The Effect of Integrating Reporting on Earnings Quality: A Study of Family Firms in Indonesia

Abstract

Objective – The implementation of integrated reporting (IR), which is a composite of financial and non-financial information, in one single report makes financial reporting more comprehensive and more transparent. Transparent information in IR gives annual reporting of family firms a higher earnings quality.

Methodology/Technique – This research aims to examine the effect of IR on earnings quality of family firms in the mining industry on the Indonesian Stock Exchange between 2014 and 2017.

Findings – The results of this study indicate that there is a positive and significant relationship between integrating reporting and earnings quality. These results confirm that firms that use integrated reporting tend to show higher earnings quality. The study also finds that larger sized companies and larger leverage amounts equals a higher volume of information disclosed.

Novelty – The motivation of this research is to examine IR issues that are relatively new.

Type of Paper: Empirical.

Keywords: Earnings Quality, Family Firms, Financial Reporting, Indonesia, Integrated Reporting

JEL Classification: M40, M41, M49