
X7 remain or unchanged.
7. Regression coefficient of External Auditor (X6) marked
negative at -0.053. It shows that the influence of External
Auditor on the Audit Lag is negative or opposite direction,
which means that if the value or number of External Auditor is
increased by one point, then Audit Lag will decrease by -0.053
or on the contrary, with assumption variables X1, X2, X3, X4,
X5 and X7 remain or unchanged.
8. Regression coefficient of Profitability (X7) marked negative at
-15.271. It shows that the influence of Profitability on the
Audit Lag is negative or opposite direction, which means that
if the value or number of Profitability is increased by one
point, then Audit Lag will decrease by -15.271 or on the
contrary, with assumption variables X1, X2, X3, X4, X5 and
X6 remain or unchanged.
66
a. Simultaneous Significance Testing (F- Test)
Test of F statistic is basically indicates whether independent
variables altogether can influence the dependent variable. In this
research, F test done by seeing probability value.
Table 4.15
Result of F-Test
ANOVAb
Model
Sum of
Squares df Mean Square F Sig.
1 Regression 6299.146 7 899.878 17.275 .000a
Residual 14585.323 280 52.090
Total 20884.469 287
a. Predictors: (Constant), ROA, ACE, ACM, EA, CS, ACI, ACS
b. Dependent Variable: AL
Based on table 4.16 above, the result of F test shows that
value of F is 17.275 and probability value is 0,000 < 0,05 (sig. (F)
< 0.05). This result indicates that the variable of audit lag is
simultaneously influenced by audit committee independence, audit
committee expertise, audit size, audit committee meeting, company
size, external auditor, and profitability.
b. Partial Significance Test (t- Test)
Test of t statistic performed to determine the effect of one
independent variable towards the dependent variable. In this
research, t test done by seeing probability value.
67
Table 4.16
Result of t-Test
Coefficientsa
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
1 (Constant) 107.257 5.724 18.737 .000
ACI 2.687 1.726 .152 1.556 .121
ACE -.496 .587 -.046 -.845 .399
ACS -8.991 1.674 -.550 -5.371 .000
ACM -.231 .089 -.142 -2.596 .010
CS -.169 .195 -.046 -.864 .388
EA -.053 .943 -.003 -.057 .955
ROA -15.271 3.802 -.206 -4.016 .000
a. Dependent Variable: AL
Source: Output SPSS 20.0
Based on table 4.17 above, the result of t test can be
concluded based on probability value (value Significance < error
rate (α=0.05) = Ho is rejected), which will be explained as below:
1. Audit Committee Independence (ACI)
Based on table 4.17 above, the result of t tests toward variable
of audit committee independence (measured by the number of
independence members of the Audit Committee) shows that
probability value is 0.121 (p > 0.05). It means that audit
committee independence does not have influence tothe audit
lag. Thus, the first hypothesis (H1), which states that audit
committee independence has influence to audit lag, is not
accepted.
68
2. Audit Committee Expertise (ACE)
Based on table 4.17 above, the result of t tests toward variable
of audit committee expertise (measured by the number of
expert members of the Audit Committee) shows that
probability value is 0.399 (p > 0.05). It means that audit
committee expertise does not have influence to the audit lag.
Thus, the second hypothesis (H2), which states that audit
committee expertise has influence to audit lag, is not accepted.
3. Audit Committee Size (ACS)
Based on table 4.17 above, the result of t tests toward variable
of audit committee size (measured by the number of members
of the Audit Committee) shows that probability value is 0.000
(p < 0.05). It means that audit committee size has influence to
the audit lag. Thus, the third hypothesis (H3), which states that
audit committee size has influence to audit lag, is accepted.
4. Audit Committee Meeting (ACM)
Based on table 4.17 above, the result of t tests toward variable
of audit committee meeting (measured by the meeting of the
Audit Committee held in a year) shows that probability value
is 0.010 (p < 0.05). It means that audit committee meeting has
influence to the audit lag. Thus, the forth hypothesis (H4),
which states that audit committee meeting has influence to
audit lag, is accepted.
69
5. Company Size (CS)
Based on table 4.17 above, the result of t test toward variable
of company size (natural logarithm of total asset) shows that
probability value is 0.338 (p > 0.05). It means that company
size does not have influence to the audit lag. Thus, the fifth
hypothesis (H5), which states that company size has influence
to audit lag, is not accepted.
6. External Auditor (EA)
Based on table 4.17 above, the result of t test toward variable
of external auditor (represented by dummy variable by
classifying the Big Four public accounting firm and non-Big
Four public accounting firm) shows that probability value is
0.955 (p > 0.05). It means that external auditor does not have
influence to the audit lag. Thus, the sixth hypothesis (H6),
which states that external auditor has influence to audit lag, is
not accepted.
7. Profitability (ROA)
Based on table 4.17 above, the result of t test toward variable
of profitability (measured by ROA) shows that probability
value is 0.000 (p < 0.05). It means that profitability has
influence to the audit lag. Thus, the seventh hypothesis (H7),
which states that profitability has influence to audit lag, is
accepted.
70
4. Coefficient of Determination Test (R2)
Determination Coefficient Testing done to determine the
magnitude contribution of independent variables toward the
dependent variable with sees the value of R2.
