Good corporate governance and Bondholder-Shareholder conflict: The case of implementation accounting conservatism for mining companies

Abstract

The application of the Accounting Conservatism Principle in various companies can have a different impact. The application of this principle is considered able to result in Financial Statements not being used as a tool to evaluate the company's risk. However, other parties have stated otherwise, that the application of the Accounting Conservatism Principle could generate reasonable financial reports and provide relevant Financial Information. The Objective of this study is to analyse the effect of Good Corporate Governance and Bondholder-Shareholder Conflict against company accounting conservatism. Analysis of accounting conservatism done using quantitative methods and data testing is done with the classical assumption and hypothesis testing with the multiple linear regression model. The level of accounting conservatism is measured by the value of accruals and the market value. The sample was mining companies listed on the Indonesia Stock Exchange in 2014-2017. The results of the research show that each company is engaged in accounting conservatism at different levels. In accrual, accounting managerial ownership affects conservatism; it is different from the approach in which the market value of managerial ownership did not affect the significance of the accounting conservatism. Institutional ownership does not affect accounting conservatism when measured accrual, but has the effect of market value when measured. The presence of independent directors when measured accrual as well as market value, is able to influence the level of accounting conservatism.