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LEMBAR

HASIL PENILAIAN SEJAWAT SEBIDANG ATAU PEER REVIEW KARYA ILMIAH : JURNAL ILMIAH

Judul karya ilmiah (artikel) : Sustainability Report Analysis: Content and Quality GRI-G4

Jumlah Penulis : 3 orang

Status Pengusul : Penulis ke 3

Nama Penulis : Dr. Indira Januarti, SE, M.Si, Akt

Identitas Jurnal Ilmiah

: a. Nama Jurnal : Pertanika Jurnal Social Science & Humanities : b. Nomor ISSN : ISSN: 0128-7702; e-ISSN: 2231-8534

: c. Volume, nomor, bulan, tahun

: 28 (S1) (2020), hal. 103 - 119 : d. Penerbit : Universiti Putra Malaysia Press : e. DOI artikel (jika ada) :

: f. Alamat web jurnal : http://www.pertanika.upm.edu.my/

: g. Terindeks di scimagojr / Thomson Reufer ISI knowledge atau di nasional / terindeks di DOAJ, CABi, Copernicus

: Scopus Q3,

Kategori Publikasi Jurnal Ilmiah : : Jurnal Ilmiah Internasional /Internasional bereputasi (beri pada kategori yang tepat) Jurnal Ilmiah Nasional Terakreditasi

Jurnal Ilmiah Nasional/ Nasional terindeks di DOAJ, CABI, Copernicus Hasil Penilaian Peer Review :

Komponen Yang Dinilai

Nilai Maksimal Jurnal Ilmiah Nilai Akhir Yang Diperoleh Internasional

bereputasi (Maks 40)

Internasional Nasional Terakreditasi

(Maks 25)

Nasional Tidak Terakreditasi

(Maks 10)

Nasional Terindeks DOAJ dll.

(Maks 20)

a. Kelengkapan unsur isi artikel (10%) 4 2 2,5 1 2

3,5

b. Ruang lingkup dan kedalaman pembahasan (30%)

12 6 7,5 3 6

11

c. Kecukupan dan kemutahiran data/informasi dan metodologi (30%)

12 6 7,5 3 6

10,5

d. Kelengkapan unsur dan kualitas penerbit (30%)

12 6 7,5 3 6

11

Total = (100%) 40 20 25 10 20

36

Nilai pengusul = (40% X36)/2 = 7,2

7,2 KOMENTAR / ULASAN PEER REVIEW

 Kelengkapan dan kesesuaian unsur Penulisan sudah cukup sesuai dan lengkap, mencakup; judul, pendahuluan,, sampai dengan kesimpulan dan daftar pustaka. Substansi artikel cukup sesuai bidang ilmu pengusul sebagai penulis ketiga (Ilmu Akuntansi).

 Ruang lingkup dan kedalaman pembahasan Substansi artikel cukup sesuai dengan ruang lingkup jurnal (Pertanika Jurnal Social Science &

Humanities). Kedalaman pembahasan cukup baik didukung dengan sumber referensi yang cukup memadai.

 Kecukupan dan Kemutakhiran Data &

Metodologi

Data dan metodologi merupakan metode yang cukup baru dengan hasil penelitian menunjukkan cukup adanya kebaruan informasi

 Kelengkapan unsur dan kualitas penerbit Jurnal internasional bereputasi, terindeks Scopus Q3, SJR 0,17

 Indikasi plagiasi Hasil uji turnitin menunjukkan, SI = 6%.

 Kesesuaian bidang ilmu Selaras dengan bidang ilmu pengusul, yaitu Akuntansi . Selaras dengan bidang ilmu pengusul, yaitu Akuntansi .