Table 4.17
Result of Determination Coefficient Test
Model Summaryb
Model R R Square
Adjusted R
Square
Std. Error of
the Estimate
Durbin-
Watson
1 .549a .302 .284 7.21737 2.019
a. Predictors: (Constant), ROA, ACE, ACM, EA, CS, ACI, ACS
b. Dependent Variable: AL
Based on table 4.15 above, the result shows that the correlation coefficient
(R) for 0.549, which means that the correlation between the dependent
variable with the independent variables are strong based on the value of R
is above 0.5. Adjusted R Square value or coefficient of determination is
0.284 or 28.4%. It means that magnitude contribution of independent
variables toward the dependent variable is 28.4%, while 71.6% firm value
can be explained by other variable that is not included in this regression
analysis such as audit committee assessment, and independent
commissioner.
5. Interpretation
Based on multiple regression analysis as described in the previous
section, the interpretation of the results is presented in seven sections. The
first section discusses the influence of audit committee independence to
71
audit lag (H1). The second section discusses the influence of audit
committee expertise to audit lag (H2). The third section discusses the
influence of audit committee size to audit lag (H3). The fourth section
discusses the influence of audit committee meeting to audit lag (H4). The
fifth section discusses the influence of company size to audit lag (H5). The
sixth section discusses the influence of external auditor to audit lag (H6).
The seventh section discusses the influence of profitability to the audit lag
(H7). The explanation is as follow:
a. The influence of audit committee independence to audit lag.
The results using multiple regression analysis obtain results
that audit committee independence does not have influence to audit
lag. It can be seen from the calculated value by hypothesis testing
where the significant level of audit committee independence is
0.121 at significant level 5% which means value 0.121 > 0.05.
Thus, this research cannot accept hypothesis (H1), which states that
audit committee independence has influence to the audit lag.
Regression coefficient value is 2.687, which means that
there is positive relationship between audit committee
independence and audit lag. If the number of audit committee
independence is increased, audit lag will increase.
The result of this hypothesis is consistent with research that
been done by Nor, Shafie, and Hussin (2010) in Wijaya and
Rahardja (2012) who found empirical evidence that there are no
72
significant influence between audit committee independence and
audit lag. It is also explained by Wijaya and Rahardja (2012), there
are still very high prevalent variations audit committee in practice
as well as confusion an understanding of the functions, duties and
responsibilities of the audit committee. Confusion and the variation
is so high on the understanding shown by the audit committee often
in field duplication with other tasks. In addition many of the audit
committee engage in regular activities of an operational nature that
interfere with its independence IKAI (2008).
b. The influence of audit committee expertise to audit lag.
The results using multiple regression analysis obtain results
that audit committee expertise does not have influence to audit lag.
It can be seen from the calculated value by hypothesis testing
where the significant level of audit committee expertise is 0.399 at
significant level 5% which means value 0.399 > 0.05. Thus, this
research cannot accept hypothesis (H2), which states that audit
committee expertise has influence to the audit lag.
Regression coefficient value is -0.496, which means that
there is negative relationship between audit committee expertise
and audit lag. If the number of audit committee expertise is
increased, audit lag will decrease.
The result of this study support the research that been done
by Nor, Shafie, and Hussin (2010) in Wijaya and Rahardja (2012)
73
and Shukeri, S. N. and Nelson, S. P. (2011), the total of audit
committee expertise are not significantly can reduce the audit lag.
Companies who select members of audit committee expertise as
only a prerequisite in order to fulfill the Bapepam regulation
resulting in less attention to the purpose and function of the
regulation itself. The research does not support Wijaya and
Rahardja (2012) that found empirical evidence that audit committee
expertise has significantly negative influence to audit lag.
c. The influence of audit committee size to audit lag.
The results using multiple regression analysis obtain results
that audit committee size have influence to audit lag. It can be seen
from the calculated value by hypothesis testing where the
significant level of audit committee size is 0.000 at significant level
5% which means value 0.000 < 0.05. Thus, this research accept
hypothesis (H3), which states that audit committee size has
influence to the audit lag.
Regression coefficient value is -8.991, which means that
there is negative relationship between audit committee size and
audit lag. If the number of audit committee size is increased, audit
lag will decrease.
The result of this hypothesis is consistent with research that
been done by Wijaya and Rahardja (2012) which stated that audit
committee size increase companies performance and reduce the
74
audit lag. With the increasing of audit committee size, tend to have
greater strength or power is increase, receives more resources, as
well as more likely to have good quality financial reporting is in
contrast with the evidence from previous studies such as Abbott et
al. (2004) and Bédard et al. (2004) in Naimi et al. (2010)
d. The influence of audit committee meeting to audit lag.
The results using multiple regression analysis obtain results
that audit committee meeting have influence to audit lag. It can be
seen from the calculated value by hypothesis testing where the
significant level of audit committee meeting is 0.010 at significant
level 5% which means value 0.010 < 0.05. Thus, this research
accept hypothesis (H4), which states that audit committee meeting
has influence to the audit lag.
