scholarly journals Prediction modelling the financial distress using corporate governance indicators in Indonesia

2021 ◽  
Vol 10 (1) ◽  
pp. 18
Author(s):  
Irdha Yusra ◽  
Novyandri Taufik Bahtera
Keyword(s):  
Corporate Governance ◽  
Financial Distress ◽  
Audit Committee ◽  
Prediction Models ◽  
Stock Exchange ◽  
Governance Indicators ◽  
Financial Distress Prediction ◽  
Corporate Governance Mechanisms ◽  
Distress Prediction ◽  
The Board Of Directors

   We examine whether the indicators of company governance procedures are associated with the risk of bankruptcy or financial distress in Indonesia. An empirical study we conducted using a causal model of corporate governance indicators in forecasting financial distress. The data used in this study is panel data. Using samples from assembling companies registered on the Indonesia Stock Exchange during the 2017-2019 period, we obtained as many as 105 observations selected by the purposive sampling method. Our results indicate that financial distress can be predicted by corporate governance mechanisms, although statistically it is only proven by a few indicators in our study. Specifically, our results demonstrate that institutional ownership, managerial ownership, and independent commissioners do not affect financial distress. Furthermore, our study shows evidence of a significant influence between the size of the board of directors and audit committee on financial distress. Our interpretation is that research on financial distress prediction models using corporate governance indicators has provided empirical evidence. 

scholarly journals PENGARUH CORPORATE GOVERNANCE DAN FIRM SIZE TERHADAP FINANCIAL DISTRESS (Studi pada Perusahaan Perbankan yang terdaftar di Bursa Efek Indonesia periode 2017-2019)

2021 ◽  
Vol 19 (1) ◽  
pp. 13
Author(s):  
Robi Ridhayatul Gaos ◽  
Rina Mudjiyanti
Keyword(s):  
Corporate Governance ◽  
Firm Size ◽  
Financial Distress ◽  
Audit Committee ◽  
Stock Exchange ◽  
Sampling Technique ◽  
Financial Distress Prediction ◽  
Analysis Technique ◽  
Study Results ◽  
The Board Of Directors

This study aims to find empirical evidence of the influence of corporate governance and firm size on financial distress. The sample used in this study is a banking company listed on the Indonesia Stock Exchange (BEI) for the 2017-2019 period. The sampling technique used was purposive sampling and obtained a sample of 40 samples that met the criteria. The data analysis technique used is multiple regression analysis. The financial distress criteria in this study measured using the Z-score in Altman's financial distress prediction model. Based on the study results, it can be concluded that managerial ownership, the board of commissioners, and the audit committee have no effect on financial distress, while the board of directors has a positive and significant effect on financial distress and firm size has a negative and significant effect on financial distress.

Board structure and financial distress in Brazilian firms

2019 ◽  
Vol 15 (5) ◽  
pp. 813-828 ◽  
Author(s):  
Guilherme Freitas Cardoso ◽  
Fernanda Maciel Peixoto ◽  
Flavio Barboza
Keyword(s):  
Financial Distress ◽  
Prediction Models ◽  
Stock Exchange ◽  
Conditional Logistic Regression ◽  
Optimal Number ◽  
Board Structure ◽  
Content Type ◽  
Board Characteristics ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors

Purpose The purpose of this paper is to investigate what board characteristics affect companies in periods of financial distress (FD) among non-financial Brazilian firms and examine which model best fits to predict FD. Design/methodology/approach The sample comprises data from 2010 to 2016 of the non-financial Brazilian firms listed on the Brazilian Stock Exchange. To measure this relationship, a conditional logistic regression is performed. Findings A U-shaped relationship between the size of the board of directors (BD) and FD is found in all models, indicating an optimal number of six members in the BD during the period of FD. However, board characteristics (related to composition and directors’ independence) are insufficient to align the shareholders’ interests and unsuitable for avoiding or even reducing FD in firms when other factors are neglected. Furthermore, the results reveal what variables provide the best-fitting models to predict FD. Originality/value To the best of the authors’ knowledge, this is the first study that investigates how the composition of the BD affects the FD likelihood in the Brazilian context. The findings are potentially of interest to researchers and practitioners since this paper contributes to the growing literature on the influence of corporate governance mechanisms in periods of FD and the understanding of its prediction models.

scholarly journals Effect of Corporate Governance Mechanisms on Value Relevance of EPS and BV: Evidence from the Indian Tourism Industry

2021 ◽  
Vol 2 (1) ◽  
pp. 31-44
Author(s):  
Saleem Ahmed Aqlan ◽  
Yaser M. Alashaf ◽  
Mohammed Salem Barakat ◽  
Dheya A. Zaid
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Value Relevance ◽  
Stock Exchange ◽  
Size Composition ◽  
Tourism Industry ◽  
Governance Mechanisms ◽  
Share Prices ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors

This paper examines corporate governance's effect on the valuation of Earnings per Share (EPS) and Book Value (BV).Differently from empirical previous studies in the area of corporate governance and value relevance of EPS and BV, this study investigates this impact within a unique setting of publicly listed tourism firms Using panel data from a selection of some Bombay Stock Exchange (BSE) listed companies from 2013 to 2015. The paper explored three aspects of the mechanisms of corporate governance: the board of directors (size, composition and diligence), the audit committee (size, composition and diligence) and foreign ownership .The study uses descriptive statistics, correlation and multi-regression model to analyse the influence of corporate governance on the value relevance of EPS and BV for the Indian tourism industry. The results show that the interaction between corporate governance mechanisms and value relevance of BV has more impact on the share prices than EPS. It is recommended that the Indian tourism industry should pay more focus to corporate governance mechanisms in order to improve its value relevance of EPS, BV and share prices.