Semarang, 2020

Reviewer 1

Prof. Dr. Abdul Rohman, M.Si, Akt NIP. 196601081992021001

Departemen Akuntansi FEB Undip

Jabatan Fungsional : Guru Besar

v

(2)

LEMBAR

HASIL PENILAIAN SEJAWAT SEBIDANG ATAU PEER REVIEW KARYA ILMIAH : JURNAL ILMIAH

Judul karya ilmiah (artikel) : Sustainability Report Analysis: Content and Quality GRI-G4

Jumlah Penulis : 3 orang

Status Pengusul : Penulis ke 3

Nama Penulis : Dr. Indira Januarti, SE, M.Si, Akt

Identitas Jurnal Ilmiah

: a. Nama Jurnal : Pertanika Jurnal Social Science & Humanities : b. Nomor ISSN : ISSN: 0128-7702; e-ISSN: 2231-8534

: c. Volume, nomor, bulan, tahun

: 28 (S1) (2020), hal. 103 - 119 : d. Penerbit : Universiti Putra Malaysia Press : e. DOI artikel (jika ada) :

: f. Alamat web jurnal : http://www.pertanika.upm.edu.my/

: g. Terindeks di scimagojr / Thomson Reufer ISI knowledge atau di nasional / terindeks di DOAJ, CABi, Copernicus

: Scopus Q3,

Kategori Publikasi Jurnal Ilmiah : : Jurnal Ilmiah Internasional /Internasional bereputasi (beri pada kategori yang tepat) Jurnal Ilmiah Nasional Terakreditasi

Jurnal Ilmiah Nasional/ Nasional terindeks di DOAJ, CABI, Copernicus Hasil Penilaian Peer Review :

Komponen Yang Dinilai

Nilai Maksimal Jurnal Ilmiah Nilai Akhir Yang Diperoleh Internasional

bereputasi (Maks 40)

Internasional Nasional Terakreditasi

(Maks 25)

Nasional Tidak Terakreditasi

(Maks 10)

Nasional Terindeks DOAJ dll.

(Maks 20)

a. Kelengkapan unsur isi artikel (10%) 4 2 2,5 1 2 3,6

b. Ruang lingkup dan kedalaman pembahasan (30%)

12 6 7,5 3 6 10,5

c. Kecukupan dan kemutahiran data/informasi dan metodologi (30%)

12 6 7,5 3 6 10.4

d. Kelengkapan unsur dan kualitas penerbit (30%)

12 6 7,5 3 6 10,2

Total = (100%) 40 20 25 10 20 34,7

Nilai pengusul = 0,4/2

6,94 KOMENTAR / ULASAN PEER REVIEW

 Kelengkapan dan kesesuaian unsur Kelengakapan unsur penilaian telah ditulis dengan baik dan runtut.

 Ruang lingkup dan kedalaman pembahasan Pengungkapan yang dilakukan perusahaan untuk tetap eksis dengan menggunakan teori stakeholder.

Pembahasan temuan penelitian telah didukung dengan data dan telah dijelaskan dengan baik

 Kecukupan dan Kemutakhiran Data &

Metodologi

Menggunakan data sekunder untuk amatan laporan tahun 2018 yang tergolong baru. Metode penelitian telah dijelaskan dengan baik terkait sampel, definisi operasional variabel dan pengukurannya.

 Kelengkapan unsur dan kualitas penerbit Jurnal terindeks Scopus Q3, SJR 0,17

 Indikasi plagiasi Hasil uji Turnitin 6%

 Kesesuaian bidang ilmu Bidang ilmu akuntansi dengan kajian pengungkapan laporan keberlanjutan

Semarang, 17 April 2020

Reviewer 2

Prof. Faisal, SE, M.Si, Ph.D NIP. 197109042001121001

Departemen Akuntansi FEB Undip

Jabatan Fungsional : Guru Besar

v

(3)

Journal of Social Sciences & HumanitiesJournal of Social Sciences & HumanitiesJournal of Social Sciences & Humanities

VOL. 28 (S1) 2020

Vol. 28 (S1) 2020

Pertanika Editorial Office, Journal Division Putra Science Park

1st Floor, IDEA Tower II UPM-MTDC Technology Centre Universiti Putra Malaysia 43400 UPM Serdang Selangor Darul Ehsan Malaysia

http://www.pertanika.upm.edu.my/

E-mail: [email protected] Tel: +603 9769 1622

Pertanika Journal of Social Sciences & Humanities

Vol. 28 (S1) 2020

Guest Editor

Bachtiar H. Simamora

Tel: +603 9769 8851

Content

A special issue devoted to

Innovative Business Excellence for Sustainability with ICT as an Enabler

Innovative Business Excellence for Sustainability with ICT as an Enabler Preface

Bachtiar H. Simamora i

The Effect of Corporate Governance, E-Business and Innovation on Competitive Advantage and Implication on Financial Performance