Regression coefficient value is -0.231, which means that
there is negative relationship between audit committee meeting and
audit lag. If the number of audit committee meeting is increased,
audit lag will decrease. The result of this hypothesis is consistent
with research that been done by Naimi et al. (2010) which stated
the more frequent audit committee meetings are held, the more
likely the audit committee can reach solutions on financial issues
and leading the auditors to issue timely report.
75
e. The influence of company size to audit lag.
The results using multiple regression analysis obtain results
that company size does not have influence to audit lag. It can be
seen from the calculated value by hypothesis testing where the
significant level of company size is 0.388 at significant level 5%
which means value 0.388 > 0.05. Thus, this research cannot accept
hypothesis (H5), which states that company size has influence to
the audit lag.
Regression coefficient value is -0.169, which means that
there is negative relationship between company size and audit lag.
If the number of company size is increased, audit lag will decrease.
The result consists with the research done by Vuko and Cular
(2014) and Puasa et al. (2014) that stated there are no significantly
impacts of company size to audit lag. Larger companies face
greater external pressure to release the financial statement promptly
and also exert more pressure and demand more timely completion
of their audits.
f. The influence of external auditor to audit lag.
The results using multiple regression analysis obtain results
that external auditor does not have influence to audit lag. It can be
seen from the calculated value by hypothesis testing where the
significant level of external auditor is 0.955 at significant level 5%
76
which means value 0.955 > 0.05. Thus, this research cannot accept
hypothesis (H6), which states that external auditor has influence to
the audit lag.
Regression coefficient value is -0.053, which means that
there is negative relationship between external auditor and audit
lag. If the number of external auditor is increased, audit lag will
decrease.
The results of this study support the results the research that
have been done by Wijaya and Rahardja (2012), Puasa et al.
(2014), and Vuko and Cular (2014), which states that the external
auditor reputation has no effect on the timeliness of financial
reports. It explained as the performance of the external auditor
cannot be separated from the performance of the managers as
agents of the company in generating financial statements. Sooner or
later of a company submit their financial report depends on the
performance of the managers, so that even audited by the public
accounting firm that partnered with the Big Four but if the manager
late in submitting their financial report to the Office of Public
Accountants will not guarantee the timeliness of financial reporting
to Bapepam.
77
g. The influence of profitability to the audit lag.
The results using multiple regression analysis obtain results
that profitability have influence to audit lag. It can be seen from the
calculated value by hypothesis testing where the significant level of
profitability is 0.000 at significant level 5% which means value
0.000 < 0.05. Thus, this research accept hypothesis (H7), which
states that profitability has influence to the audit lag.
Regression coefficient value is -15.271, which means that
there is negative relationship between profitability and audit lag. If
the number of profitability is increased, audit lag will decrease. The
result consists with the research done by Vuko and Cular (2014)
that stated there are no significantly impacts of company size
toward audit lag and do not support research done by Wijaya and
Rahardja (2012).
High profitability is a good signal, means it is a good news,
and companies tend to present their financial report on time to the
third parties. High profitability makes the value of the company is
very good in the eyes of the public, whereas for the shareholders,
they are wishing that the financial report can submit on time, then
the sooner RUPS will be held and dividend can be distributed
immediately.
78
CHAPTER V
CONCLUSION AND RECOMMENDATION
A. Conclusion
This research examines the influence of audit committee
independence, audit committee expertise, audit committee size, audit
committee meeting, company size, external auditor, and profitability
towards lag. Analyses are performed using the multiple regression analysis
method with the program ‘Statistical Package for Social Science’ (SPSS)
Ver.20.0. Data samples consist of 288 representative companies listed in
the Indonesia Stock Exchange during the period 2013.
From the test results and discussions in the previous chapter can be
concluded as follows:
1. Based on the multiple regression result, audit committee independence,
and audit committee expertise do not have influence. This implies that
companies do not necessarily need concern about background of audit
committees. It caused by companies who select members of the audit
committee independent and expertise as a prerequisite in order to fulfill
the Bapepam regulation resulting in less attention to the purpose and
function of the regulation itself.
2. Based on the multiple regression result, audit committee size and audit
committee meeting have negative influence. It implies that company
should increase the size and performance of the audit committee, the
most active of audit committee the more likely audit committee can
79
reach solutions of the financial issues and leading the auditor to issue in
timely manner.
3. Based on the multiple regression result, company size and external
auditor do not have influence to the audit lag. It caused by the fact there
are companies with big cash and even audited by the Big 4 cannot
release their financial report to the public in the proper time, which
caused problems that their face in their companies. So there are no
guaranties of company size and external auditor will impact the audit
lag. In the other hand, profitability has negative influence to the audit
lag. Companies that have good profit intend to release their financial
report in timely manner to give trust to their investor.
B. Recommendation
Research on audit committee characteristic toward the audit lag in the
future are expected to provide higher quality results, taking into
consideration the following suggestions:
1. Future Research may consider extend the period of study so they
can see the tendency that happened in the long term that will
describe the conditions that actually happened.
2. Proxy used for the independent variable could be add such external
ownership, complexity operation, solvency, company profiles, age
of company and financial distress, audit committee performance
and independent commissioner performance. Thus, the results
80
gained can be better and more broadly than this research.
3. Future research must disclose the list of audit committee
characteristic completely in line to the requirement to be listed
company in IDX.
