Analysis Characteristic for Internal Control Disclosure: Case Study Company Listed in Indonesian Stock Exchange

Weli and Julianti Sjarief

The internal control system is important in the governance of enterprise. An effective internal control system involves the entire personnel of the company, including accounting procedures. The aim of this study is to analyze the relationship between company characteristics, quality of corporate governance and the extent of company disclosure of internal controls over their financial reporting. Given information about the company's internal controls need to be known by all stakeholders. Therefore transparency in the presentation of information is very important. The results of a survey of 140 companies listed on the stock exchanges show that Indonesian companies disclosure was limited to the minimum that needs to be disclosed so that the company's internal control conditions are not presented in detail in the financial statements. This indicates that the awareness of companies to disclose their internal control conditions is still low. Besides, this study tested several characteristics of the company and corporate governance mechanisms which are supposed to influence the internal control disclosure in their financial statements. The result gave strong support to the size of the company, the cost of the audit, the audit committee size and proportion of management ownership.

DOI : https://doi.org/10.21102/graf.2017.09.82.01