INVESTMENT OPPORTUNITY SET TO EARNING QUALITY AND FIRM’S VALUE: CORPORATE GOVERNANCE MECHANISM AS MODERATING VARIABLE

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Abstract

This study aims to see the effect of Investment Opportunity Set (IOS) to earnings quality and firm value with corporate governance mechanisms (frequency of audit committee meeting, the composition of Independent board of commissioners, institutional ownership, and managerial ownership) as the moderating variable. In this study population was manufacturing companies listing from year 2009 until 2012. The samples were selected by using of purposive sampling method. After the selecting population based on the certain criteria, there are 15 companies sampled. The data analysis technique used in this study is multiple regression analysis.
The result frequency of audit committee meeting, the composition of Independent board of commissioners, institutional ownership, and managerial ownership) does not influence the earnings quality but significantly influence the firm value. Based on the testing of partial, IOS does not effect on the earnings quality but significantly effect on the firm value and IOS which moderated by corporate governance mechanisms (frequency of audit committee meeting, the composition of Independent board of commissioners, institutional ownership, and managerial ownership) does not effect on the earnings quality and the firm value.

Keywords: Investment Opportunity Set, Corporate Governance Mechanism, Audit Committee, the Composition of the Board of Commissioners, Institutional Ownership, Managerial Ownership, Earnings Quality and Firms Value

Received: 03.01.2017

Accepted: 26.05.2017

How to cite this paper: Soebyakto, B. B., Dewi, K., Mukhtaruddin, & Arsela, S. (2017). Investment opportunity set to earning quality and firm’s value: Corporate governance mechanism as moderating variable. Corporate Ownership & Control, 14(4-2),435-448. https://doi.org/10.22495/cocv14i4c2art9