81
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86
Appendix I:
Data of Research
Table 1
Variable Data Proceed
Company Independent Expertise Size Meeting Company
Size
External
Auditor Profitability
Submission
Date
AALI 3 3 3 4 30.34 1 0.12 84
ABBA 3 1 3 6 26.81 0 0.03 84
ABDA 3 3 3 4 28.4 0 0.07 73
ACES 3 2 3 4 28.54 0 0.2 86
ACST 3 1 3 1 27.89 1 0.09 77
ADES 3 2 3 3 26.81 0 0.13 73
ADMF 3 2 3 4 33.37 1 0.05 88
AHAP 3 2 3 4 26.41 0 0.07 84
AIMS 3 2 3 1 23.93 0 0.08 76
AKKU 2 1 2 3 24.53 0 -0.03 86
AKPI 3 3 3 4 28.37 1 0.02 86
AKRA 3 1 3 16 32.62 1 0.04 80
AKSI 3 3 3 10 24.88 0 -0.03 69
ALDO 3 3 3 6 26.45 0 0.05 77
ALKA 3 3 3 4 26.21 0 -0.01 87
ALMI 3 2 3 4 28.64 0 0.09 80
AMAG 3 2 3 4 32.63 1 0.1 80
AMFG 4 1 4 11 28.89 1 0.01 86
APII 3 1 3 4 32.85 0 0.12 85
APLI 3 3 3 4 26.44 1 0.01 78
APLN 3 3 3 14 30.61 1 0.05 84
APOL 3 2 3 3 28.57 0 -0.26 101
ARGO 3 2 3 4 28.48 0 0 101
ARII 3 1 3 10 33.52 0 0.04 76
ASBI 3 3 3 4 26.71 0 0.05 83
ASDM 4 2 3 6 27.73 1 0.03 84
ASII 4 4 4 5 33 1 0.1 57
ASJT 3 2 3 4 26.03 0 0.03 65
ASRI 3 2 3 8 30.3 0 0.06 80
ASRM 3 2 3 4 27.79 0 0.03 86
ASSA 3 3 3 5 28.41 1 0.04 73
ATPK 3 1 3 4 34.94 0 0.01 85
87
BABP 3 3 3 12 29.73 1 -0.09 79
BACA 3 3 3 8 29.6 0 0.02 86
BAEK 3 2 3 7 30.99 1 0.01 84
BAJA 3 1 3 4 27.46 0 -0.09 84
BAPA 3 2 3 2 25.91 0 0.03 83
BATA 3 2 3 5 27.25 1 0.07 83
BCAP 3 1 3 4 28.87 0 0 79
BCIP 3 2 3 5 26.79 0 0.1 87
BEKS 3 2 3 4 29.83 0 0.01 86
BEST 3 2 3 5 28.84 0 0.22 85
BFIN 3 4 5 4 29.75 0 0.07 54
BHIT 3 1 3 4 31.09 1 0.01 87
BIMA 3 2 3 8 23.2 0 -0.13 86
BIPP 3 2 3 4 27.05 0 0.19 62
BISI 3 2 3 6 28.17 1 0.07 85
BJBR 6 3 6 18 31.89 1 0.03 67
BJTM 3 2 3 8 31.13 1 0.04 66
BKSL 3 2 3 4 30 0 0.06 72
BMAS 4 1 4 2 29.06 1 0.01 84
BMRI 2 2 6 43 34.23 1 0.04 41
BMSR 3 2 3 5 27.29 0 -0.04 83
BMTR 3 1 3 4 30.68 1 0.04 87
BNBR 4 2 5 7 23.2 0 -1 94
BNGA 6 4 6 3 33.02 1 0.03 45
BNLI 5 5 5 12 32.74 1 0.02 51
BRNA 3 3 3 4 27.75 0 0.01 86
BSIM 5 5 5 4 30.49 0 0.02 84
BSWD 3 2 3 4 28.91 0 0.04 72
BTEK 3 3 3 12 26.64 0 0.01 94
BTEL 3 2 3 12 29.84 0 -0.02 83
BTON 3 3 3 5 25.89 0 0.14 83
BTPN 5 3 5 12 31.87 1 0.05 49
BUDI 3 3 3 4 28.5 0 0.02 80
BUVA 3 3 3 4 28.02 1 0.04 73
BVIC 3 3 3 8 30.58 0 0.02 84
BWPT 3 3 3 6 26.49 0 0.03 80
CASS 3 2 3 6 27.54 1 0.12 87
CEKA 3 2 3 4 27.7 1 0.06 66
CENT 3 2 3 4 27.45 1 -0.04 73
CFIN 4 4 4 12 29.44 1 0.03 80
CKRA 4 4 4 4 27.81 0 0 85
88
CMNP 4 2 4 5 29.2 0 0.09 59
CMPP 3 3 3 3 24.82 0 0 83
CNKO 3 2 3 4 29.34 0 0.02 84
COWL 3 2 3 4 28.3 0 0.03 83
CPGT 3 1 3 4 27.95 0 0.06 85
CPRO 3 2 3 12 29.6 1 0.17 86
CSAP 3 2 3 4 28.76 1 0.03 80
CTRA 3 2 3 5 30.63 1 0.05 83
CTRP 3 1 3 5 29.67 1 0.06 83
CTRS 3 1 3 5 29.38 1 0.07 83
CTTH 3 1 3 12 26.51 0 0.09 76
