Determinants of Financial Statement Integrity

Abstract

Firms and financial statements are closely related. This study examines whether intellectual capital, managerial ownership, institutional ownership, and firm size affect the integrity of financial statements. This study uses the consumer goods sector firms that have been listed on the Indonesia Stock Exchange (IDX) in 2017-2021. Purposive sampling is used as a method of selecting research samples and analyzed by multiple regression methods. The results show that the integrity of financial statements is influenced by intellectual capital, managerial ownership, and firm size. Institutional ownership does not impact the integrity of financial statements for consumer goods firms listed on the IDX from 2017 to 2021. Intellectual capital serves as a potential tool for optimizing management of intellectual capital in various sectors, including consumer goods firms. Based on the findings, it is recommended that companies prioritize the effective management of intellectual capital, consider enhancing managerial ownership structures, and recognize the impact of firm size on maintaining the integrity of financial statements.