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

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.

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