AUDIT COMMITTEE SIZE AND AUDIT COMMITTEE ACTIVITY ON FINANCIAL PERFORMANCE (An Empirical Study on IDX30)
Kata Kunci:
audit committee size, audit committee activity, financial performance, idx30Abstrak
The audit committee plays a vital role in financial performance. This study aims to determine the effect of audit committee size and audit committee activity on the financial performance of IDX30 index companies. This research was conducted on companies in the IDX30 index, which were listed on the Indonesia Stock Exchange in 2016–2018. This study used the annual report of the IDX30 company from 2016 until 2018. The sampling method is purposive sampling. Based on this method, 18 companies are acquired as a sample, with a 3-year observation period, resulting in 54 firm-year observations. Multiple regression was applied in processing the data. The data were analyzed using descriptive statistical analysis, correlation, and regression analysis. The results of the study showed that audit committee size did not have a significant effect on firm financial performance. Meanwhile, audit committee activity had a significant negative effect on firm financial performance. Simultaneously, audit committee size and audit committee activity have a significant negative effect on financial performance. The result implies that the audit committee size does not guarantee a good return on assets, while audit committee activity if done moderately it gives a good impact on the financial performance of the company.
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