Mulyono, Adler Haymans Manurung, Firdaus Alamsjah and Mohammad Hamsal

1

Resource Development Analysis in Indonesia Listed Bank Type IV: An

Overview of Resource Base Theory in Indonesia Banking Industry in Developing Competitive Advantage

Hardijanto Saroso and Agus Ridwan

15

Design and Commercialization Critics of Batik Lasem Vera Jenny Basiroen

29

The Survival of Batik Madura in Digital Era: A Case Study of Small Medium Enterprises (SME) at Batik Madura Center

Alwiyah, Evi Steelyana, Sayyida and Izah Tahir

43

Analysis of Factors Affecting the Consumer Behavior of Indonesian Banking Industry

Rahmat Siauwijaya and Evi Steelyana

59

Exploring Employee’s Motivation and Performance Factors: Evidence in a 3 Star Hotel in Indonesia by Contrasting Maslow’s and Çetin’s Model

Dewi Tamara, Respati Wulandari and Sanvenia Veronica

75

The Urgency of Community Participation in the Establishment of a Local Regulation Dani Sintara, Suhaidi and Faisal Akbar Nasution

87

Sustainability Report Analysis: Content and Quality GRI-G4

Acep Komara, Imam Ghozali and Indira Januarti 103

Tourist Segmentation in Jakarta: An Analysis of Jakarta’s City Branding Natalia, Louis Mordekhai and Fiona Cownie

121

Managerial Efforts in Building Organization Behaviour (Study of Entrepreneurs in Indonesia)

Rano Kartono, Sasmoko, Yasinta Indrianti, Lasmy and Hendry Hartono

141

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VOL. 28 (S1) 2020

(Special Issue)

A scientific journal published by Universiti Putra Malaysia Press

SOCIAL SCIENCES

& HUMANITIES

P e r t a n i k a J o u r n a l o f

Guest Editor Bachtiar H. Simamora A special issue devoted to

Innovative Business Excellence for Sustainability

with ICT as an Enabler

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Journal of Social Sciences & Humanities

JSSH

AN INTERNATIONAL PEER-REVIEWED JOURNAL

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Tel: +603 9769 8851 Fax: +603 9769 3623 E-mail: [email protected] URL: http://penerbit.upm.edu.my

Abdul Mansur M. Masih

Economics, Econometrics, Finance King Fahd University of Petroleum and Minerals, Saudi Arabia.

Ain Nadzimah

Modern Languages and Communication,

Universiti Putra Malaysia, Malaysia.

Alan Maley

English Language Studies, Teaching of English Language and Literature Leeds Metropolitan University, UK.

Ali Reza Kaldi

Medical Sociology, Sociology of Development Ageing, Gerontology University of Social Welfare and Rehabilitation, Tehran, Iran.

Brian Tomlinson

English Language Studies, The Evaluation, Adaptation and Development

Leeds Metropolitan University, UK.

Deanna L. Sharpe

Economics, Consumer and Family Economics, Personal Finance University of Missouri, Columbia, USA.

Dessy Irawati

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BNI Bank Representative in the Netherlands, EduPRIME Consulting, the Netherlands.

Jacqueline Pugh-Kitingan

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James R. Stock

Management Studies, Marketing, Logistics and Supply Chain Management, Quantitative Method University of South Florida, USA.

Jayum A. Jawan

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Tun Abd Razak Chair & Visiting Professor of Political Science Ohio University, Athens Ohio, USA (2015-2017).

Universiti Putra Malaysia, Malaysia.

Jonathan Newton

Classroom-based Second Language Acquisition, Language Teaching Methodology, the Interface of Culture and Language in Language Teaching and Learning, and Language/

Communication Training and Material Design for the Multicultural Workplace Victoria University of Wellington, New Zealand.

