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numbers of audit committee. Previous research only
used the number of meetings and finance experience
as a proxy of audit committee.This research is
important to do because of the increasing need for
IFR in the era of industrial revolution 4.0 and the
limiltless research in IFR.
The next section of this article is presented in the
following order, literature review, research
methodology, discussion, and conclusion. Literature
review is basic review for developing hyposthesis.
The methodology was written to choose the right
analysis tool to answer the research objectives.
Discussion is the part that describes the results of
statistical tests and the discussion. The article was
closed by drawing conclusions and implications of
the research.
2 THEORICAL FRAMEWORK
Financial statements are prepared based on the
accounting policies chosen by management. The
background of the audit committee's knowledge of
accounting will increase the understanding on the
selection of accounting policies of the audit
committee (Mutmainnah & Wardhani, 2013). In
addition, the accounting education background is
used to analyze financial statements prepared by
management for presenting quality financial
statements. Nuresa & Hadiprajitno (2013) states that
the supervision process carried out by companies
will increase if the audit committee has sufficient
understanding of financial reporting.
The professional background needed by audit
committee members is not just a background in
accounting and finance (Puspitaningrum & Atmini,
2012; Wang, 2015). Background in the field of
supervision and other business fields is also needed
so the oversight mechanism carried out by the audit
committee is more comprehensive. The results of
research conducted by Wang (2015) show that the
professional background of audit committee
members influences the quality of financial
statements. This findings differ with Puspitaningrum
& Atmini (2012). The other research stated there is
no relationship between the professional backgruond
of audit committees and IFR. Therefore, this study
measured the variable of professional background of
the audit committee in other business decision
making support.
The number of audit committee members is
depend on the size and complexity of the company.
In Indonesia the number of audit committees is
regulated in IFSA Regulation No.55/POJK.04/2015.
It regulated the minimum members of audit comittee
from independent commissioners and outside parties
of public companies. The number of audit
committee members influences the quality of
financial statements (Mutmainnah and Wardani,
2013). The influence of the number of audit
committee members on the quality of financial
reports has implications for the need for other
companies disclosures. In contrast to Mutmainnah
and Wardhani (2013), Nuresa dan Hadiprajitno
(2013) states that the number of audit committees
does not affect the quality of financial reporting. The
more the number of audit committees, the harder the
agreement can be made.
The oversight process carried out by the audit
committee is discussed regularly at audit committee
meetings. There is no minimum meetings number
that must be held by the audit committee, but the
number of meetings will affect predictability,
persistency, and conservatism of financial
statements (Mutmainnah and Wardhani; 2013). The
intensity of the meetings number will provide early
detection of possible fraud committed by
management (Nuresa & Hadiprajitno, 2013). In line
with the two researchers above, Puspitaningrum &
Atmini (2012) stated that the frequency of meetings
held by the audit committee would increase the
intensity of supervision and control by the audit
committee. Further supervision will affect the full
disclosure of IFR.
Large companies have better complexity and
management information systems than smaller
companies. Total Asset is wealth owned by the
company so that it can be used as a measure of the
company. The more assets company has, the more
funds it has to use IFR (Ojah & Mokoaleli-mokoteli,
2012; Puspitaningrum & Atmini, 2012).
3 RESEARCH METHOD
This research was conducted at financial industry
listed on the Indonesian stock exchange (IDX).
Financial industry need high transparency both
financial and non-financial reporting. In addition,
Garc (2018) also states that there are differences in
earnings quality and accounting conservatism
between management in the banking sector. This
difference will affect the full disclosure made by the
company.
Purposive sampling method used in this research.
The criteria of financial industry selected are; 1) the
companies are banks, securities, insurance, and other
investment companies; 2) End of December 31 fiscal
year, 3) completeness of IFR data including aspects
of audit committee profiles, and 4) IFR Period 2017.
Number of listed financial industries is 110
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