DART 3 2 3 11 29.19 1 0.04 84
DEFI 3 2 3 3 24.57 0 0.04 89
DGIK 3 2 3 5 28.37 0 0.05 73
DILD 4 4 4 6 29.65 1 0.05 83
DLTA 3 2 3 3 27.49 1 0.3 86
DNET 3 2 3 4 29.6 1 0.03 84
DPNS 3 3 3 4 26.27 0 0.26 84
DSFI 3 3 3 7 26.26 0 0.05 85
DSNG 3 2 3 4 29.41 0 0.04 71
DVLA 4 3 4 2 20.9 1 0.1 59
DYAN 3 2 3 4 28.22 0 0.03 78
ECII 3 2 3 5 28.34 0 0.1 80
EKAD 3 3 3 5 26.56 0 0.11 76
ELSA 4 3 4 19 29.11 1 0.05 86
EMDE 3 2 3 4 27.52 0 0.01 84
EMTK 3 2 3 5 30.18 1 0.08 84
EPMT 4 2 4 4 29.34 1 0.08 64
ERAA 3 2 3 4 29.24 1 0.11 85
ETWA 3 2 3 4 27.89 0 0.01 84
FAST 3 2 3 4 28.34 1 0.08 84
FASW 3 3 3 14 29.37 1 -0.04 62
FMII 3 3 3 5 26.79 0 0.08 79
FORU 3 2 3 4 26.3 0 0.04 80
FREN 3 3 3 3 30.4 0 -0.02 84
GAMA 3 2 3 4 27.89 0 0.02 86
GDST 3 3 3 5 27.81 0 0.08 79
GEMA 3 2 3 4 26.66 0 0.05 66
GGRM 3 2 3 4 31.56 1 0.09 76
GJTL 3 3 3 12 30.36 1 0.08 83
GLOB 3 3 3 4 28.03 1 0.08 85
89
GMCW 3 2 3 6 30.66 0 -0.05 92
GMSF 4 4 4 5 26.65 1 0.02 85
GMTD 3 3 3 4 27.9 0 0.07 76
GOLD 3 2 3 4 25.29 0 0.07 83
GPRA 2 0 2 4 27.92 0 0.08 80
GREN 3 1 3 5 27.15 0 0.09 78
GWSA 4 2 4 4 28.35 1 0.04 76
GZCO 3 2 3 16 28.79 0 -0.03 85
HADE 3 2 3 4 26.59 0 0.02 73
HDFA 3 2 3 12 28.26 0 0.1 76
HDTX 3 3 3 19 28.5 0 -0.09 78
HMSP 3 2 3 9 30.94 1 0.4 86
HOME 3 1 3 4 26.29 0 0.01 78
IBST 3 2 3 8 28.69 0 0.01 97
ICBP 3 2 3 4 30.69 1 0.11 76
IIKP 3 2 3 4 26.63 0 -0.05 84
IKAI 3 1 3 4 26.9 1 -0.09 86
IMAS 3 3 3 5 28.43 1 0.02 73
INAI 3 2 3 4 27.36 0 0.01 80
INCI 3 2 3 4 25.64 0 0.08 83
INDF 3 2 3 4 31.99 1 0.05 76
INDS 3 2 3 5 30.72 0 0.07 85
INPP 3 2 3 4 28.3 0 0.01 91
INTA 3 2 3 6 22.28 1 -0.05 85
INTD 3 2 3 4 24.7 0 0.08 76
JAWA 3 2 3 5 28.61 0 0.03 86
JECC 3 2 3 18 27.85 0 0.02 80
JIHD 3 1 3 13 29.5 0 0.27 78
JKON 3 3 3 4 28.86 0 0.1 69
JKSW 3 1 3 6 26.29 0 -0.03 86
JPFA 3 2 3 4 30.33 0 0.04 80
JPRS 3 2 3 12 26.65 0 0.04 80
JRPT 3 1 3 12 30.98 0 0.05 73
JSPT 3 2 3 4 28.86 1 0.05 76
JTPE 3 3 3 4 27.08 0 0.07 84
KBLI 3 2 3 4 27.92 1 0.06 79
KBLM 3 1 3 2 27.21 1 0.12 84
KBLV 3 1 3 4 29.29 0 0.04 69
KBRI 3 2 3 5 27.39 0 -0.02 86
KICI 3 3 3 4 25.31 1 0.08 62
KIJA 3 3 3 7 29.74 0 0.01 86
90
KLBF 3 1 3 4 30.06 1 0.16 70
KPIG 3 2 3 4 29.63 1 0.04 85
KREN 3 2 3 10 26.91 0 0.03 83
LION 3 3 3 3 26.94 0 0.13 85
LMPI 3 3 3 6 27.44 0 -0.02 73
LMSH 3 3 3 3 25.68 0 0.11 85
LPCK 3 1 3 5 28.98 0 0.15 78
LPGI 3 3 3 5 27.59 0 0.06 84
LPIN 3 3 3 5 26 0 0.04 87
LPKR 3 2 3 5 28.77 0 0.04 79
LPLI 3 2 3 4 28.26 0 0.15 85
LPPS 3 2 3 4 27.57 0 0.18 85
MAIN 4 2 4 4 28.43 1 0.11 83
MAYA 3 1 3 4 30.81 0 0.03 86
MBTO 2 2 2 30 27.14 0 0.03 76
MCOR 4 2 4 12 29.7 1 0.02 78
MDLN 3 3 3 4 29.9 0 0.25 79
MDRN 3 3 3 4 28.27 1 0.27 80
MERK 3 2 3 2 27.27 1 0.25 73
META 3 1 3 4 28.58 0 0.03 71