Marcus Bion GRIFFIN

Human Ecology, Anthropology, Tropical Agriculture, Fisheries

Cultural Learning Solutions, USA.

Mary Susan Philip

English Language Theatre in Malaysia and Singapore; Postcolonial Theatre University of Malaya, Malaysia.

Muzafar Shah Habibullah

Economics, Monetary Economics, Banking, Macroeconomics Universiti Putra Malaysia, Malaysia.

Patricia Matusky

Music, Ethnomusicology, Malay and Indonesian language, Literature and Culture

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Rama Mathew

Teacher Education, English Language Education including Young Learners and Language Assessment

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Rohany Nasir

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Shameem Rafik-Galea

English Language Studies, Linguistics, Applied Linguistics, Language and Communication

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Stephen J. HALL

English Language Studies, Linguist, Teacher Educator, TESOL Sunway University, Malaysia.

Stephen J. THOMA

Phsycology, Educational Psychology, The University of Alabama, USA.

Vahid Nimehchisalem

Modern Languages and Communication,

Universiti Putra Malaysia, Malaysia.

Victor T. King

Anthropology / Southeast Asian Studies White Rose East Asia Centre, University of Leeds, UK.

Barbara Wejnert

Political Sociologist: Gender Studies, Macro Political and Social Changes University at Buffalo, SUNY, USA.

Carolyn Graham

Music, Jazz Chants Harvard University, USA.

Dileep K. Mohanachandra

Psychology, Sociology, Technology Mohammed VI Polytechnic University, Morrocco.

Faith Trent AM FACE

Education: Curriculum development Flinders University, Adelaide, Australia.

Gary N. Mclean

Community and Social Development, International Human Resource Development, Organizational Development

Executive Director, International Human Resource Development Programs, EAHR, Teas A&M University, USA.

Graham Thurgood

English Language Studies, General Linguistics, Discourse and Syntax California State University, Chico., USA.

Handoyo Puji Widodo

English Language Teaching, ESP, Language Curriculum-Materials Design and Development, and Language Methodology

English Language Center Shantou University, China.

John R. Schermerhorn Jr.

Management Studies, Management and Organizational Behaviour, International Business Ohio University, USA.

Kent Matthews

Economics, Banking and Finance, Modelling and Forecasting the Macro Economy

Cardiff Business School, UK.

Lehman B. Fletcher

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Mohamed Ariff

Economics, Finance, Capital Market, Islamic Finance, FIscal Policy Sunway University, Malaysia.

Pal Ahluwalia

African Studies, Social and Cultural Theory, Post-colonial Theory Pro Vice-Chancellor (Research and Innovation), University of Portsmouth, UK.

Phillip Jones

Architectural Science, Sustainability in the Built Environment Welsh School of Architecture, Cardiff University, UK.

Rance P. L. Lee

Sociology

The Chinese University of Hong Kong, China.

Royal D. Colle

Communication Cornell University, USA.

Shonda Buchanan

American Literature Interim Chair Hampton University, USA.

Vijay K. Bhatia

Education: Genre Analysis and Professional Communication City University of Hong Kong, China.

INTERNATIONAL ADVISORY BOARD 2018-2021

ABSTRACTING AND INDEXING OF PERTANIKA JOURNALS

The journal is indexed in SCOPUS (Elsevier), Clarivate-Emerging Sources Citation Index (ESCI), BIOSIS, National Agricultural Science (NAL), Google Scholar, MyCite, ISC. In addition, Pertanika JSSH is recipient of “CREAM”

Award conferred by Ministry of Higher Education (MoHE), Malaysia.

The publisher of Pertanika will not be responsible for the statements made by the authors in any articles published in the journal. Under no circumstances will the publisher of this publication be liable for any loss or damage caused by your reliance on the advice, opinion or information obtained either explicitly or implied through the contents of this publication.

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No material published in Pertanika may be reproduced or stored on microfilm or in electronic, optical or magnetic form without the written authorization of the Publisher.

Copyright © 2018-19 Universiti Putra Malaysia Press. All Rights Reserved.