scholarly journals Pengaruh Mekanisme Good Corporate Governance (GCG) dan Profitabilitas Perusahaan Terhadap Peringkat Obligasi (studi empiris pada Perusahaan Manufaktur yang terdaftar di BEI tahun 2014-2015)

2020 ◽  
Vol 6 (1) ◽  
Author(s):  
Kunni Fauztina Sahhyla ◽  
Sulistyo Sulistyo ◽  
Rita Indah Mustikowati
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Audit Committee ◽  
Stock Exchange ◽  
Descriptive Analysis ◽  
Return On Assets ◽  
Bond Ratings ◽  
Good Corporate Governance ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors

This study aims to determine the effect of good corporate governance mechanisms and company profitability on bond ratings. The population used in this study is companies listed on the Indonesia Stock Exchange for the period 2014-2015 and the sample determination method used is purposive judgment sampling. Samples obtained were 32 bond issuing companies. Data analysis techniques used are descriptive analysis, classic assumption test, multiple linear regression test, and hypothesis testing. This study found that simultaneous mechanisms of good corporate governance and corporate profitability affect bond ratings. Partially, this study found that the mechanism of good corporate governance that was proxied by the board of directors (DD), audit committee (KA), company size (UK), board of directors (DK) and profitability that was proxied by Return on Assets affected the bond rating, whereas Managerial ownership (KM), institutional ownership (IC) have no effect on bond ratings.

scholarly journals Pengaruh Mekanisme Good Corporate Governance Dan Struktur Kepemilikan Terhadap Pengungkapan Sustainability Report

2021 ◽  
Vol 11 (1) ◽  
pp. 129-138
Author(s):  
Masiyah Kholmi ◽  
Muhammad Nizzam Zein Susadi
Keyword(s):  
Corporate Governance ◽  
Audit Committee ◽  
Stock Exchange ◽  
Sampling Technique ◽  
Governance Mechanism ◽  
Good Corporate Governance ◽  
Corporate Governance Mechanisms ◽  
The Board Of Directors ◽  
Corporate Governance Mechanism ◽  
Sustainability Reports

This research has a purpose to analysis the effect of good corporate governance mechanism and ownership structures on the disclosure of sustainability reports. Purposive sampling method was applied sampling technique certain of criteria. The sample is 47 companies from a population of 627 companies listed on the Indonesia Stock Exchange (BEI) in 2018. Data collection techniques used the documentation method. This research uses data analysis tools with the Smart PLS 3 application to test hypotheses. The results showed that the variables of good corporate governance mechanisms that were proxied by the audit committee, the independent board of commissioners, and the board of directors had a significant effect on the disclosure of sustainability reports, ownership structure variables that were proxied with managerial ownership, institutional ownership, and foreign ownership also affected the disclosure of sustainability reports

scholarly journals The Relationship between Financial Distress and Financial Health Prediction Model: A Study in Public Manufacturing Companies Listed on Indonesia Stock Exchange (IDX)

2020 ◽  
Vol 22 (1) ◽  
pp. 18-27
Author(s):  
Khaira Amalia Fachrudin
Keyword(s):  
Financial Distress ◽  
Prediction Models ◽  
Stock Exchange ◽  
Actual Condition ◽  
Manufacturing Companies ◽  
Financial Health ◽  
Weak Correlation ◽  
Financial Distress Prediction ◽  
Distress Prediction ◽  
The Relationship

Financial distress prediction models of Altman, Springate, Zmijewski, Grover, and Khaira have been widely applied to predict financial distress and financial health. This study aims to analyze score correlations within the prediction results of the mentioned models applied in manufacture companies listed in the Indonesian Stock Exchange. The sample includes 30 companies which faced financial distress during economic crisis in 1997–1998 and, as comparison, incorporates 28 financially healthy companies. Observations were made during one and two years before the financial distress occurred, i.e. between 1995 until 1999, as well as from 2015 until 2018 to measure the financial health level in the companies. In this study, we use the correlation analysis. The results showed that  models which have a strong and significant relationship at alpha 5% are models from Altman - Springate, Altman - Khaira, Springate - Khaira, and Zmijewski - Khaira. Grover model which does not have the predictor in the form of leverage, however has a weak correlation with other model as well as the actual condition

Corporate Governance and The Modification of Audit Opinion: A Study in The Jordanian Market

1970 ◽  
Vol 2 (2) ◽  
pp. 28-46
Author(s):  
Mansour Saaydah
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Audit Committee ◽  
Stock Exchange ◽  
Unexpected Result ◽  
Audit Opinion ◽  
Financial Firms ◽  
Governance Indicators ◽  
The Board Of Directors ◽  
The Relationship

The objective of this study is to examine the relationship between some Corporate Governance indicators and the probability of modifying the independent auditor opinion in the Jordanian market. The sample consists of 104 non-financial firms listed on Amman stock Exchange for the year 2015. The logistic regression via SPSS is used to analyze the data. The results show that firm’s profitability (measured by ROA) and the number of institutional investors on the board of directors are significant negative predictors of the probability of receiving modified audit opinion by the firm. That is the higher the firm’s ROA and the larger number institutional investor representatives on the board of directors the less likely the firm will receive a modified audit opinion. On the other hand, the results also show that the board of directors’ size is significant positive predictor of receiving a modified audit opinion by the firm. That is the larger the size of the board of directors the more likely the firm will receive a modified audit opinion. Although, it is an unexpected result it agrees with some other studies results. Finally, board independence, board activity and the presence of audit committee have no significant impact on the type of audit opinion the firm receives.

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