MFIN 3 2 3 4 29.01 0 0.07 71
MICE 3 3 3 4 27.17 0 0.11 80
MLBI 3 2 3 6 28.21 1 0.67 76
MLIA 3 3 3 12 29.35 1 0.07 80
MNCN 3 3 3 4 29.89 1 0.18 85
MPMX 3 3 3 5 30.05 1 0.05 80
MRAT 3 2 3 3 26.81 0 -0.02 83
MREI 3 3 3 5 27.62 0 0.11 73
MSKY 3 1 3 4 29.41 1 -0.08 87
MTDL 3 3 3 5 33.07 1 0.05 80
MTLA 3 2 3 3 28.67 1 0.09 84
MYOH 3 2 3 4 28.23 0 0.1 73
MYOR 3 2 3 4 29.9 0 0.1 85
MYRX 3 2 3 8 29.31 0 0 86
MYTX 3 1 3 4 21.46 0 -0.01 84
NELY 3 2 3 11 26.44 0 0.19 84
NIPS 3 3 3 4 27.41 0 0.04 86
NIRO 3 2 3 7 28.71 0 0 86
NRCA 3 2 3 2 28.12 0 0.12 84
OMRE 3 2 3 4 27.44 1 0.03 79
PALM 3 3 3 4 29.02 0 -0.1 66
91
PANS 3 2 3 7 27.95 0 0.13 73
PGLI 3 1 3 4 19.11 0 0.41 73
PICO 3 2 3 4 20.25 0 0.03 84
PJAA 3 2 3 32 28.6 0 0.07 79
PKPK 3 2 3 4 26.61 0 0 87
PLAS 3 2 3 3 26.58 0 0.02 83
PNBN 4 4 4 6 32.73 1 0.02 73
PNIN 3 2 3 6 29.03 1 0.01 76
PNLF 3 3 3 4 30.42 0 0.07 85
PNSE 3 2 3 6 26.82 0 0.1 73
POOL 3 2 3 12 25.7 1 0.03 87
PRAS 3 2 3 4 27.4 0 0.1 80
PSDN 3 2 3 3 27.25 1 0.08 73
PSKT 3 3 3 4 26.43 0 0.03 84
PUPD 3 2 3 4 26.63 0 0.07 77
PWON 3 2 3 6 29.86 1 0.12 77
PYFA 3 2 3 4 25.89 0 0.04 69
RALS 3 2 3 3 29.11 1 0.09 80
RANC 3 1 3 2 27.29 0 0.05 76
RBMS 3 0 3 12 25.79 0 -0.08 84
RELI 3 1 3 4 27.45 0 0.07 80
RICY 3 3 3 4 27.74 0 0.01 84
RMBA 3 3 3 4 29.85 1 -0.18 86
RODA 3 2 3 4 28.64 0 0.14 76
RUIS 3 2 3 9 27.88 0 0.02 80
SAFE 3 3 3 3 23.39 0 -0.32 85
SAME 3 3 3 4 31.26 0 0.12 83
SCCO 3 2 3 4 25.89 1 0.06 80
SCMA 3 3 3 12 29.02 0 0.32 79
SCPI 3 2 3 4 31.93 1 -0.02 91
SDMU 3 3 3 12 26.64 0 0.02 87
SGRO 3 2 3 4 29.14 1 0.03 83
SHID 2 1 2 13 28 0 0 76
SILO 3 2 3 1 28.59 0 0.02 66
SIPD 3 2 3 4 28.78 0 0.04 87
SKBM 3 1 3 12 29.24 0 0.11 86
SKLT 3 3 3 4 25.56 0 0.08 78
SKYB 4 2 3 5 27.48 0 0 80
SMDM 2 1 2 2 28.71 0 0.01 83
SMMA 3 3 3 4 31.5 0 0.02 86
SMMT 3 3 3 4 27.16 1 0.03 86
92
SMRA 3 2 3 4 30.25 1 0.08 74
SMSM 3 1 3 4 21.25 1 0.2 84
SONA 3 2 3 4 27.57 0 0.06 80
SPMA 3 1 3 5 28.2 0 -0.01 86
SQBB 3 2 3 4 26.77 1 0.35 78
SRAJ 3 2 3 4 28.32 0 -0.27 73
SRIL 3 2 3 3 29.35 1 0.05 84
SRSN 3 2 3 4 26.77 0 0.04 69
SRTG 3 2 3 5 30.42 1 0.02 86
SSIA 3 2 3 8 29.39 0 0.12 84
SSTM 3 1 3 4 27.41 0 -0.02 84
STAR 3 2 3 5 27.34 0 0.08 80
STTP 3 2 3 5 28.02 0 0.07 86
SULI 3 2 3 12 27.57 1 -0.35 83
SUPR 5 2 5 1 29.47 0 0.06 83
TAXI 3 2 3 4 28.39 1 0.06 64
TBIG 3 2 3 4 30.56 0 0.06 76
TBLA 3 2 3 4 29.46 0 0.01 78
TCID 4 1 4 14 28.01 1 0.11 64
TELE 3 2 3 4 28.87 0 0.09 80
TGKA 3 3 3 3 28.51 1 0.05 80
TINS 4 3 4 44 29.7 1 0.07 45
TIRT 3 2 3 4 27.31 0 0.06 79
TLKM 5 2 5 30 32.48 1 0.11 59
TMAS 3 2 3 12 28.14 1 0.04 85
TMPI 2 1 2 4 30.11 0 0 87
TMPO 3 2 3 4 30.84 0 0.03 67
TOTO 3 2 3 12 28.19 1 0.14 79
TRIL 3 3 3 4 25.49 0 0 87