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Pertanika Journal of Social Sciences & Humanities Vol. 28 (S1) 2020

Contents

Innovative Business Excellence for Sustainability with ICT as an Enabler Preface

Bachtiar H. Simamora i

The Effect of Corporate Governance, E-Business and Innovation on Competitive Advantage and Implication on Financial Performance

Mulyono, Adler Haymans Manurung, Firdaus Alamsjah and Mohammad Hamsal

1

Resource Development Analysis in Indonesia Listed Bank Type IV: An

Overview of Resource Base Theory in Indonesia Banking Industry in Developing Competitive Advantage

Hardijanto Saroso and Agus Ridwan

15

Design and Commercialization Critics of Batik Lasem Vera Jenny Basiroen

29

The Survival of Batik Madura in Digital Era: A Case Study of Small Medium Enterprises (SME) at Batik Madura Center

Alwiyah, Evi Steelyana, Sayyida and Izah Tahir

43

Analysis of Factors Affecting the Consumer Behavior of Indonesian Banking Industry

Rahmat Siauwijaya and Evi Steelyana

59

Exploring Employee’s Motivation and Performance Factors: Evidence in a 3 Star Hotel in Indonesia by Contrasting Maslow’s and Çetin’s Model

Dewi Tamara, Respati Wulandari and Sanvenia Veronica

75

The Urgency of Community Participation in the Establishment of a Local Regulation Dani Sintara, Suhaidi and Faisal Akbar Nasution

87

Sustainability Report Analysis: Content and Quality GRI-G4

Acep Komara, Imam Ghozali and Indira Januarti 103

Tourist Segmentation in Jakarta: An Analysis of Jakarta’s City Branding Natalia, Louis Mordekhai and Fiona Cownie

121

Managerial Efforts in Building Organization Behaviour (Study of Entrepreneurs in Indonesia)

Rano Kartono, Sasmoko, Yasinta Indrianti, Lasmy and Hendry Hartono

141

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Enhancing the Economic Potential of Indigenous People in the Jababeka Industrial Area through Corporate Social Responsibility

Ulani Yunus, Triadi Sumbogo, Gayes Mahestu and Wajid Zulqarnain

155

PCAOB Sanction and Client Stock Market Reactions: Evidence from the Case of Ernst & Young Indonesia

Gatot Soepriyanto and Arfian Erma Zudana

167

Innovation in Traditional Food Products as Local Wisdom on Dodol Mandai Trias Septyoari Putranto, Tri Wiyana and Sarim

181

@_TNIAU: Case Study on Interactive Public Communication in Indonesia Yuanita Safitri and Mia Angeline

191

Internet of Things (IoT) for Energy Efficiency in Tourism-Related Industry Kasih Cakaputra Komsary, Tati Ernawati, Ade Hodijah and Dian Wardiana

203

Consumer Perceived Value, Attitude, Trust and Purchase Intention of Kuku Bima Ener-G Product

Selly Novela, Didiet Gharnaditya, Novita and Patricia Marie Wibisono

215

Training Model for Improving Human Resource Performance and Quality in a Parking Insurance Company

Respati Wulandari, Anita Maharani, David Young and Tania Winoto

229

Tobit Regression Analysis on Factors Influencing Dividend Policy of Indonesian Manufacturing Firms

Dezie L. Warganegara, Titik Indrawati, Evi Steelyana, Doni S. Warganegara and Mark Kam Loon Loo

243

Factors Affecting Earnings Quality in Companies Listed in Indonesia Stock Exchange

Stefanus Ariyanto, Sasya Sabrina and Theresia Lesmana

253

Inflation Effect, Interest Rate of Bank Indonesia Certificates (SBI) and Economic Growth on Rupiah Exchange Rate in Indonesia

Darman and Karyana Hutomo

261

The Effect of Banking Efficiency, Earnings Per Share and Price-Earnings Ratio towards the Stock Return of Banking Companies in Indonesia

Rahmat Siauwijaya

277

Voluntary Disclosure Level and Firm Valuation of Kompas100 Listed Firms Yanthi Hutagaol-Martowidjojo and Kevin Richard

