i THE EFFECT OF BONUS PLAN, AUDIT COMMITTEE EFFECTIVENESS AND POLITICAL COST TOWARD DISCLOSURE QUALITY WITH EARNING MANAGEMENT AS MODERATING VARIABLE

Abstract

This research is conducted in order to find out whether the bonus plan, audit committee effectiveness and political cost have partial significant effect towards disclosure quality. The researcher also would like to check whether bonus plan, audit committee effectiveness and political cost do simultaneously affect the disclosure quality when earning management acts as moderating variable. Disclosure quality is measured by Global reporting initiatives-G4 guidelines, bonus plan is measured by return on assets (ROA), audit committee effectiveness is measured by Ika and Ghazali (2012) audit committees effectiveness index, political cost is measured by natural logarithm of total assets and modified Jones model is used to measure earning management. The data population is all property and real estate companies listed in Indonesia Stock Exchange from the period 2012-2016. The data is gathered based on purposive sampling technique. There are 10 companies selected with total 50 observable panel data. The statistical analysis method in this research uses multiple regression analysis for testing first, second and third hypotheses. Multiple regression analysis together with absolute residual method is being used for testing the fourth hypothesis. The finding from this research shows that both audit committee effectivenee and political cost have partial positive significant effect towards disclosure quality, while bonus plan has insignificant effect towards disclosure quality. When earning management is included in the model as moderating variable, the result shows that bonus plan, audit committee effectiveness and political cost have simultaneously effect towards disclosure quality.