Managerial and Institutional Ownership, Company Growth and

Quality of Financial Reporting

Padri Achyarsyah*
Universitas Nasional
padri.achyarsyah@civitas.unas.ac.id

Nurul Sheila
Universitas Nasional
nurulsheila18@gmail.com

Presented at: SIBR 2019 (Osaka) Conference on Interdisciplinary

Business and Economics Research, 4th - 5th July 2019, Osaka, Japan.

ABSTRACT

Financial reporting contains the disclosure of financial information to the various

stakeholders about the financial performance and financial position of the organization
over a specified period of time. The financial reporting should be reliable and relevant.
It is required by each and every stakeholder for multiple reasons and purposes. By
enhancing financial reporting quality, it can reduce information asymmetries.
This research examines the influence of managerial ownership, institutional ownership,
company growth toward earning management and its implication on quality of
financial reporting for a manufactures company in which listed in The Indonesian
Stock Exchange (IDX). The manager who engage in ownwership aims to equalize the
interests of managers with shareholders. Institutional ownership is as share ownership
by external parties in the forms of institutions or groups. A company growth generates
significant positive cash flows or earnings and tends to have profitable investment.
Information about earnings has an important role for interested parties in a company
and in turn this lead the quality of financial reporting.
This research ia as casual research, and the explanatory research within descriptive and
verification approach is used as research method. Using the secondary data with
primary resource of annual audited financial statement of the company. The sample
selection was done by purposive sampling technique with 24 samples of manufacture
companies listed in IDX during 2011-2015. The hypotehesis test is conducted using
Partial Least Square (SEM-PLS).
The research results empirical evidence that managerial ownership and company
growth influence toward earning management, while institutional ownership did not
influence the earning management. Managerial ownership, institutional ownership, and
company growth did not influence the quality of financial reporting. Earning
management infuence the quality of financial reporting. Managerial ownership
influence the quality of financial reporting through earning management. Institutional
ownership and company growth through earning management did not influence the
quality of financial reporting.

Keywords: managerial and institutional ownership, company growth, earning

managementand quality of financial reporting.

1
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