289

The Effect of Website Quality on e-Trust of Customers: “The Case of ZEN Rooms”

Lucina Iswi Hapsari Sulistyoand Wenly Pranata

301

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Control of the Right to Strike Affecting the Productivity of State-Owned Enterprises Christian Orchard Perangin-Angin and Bismar Nasution

311

Design Thinking Corporate Training Effectiveness and the Attributes of the Trainers Ari Margiono and Tubagus Hanafi

323

Donald Digital Marketing: An Exploratory Study of Digital Political Marketing in Trump Presidential Campaign

Irmawan Rahyadi and Muhammad Aras

337

Chinese Ethnic Perspective on the Confucius Values of Leadership in West Java Fuqing Organization

Mulyani and Chyntia Ika Ratnapuri

347

Improving the Intensity of Sales through Digital Banking: The Case of Indonesian Banking Behaviour

Janita Sembiring Melialaand Puti Sinansari

359

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Pertanika J. Soc. Sci. & Hum. 28 (S1): 155 - 165 (2020)

SOCIAL SCIENCES & HUMANITIES

Journal homepage: http://www.pertanika.upm.edu.my/

Article history:

Received: 9 October 2019 Accepted: 3 January 2020 Published: 17 March 2020 ARTICLE INFO

E-mail addresses:

[email protected] (Ulani Yunus) [email protected] (Tri Adi Sumbogo) [email protected] (Gayes Mahestu) [email protected] (Wajid Zulqarnain)

*Corresponding author

ISSN: 0128-7702

e-ISSN: 2231-8534 © Universiti Putra Malaysia Press

Enhancing the Economic Potential of Indigenous People in the Jababeka Industrial Area through Corporate Social Responsibility

Ulani Yunus

1

*, Tri Adi Sumbogo

1

, Gayes Mahestu

1

and Wajid Zulqarnain

2

1Marketing Communication Program, Department of Communication,

Faculty of Economics and Communication, Bina Nusantara University, West Jakarta 11480, Indonesia

2Faculty of Media Sciences, Shaheed Zulfikar Ali Bhutto Institute of Science and Technology (SZABIST), Islamabad, Plot No. 67, Street No. 9, H-8/4, Islamabad, Pakistan

training and micro-finance, as well as community empowerment and economic improvement through the provision of assistance in the form of revolving capital, farm or business equipment, including mentoring. This research concluded that CSR Program of tenants could enhance the economic potential of indigenous peoples through Jababeka CSR program especially in training of entrepreneurship and be mentoring in business. The selection of the program was based on the type of products owned by tenant and the practical way of economic empowerment of local ABSTRACT

Jababeka is a brand of an industrial area located in Cikarang, Bekasi Regency, West Java Province, Indonesia. The purpose of this study was to find how were the CSR programs of the tenants of Jababeka could enhance the economic potential of indigenous peoples. The methodology used descriptive qualitative research. Data collection technique used were interviews, literature, and observations. The results showed that Jababeka used CSR as continuous improvements in succession planning to support company performance excellent.

Jababeka CSR program such as Economic, Fellowship, and Environmental. Economic

pillar relates to improving the quality of human resources through entrepreneurship

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Pertanika J. Soc. Sci. & Hum. 28 (S1): 243 - 252 (2020)

ISSN: 0128-7702 e-ISSN 2231-8534

SOCIAL SCIENCES & HUMANITIES

Journal homepage: http://www.pertanika.upm.edu.my/

Article history:

Received: 09 October 2019 Accepted: 03 January 2020 Published: 17 March 2020 ARTICLE INFO

E-mail addresses:

[email protected] (Dezie L. Warganegara) [email protected] (Titik Indrawati) [email protected] (Evi Steelyana)

[email protected] (Doni S. Warganegara) [email protected] (Mark Kam Loon Loo)

* Corresponding author

© Universiti Putra Malaysia Press

Tobit Regression Analysis on Factors Influencing Dividend Policy of Indonesian Manufacturing Firms