TRIM 3 1 3 4 27.23 1 0.01 83
TRIO 3 2 3 6 29.74 1 0.06 87
TRIS 3 2 3 4 40.65 0 0.1 62
TRST 3 3 3 6 28.81 0 0.01 77
TRUS 3 2 3 4 26.54 0 0.04 83
TSPC 3 2 3 4 29.32 1 0.12 76
TURI 4 4 4 4 31.18 1 0.09 58
ULTJ 3 2 3 2 28.66 0 0.12 83
UNIT 3 2 3 5 26.85 0 0 79
UNSP 3 1 3 4 30.52 0 -0.15 85
UNVR 3 3 3 4 30.22 1 0.54 84
VICO 3 3 3 0 27.63 0 0.1 86
93
VIVA 3 1 3 2 29.3 0 0.02 87
VOKS 3 3 3 6 28.3 0 0.02 79
VRNA 3 3 3 3 28.37 1 0.02 80
WAPO 3 3 3 4 25.46 0 0.13 79
WEHA 3 1 3 2 26.97 0 0 84
WICO 3 1 3 4 25.85 1 -0.01 79
WIIM 3 3 3 1 27.84 0 0.11 73
WIKA 5 4 5 16 30.16 0 0.05 55
YPAS 3 2 3 4 27.14 0 0.01 87
YULE 3 2 3 4 24.72 0 0.03 76
94
Appendix II:
Statistical Data
Table I
Descriptive Statistics
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
independent 288 2.00 6.00 3.1111 .48116
expertise 288 .00 5.00 2.1771 .79188
size 288 2.00 6.00 3.1285 .52215
meeting 288 .00 44.00 6.0486 5.25162
csize 288 19.11 40.65 28.3165 2.32984
EA 288 .00 1.00 .3681 .48312
profitability 288 -1.00 .67 .0512 .11513
submission_date 288 41.00 101.00 79.4271 8.53043
Valid N (listwise) 288
Table II
Regression
Descriptive Statistics
Mean Std. Deviation N
submission_date 79.4271 8.53043 288
independent 3.1111 .48116 288
expertise 2.1771 .79188 288
size 3.1285 .52215 288
meeting 6.0486 5.25162 288
csize 28.3165 2.32984 288
EA .3681 .48312 288
profitability .0512 .11513 288
95
96
One-Sample Kolmogorov-Smirnov Test
Unstandardized
Residual
N 288
Normal Parametersa,,b Mean .0000000
Std. Deviation 7.12881064
Most Extreme Differences Absolute .078
Positive .063
Negative -.078
Kolmogorov-Smirnov Z 1.327
Asymp. Sig. (2-tailed) .059
a. Test distribution is Normal.
b. Calculated from data.
97
Correlations
submission
_date
indepen
dent
exper
tise
siz
e
meet
ing
csi
ze EA
profitab
ility
Pearson
Correla
tion
submission
_date
1.000 -.348 -.212 -
.47
3
-.299 -
.20
2
-
.15
8
-.154
independe
nt
-.348 1.000 .378 .84
4
.140 .19
3
.24
3
-.060
expertise -.212 .378 1.000 .37
5
.057 .08
6
.08
4
.025
size -.473 .844 .375 1.0
00
.314 .24
3
.24
0
-.112
meeting -.299 .140 .057 .31
4
1.00
0
.19
7
.12
9
-.034
csize -.202 .193 .086 .24
3
.197 1.0
00
.26
2
.090
EA -.158 .243 .084 .24
0
.129 .26
2
1.0
00
.125
profitabilit
y
-.154 -.060 .025 -
.11
2
-.034 .09
0
.12
5
1.000
Sig.
(1-
tailed)
submission
_date
. .000 .000 .00
0
.000 .00
0
.00
4
.004
independe
nt
.000 . .000 .00
0
.009 .00
1
.00
0
.155
expertise .000 .000 . .00
0
.166 .07
3
.07
7
.337
size .000 .000 .000 . .000 .00
0
.00
0
.028
meeting .000 .009 .166 .00
0
. .00
0
.01
4
.280
csize .000 .001 .073 .00
0
.000 . .00
0
.063
EA .004 .000 .077 .00
0
.014 .00
0
. .017
profitabilit
y
.004 .155 .337 .02
8
.280 .06
3
.01
7
.
