Recommendation - S UGGESTIONS AND R ECOMMENDATION

B. S UGGESTIONS AND R ECOMMENDATION

2. Recommendation

From the above limitations, it is suggested that in future researches:

a. The sample sizes can be expanded to include all listed companies in the IDX and to distinguish the impact of multiple directorship from financial and non- financial sector or per industrial classification.

b. The measurement of accrual-based earnings management can be changed to other models, such as Larcker and Richardson (2004), Kothari et al.

(2005), and Beneish (1997, 1999) model to improve the understanding on the influence of multiple directorship and political connections from perspective of accruals manipulation.

71 c. The measurement of multiple directors can further detail the definition of external connectedness as being only connected to public companies. Also there can be a more refined definition for including the newly appointed director(s) since it is directly related to the score value of measurement.

Furthermore, the impact of multiple directorship in subsidiaries of the same group or in companies outside of the group. These can be applied to state-owned enterprises as well.

d. The measurement of political connection can depart from the usual 1-0 criteria to improve the accuracy and the reflection of the influence of different extent of political connection on earnings management, in conjunction with the presence of multiple directorships.

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82 APPENDIX Appendix 1 Sample Companies List

No Ticker Name

1 GGRM Gudang Garam Tbk

2 ICBP Indofood CBP Sukses Makmur Tbk 3 INDF Indofood Sukses Makmur Tbk 4 INTP Indocement Tunggal Prakarsa Tbk 5 KLBF Kalbe Farma Tbk

6 SMGR Semen Indonesia (Persero) Tbk 7 UNVR Unilever Indonesia Tbk

Appendix 2 Composite measurement

No Ticker Year MUL POL EM

1 GGRM 2013 1 0 - 0.054838499081716

2 ICBP 2013 1 0 0.035931744207060

3 INDF 2013 1 0 0.004325499123720

4 INTP 2013 1 0 - 0.028771341876220

5 KLBF 2013 1 1 0.021074950754800

6 SMGR 2013 0 1 - 0.024126191310978

7 UNVR 2013 1 1 0.213140753880684

8 GGRM 2014 1 0 0.008881384000288

9 ICBP 2014 1 0 - 0.009495461551603

10 INDF 2014 1 0 - 0.000460785262238

11 INTP 2014 1 0 - 0.017406013715174

12 KLBF 2014 1 1 0.068907873780380

13 SMGR 2014 0 1 - 0.023900884178904

14 UNVR 2014 1 0 0.130402444449129

15 GGRM 2015 1 0 0.009975446990630

16 ICBP 2015 1 0 - 0.005087273288475

17 INDF 2015 1 0 - 0.007834708899430

18 INTP 2015 1 0 0.034328272263606

19 KLBF 2015 1 1 0.045736873859818

20 SMGR 2015 0 1 - 0.007116550709195

21 UNVR 2015 1 0 0.072040296707939

22 GGRM 2016 1 0 0.070900835346487

23 ICBP 2016 1 0 0.007552368710042

24 INDF 2016 1 0 0.005455201049573

25 INTP 2016 1 0 0.028907421610125

26 KLBF 2016 1 1 0.011116964298915

83 Appendix 2 Composite measurement (continued)

No Ticker Year MUL POL EM

27 SMGR 2016 0 1 - 0.049740460612166

28 UNVR 2016 1 0 0.076510248608753

29 GGRM 2017 1 0 0.0637480587401383

30 ICBP 2017 1 0 -0.0676844094760888

31 INDF 2017 1 0 -0.0653618935647358

32 INTP 2017 1 0 0.0384051861090257

33 KLBF 2017 1 1 0.0042590246496302

34 SMGR 2017 0 1 0.0053403715308014

35 UNVR 2017 1 0 0.0599041549913429

36 GGRM 2018 1 0 0.0140445059031812

37 ICBP 2018 1 0 0.0193675912817146

38 INDF 2018 1 0 -0.0654853238721694

39 INTP 2018 1 0 0.0344305980269778

40 KLBF 2018 1 1 0.0960649909876003

41 SMGR 2018 0 1 -0.0111519707985782

42 UNVR 2018 1 0 0.0267563778147656

Appendix 3 Multiple Directorship measurement

No Ticker Year

2013 2014 2015 2016 2017 2018

1 GGRM 1 1 1 1 1 1

2 ICBP 1 1 1 1 1 1

3 INDF 1 1 1 1 1 1

4 INTP 1 1 1 1 1 1

5 KLBF 1 1 1 1 1 1

6 SMGR 0 0 0 0 0 0

7 UNVR 1 1 1 1 1 1

Appendix 4 Political Connection measurement

No Ticker Year

2013 2014 2015 2016 2017 2018

1 GGRM 0 0 0 0 0 0

2 ICBP 0 0 0 0 0 0

3 INDF 0 0 0 0 0 0

4 INTP 0 0 0 0 0 0

5 KLBF 1 1 1 1 1 1

6 SMGR 1 1 1 1 1 1

7 UNVR 0 0 0 0 0 1

84 Appendix 4 Earnings Management measurement

No Ticker 2018