Dezie L. Warganegara

1

*, Titik Indrawati

1

, Evi Steelyana

1

, Doni S. Warganegara

2

and Mark Kam Loon Loo

3

1Department of Accounting, Faculty of Economics and Communication, Bina Nusantara University, Jakarta 11480, Indonesia

2Department of Accounting, Universitas Lampung, Jl. Prof. Dr. Ir. Sumantri Brojonegoro, RW.No: 1, Gedong Meneng, Kec. Rajabasa, Bandar-Lampung, Lampung 35145, Indonesia

3Mihalcheon School of Management, Concordia University of Edmonton, T5B 4E4, Edmonton, Canada

ABSTRACT

This study seeks to examine the determinants of dividend policies of manufacturing companies in Indonesia. The data for this study were drawn from a balanced sample of 111 public manufacturing firms listed in the Indonesia Stock Exchange between 2009 and 2013. A Tobit regression analysis with cluster-robust standard errors was then employed to find the effects of firm size, profitability, sales growth, financial leverage, and inter-period on the magnitude of dividend yield. This study finds that firm size, profitability, and sales growth positively influence the magnitude of dividends paid relative to stock prices received by shareholders. On the other hand, it also finds that financial leverage negatively affects dividends. Another result suggests the levels of dividends vary across time.

Keywords: Dividend policies, Indonesia Stock Exchange, manufacturing firms, Tobit regression

INTRODUCTION

Researchers have advanced numerous theories that relate the dividends with a firm’s value. Miller and Modigliani (1961) proposed the theory of dividend irrelevance that, in a perfect capital market, a firm’s value depended only on its investment policy and the return that its assets offered.

Other researchers pinpoint various factors

that cause dividends in practice to be value-

relevant. Regardless of the attempts for

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Pertanika J. Soc. Sci. & Hum. 28 (S1): 167 - 179 (2020)

ISSN: 0128-7702 e-ISSN 2231-8534

SOCIAL SCIENCES & HUMANITIES

Journal homepage: http://www.pertanika.upm.edu.my/

Article history:

Received: 09 October 2019 Accepted: 03 January 2020 Published: 17 March 2020 ARTICLE INFO

E-mail addresses:

[email protected] (Arfian Erma Zudana) [email protected] (Gatot Soepriyanto)

* Corresponding author

© Universiti Putra Malaysia Press

PCAOB Sanction and Client Stock Market Reactions: Evidence from the Case of Ernst and Young Indonesia

Gatot Soepriyanto

1

and Arfian Erma Zudana

2

*

1Department of Accounting, Faculty of Economics and Communication, Bina Nusantara University, Jakarta 11480, Indonesia

2School of Accounting and Commercial Law, Victoria University of Wellington Faculty of Law, Wellington 6012, New Zealand

ABSTRACT

The objective of this study was to examine the client share prices to news of the Public Company Accounting Oversight Board (PCAOB) censure on Ernst & Young Indonesia (EY-Indonesia) – the first against a Big Four auditor in Indonesia. Using an event study analysis, we found some evidence that EY-Indonesia clients had a significantly positive market reaction compared to the none EY-Indonesia clients in regard to the news of the PCAOB sanction. The results indicate that the remedial effects of EY’s actions taken after the sanction outweigh the negative effects. The results of this study are robust if compared to the abnormal returns for EY-Indonesia clients versus other Big 4 clients. This study is important to highlight the positive effects of the PCAOB sanction and monitoring to improve the audit quality in a developing market.

Keywords: Audit quality, auditor reputation, EY-Indonesia, Indosat, market reaction, PCAOB sanction

INTRODUCTION

Capital market investors heavily rely on accounting information to make informed decisions. However, as firms also hinge on financial resources provided by investors,

they are sometimes motivated to provide

accounting information that meets their own

interests. The assurance from an independent

party, such as an auditor, therefore, is vital to

ensure the reliability of a firm’s accounting

information. In particular, investors may

perceive an audit as a service to provide

assurance for information reliability and

minimize the opportunistic behaviour

related to companies’ financial statements

(Francis & Wilson, 1988; Krishnamurthy

et al., 2006; ). Accordingly, an audit firm

Referensi

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