N submission 288 288 288 28 288 28 28 288
98
_date 8 8 8
independe
nt
288 288 288 28
8
288 28
8
28
8
288
expertise 288 288 288 28
8
288 28
8
28
8
288
size 288 288 288 28
8
288 28
8
28
8
288
meeting 288 288 288 28
8
288 28
8
28
8
288
csize 288 288 288 28
8
288 28
8
28
8
288
EA 288 288 288 28
8
288 28
8
28
8
288
profitabilit
y
288 288 288 28
8
288 28
8
28
8
288
Variables Entered/Removed
Model
Variables
Entered
Variables
Removed Method
1 profitability,
expertise,
meeting, EA,
csize,
independent,
size
. Enter
a.All requested variables entered.
Model Summaryb
Model R R Square
Adjusted R
Square
Std. Error of
the Estimate Durbin-Watson
1 .549a .302 .284 7.21737 2.019
a. Predictors: (Constant), profitability, expertise, meeting, EA, csize, independent,
size
b. Dependent Variable: submission_date
99
ANOVAb
Model
Sum of
Squares df Mean Square F Sig.
1 Regression 6299.146 7 899.878 17.275 .000a
Residual 14585.323 280 52.090
Total 20884.469 287
a. Predictors: (Constant), profitability, expertise, meeting, EA, csize, independent, size
b. Dependent Variable: submission_date
Coefficientsa
Model
Unstandardized
Coefficients
Standardized
Coefficients
t Sig.
Collinearity
Statistics
B
Std.
Error Beta Tolerance VIF
1 (Constant) 107.257 5.724 18.737 .000
independent 2.687 1.726 .152 1.556 .121 .263 3.801
expertise -.496 .587 -.046 -.845 .399 .841 1.189
size -8.991 1.674 -.550 -5.371 .000 .238 4.210
meeting -.231 .089 -.142 -2.596 .010 .829 1.207
csize -.169 .195 -.046 -.864 .388 .876 1.142
EA -.053 .943 -.003 -.057 .955 .874 1.145
profitability -15.271 3.802 -.206 -4.016 .000 .947 1.056
a. Dependent Variable: submission_date
100
Coefficient Correlationsa
Model
profitabil
ity
experti
se
meeti
ng EA
csiz
e
independ
ent size
1 Correlati
ons
profitabili
ty
1.000 -.069 .003 -
.131
-
.094
-.047 .136
expertise -.069 1.000 .038 .023 .001 -.108 -
.126
meeting .003 .038 1.000 -
.053
-
.115
.243 -
.349
EA -.131 .023 -.053 1.00
0
-
.196
-.089 -
.032
csize -.094 .001 -.115 -
.196
1.00
0
.017 -
.101
independ
ent
-.047 -.108 .243 -
.089
.017 1.000 -
.815
size .136 -.126 -.349 -
.032
-
.101
-.815 1.00
0
Covarian
ces
profitabili
ty
14.458 -.153 .001 -
.471
-
.070
-.310 .864
expertise -.153 .344 .002 .013 .000 -.110 -
.123
meeting .001 .002 .008 -
.004
-
.002
.037 -
.052
EA -.471 .013 -.004 .890 -
.036
-.145 -
.050
csize -.070 .000 -.002 -
.036
.038 .006 -
.033
independ
ent
-.310 -.110 .037 -
.145
.006 2.980 -
2.35
6
size .864 -.123 -.052 -
.050
-
.033
-2.356 2.80
2
a. Dependent Variable: submission_date
101
Collinearity Diagnosticsa
Mo
del
Dimen
sion
Eigenv
alue
Condi
tion
Index
Variance Proportions
(Const
ant)
indepe
ndent
exper
tise
si
ze
meet
ing
csi
ze
E
A
profita
bility
1 1 6.150 1.000 .00 .00 .00 .0
0
.01 .0
0
.
0
1
.00
2 .826 2.729 .00 .00 .00 .0
0
.01 .0
0
.
0
1
.88
3 .552 3.338 .00 .00 .00 .0
0
.00 .0
0
.
8
9
.05
4 .363 4.116 .00 .00 .01 .0
0
.84 .0
0
.
0
1
.02
5 .083 8.595 .01 .00 .91 .0
0
.01 .0
1
.
0
0
.00
6 .020 17.62
7
.05 .08 .07 .1
0
.01 .0
7
.
0
2
.03
7 .004 41.18
0
.15 .65 .00 .7
0
.12 .1
9
.
0
1
.00
8 .003 45.90
2
.79 .26 .00 .2
0
.00 .7
3
.
0
5
.01
a. Dependent Variable: submission_date
Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 41.3006 89.7752 79.4271 4.68490 288
Residual -19.23673 19.38582 .00000 7.12881 288
Std. Predicted Value -8.138 2.209 .000 1.000 288
Std. Residual -2.665 2.686 .000 .988 288
a.Dependent Variable: submission_date