Financial Distress and Governance Structure: An Empirical Study of Property and Real Estate Companies in Indonesia

Vika Miftahul Jannah; Yurnal Edward; Anne Monika  Fristy; Stevanus  Antoni.R

doi:10.38142/jogta.v4i3.1829

Authors

Vika Miftahul Jannah Edi Haryono Madani Institute of Islamic Studies, Riau, Indonesia
Yurnal Edward Edi Haryono Madani Institute of Islamic Studies, Riau, Indonesia
Anne Monika Fristy Master Institute of Technology and Business, Indonesia
Stevanus Antoni.R Master Institute of Technology and Business, Indonesia

DOI:

https://doi.org/10.38142/jogta.v4i3.1829

Keywords:

Financial Distress, Audit Committee, Board of Commissioners

Abstract

This study aims to analyze the effect of the audit committee and the board of commissioners on financial distress in property and real estate companies listed on the Indonesia Stock Exchange for the 2023–2024 period. The research population consisted of 94 companies, with a final sample of 61 companies (122 observations) selected through purposive sampling. Data analysis was performed using multiple linear regression with SPSS software. The results show that the audit committee has no significant effect on financial distress, indicating that its presence tends to serve as a regulatory formality rather than an effective monitoring mechanism. In contrast, the board of commissioners has a significant effect on financial distress, suggesting that effective supervisory roles can reduce the likelihood of financial difficulties. These findings reinforce agency theory, emphasizing that strong corporate governance mechanisms play a crucial role in mitigating agency conflicts and maintaining financial stability. The study implies that companies should strengthen the effectiveness of their boards of commissioners and that regulators need to ensure the substantive role of audit committees in corporate governance practices.

References

Al-Rassas, A. H., & Kamardin, H. (2015). Internal And External Audit Attributes, Audit Committee Characteristics, Ownership Concentration and Earnings Quality: Evidence from Malaysia. Mediterranean Journal of Social Sciences, 6(3), 458–470. Https://Doi.Org/10.5901/Mjss.2015.V6n3p458

Alexandra, C., Lionardi, M., William, W., Jennefer, S., & Meiden, C. M. (2022). Studi Literatur: Pengaruh Faktor Good Corporate Governance Terhadap Financial Distress. Owner, 6(1), 111–122. Https://Doi.Org/10.33395/Owner.V6i1.536

Amaniyah, E. (2023). Buku Referensi Dan Contoh Financial Distress. Eureka Media Aksara.

Dewi, N. K. D. S., Merawati, L. K., & Tandio, D. R. (2021). Pengaruh Struktur Kepemilikan, Komite Audit, Profil Perusahaan Dan Rasio Aktivitas Terhadap Pengungkapan Corporate Social Responsibility. Jurnal Kharisma, 3(1).

Effendi, M. A. (2020). The Power of Good Corporate Governance Teori dan Implementasi (Edisi 2). Salemba Empat.

Fama, E. F., & Jensen, M. C. (1983). Separation Of Ownership and Control. Corporate Governance: Values, Ethics and Leadership, 163–188. Https://Doi.Org/10.1086/467037

Franita, R. (2018). Mekanisme Good Corporate Governance dan Nilai Perusahaan. Lembaga Penelitian Dan Penulisan Ilmiah Aqli.

Gerged, A. M., Yao, S., & Albitar, K. (2023). Board Composition, Ownership Structure and Financial Distress: Insights from UK FTSE 350.

Goh, T. S. (2023). Monograf: Financial Distress. In Indomedia Pustaka.

Hardiansyah, F. (2022). Pengaruh Komite Audit, Kepemilikan Manajerial Dan Kepemilikan Institusional Terhadap Kondisi Financial Distress (Studi Empiris Pada Perusahaan Manufaktur Sektor Aneka Industri Yang Terdaftar Di BEI Periode 2015-2019). Stan: Ilmu Ekonomi.

Hasnati. (2014). Komisaris Independen & Komite Audit: Organ Perusahaan Yang Berperan Untuk Mewujudkan Good Corporate Governance di Indonesia (A. D. Sulistya (Ed.)). Perpustakaan Nasional: Katalog Dalam Terbitan (KDT).

Haziro, A. L., Negoro, N. P., & Bramanti, G. W. (2017). Pengaruh Karakteristik Komite Audit Terhadap Financial Distress Perbankan Indonesia. Jurnal Sains Dan Seni ITS, 6(1), 2337–3520. Www.Idx.Co.Id.

Hermawan, A., & Fajrina, A. N. (2017). Financial Distress: Dan Harga Saham. Mer-C Publishing.

Heykal, M., Prasetya, S., & Harsanti, P. S. (2024). Pengaruh Kualitas Pelayanan terhadap Kepuasan Pelanggan pada Jasa Wisata (Open Trip) CV Tidung Island. Jurnal Ekonomi Manajemen Akuntansi, 30(1), 250-265. https://doi.org/10.59725/ema.v30i1.226

Irmayanti, R., & Almurni, S. (2020). Pengaruh Komite Audit, Profitabilitas, Arus Kas Operasi, Dan Inflasi Terhadap Financial Distress. Sekolah Tinggi Ilmu Ekonomi Indonesia, 1–18.

Jensen, M., & Meckling, W. (1976). Theory of the Firm: Managerial Behavior, Agency Costs, and Ownership Structure. The Economic Nature of the Firm: A Reader, Third Edition, 283–303. Https://Doi.Org/10.1017/CBO9780511817410.023

Kristiani, F. T. (2019). Financial Distress: Teori Dan Perkembangan Dalam Konteks Indonesia. Intelegensia Media.

Kusmayadi, D., Rudiana, D., & Badruzaman, J. (2015). Good Corporate Governance. LPPM Universitas Siliwangi.

Kusnadi, Y., Leong, K. S., Suwardy, T., & Wang, J. (2016). Audit Committees and Financial Reporting Quality in Singapore. Journal of Business Ethics, 139(1), 197–214. Https://Doi.Org/10.1007/S10551-015-2679-0

Ma’ruf, M. F., & Kresnamurti, R. K. (2021). Pengaruh Good Corporate Dan Ukuran Perusahaan Terhadap Financial Distress Pada Perusahaan Manufaktur Sektor Aneka Industri Yang Terdaftar Di BEI. Proceedings of the 4th International Conference on Sustainable Innovation 2020-Accounting and Management (Icosiams 2020), 3(1), 1–13. Https://Doi.Org/10.2991/Aer.K.210121.046

Magena, M. (2020). Bank Power, Governance and Distress Bank Power, Block Ownership, Boards and Financial Distress Likelihood: An Investigation of Spanish Listed Firms. Journal of Corporate Finance2, 1–45.

Manossoh, H. (2016). Good Corporate Governance Untuk Meningkatkan Kualitas Laporan Keuangan. In PT Norlive Kharisma Indonesia: Bandung, ISBN: 978-602-73706-6-1.

Md-Rus, R., Nisham, K., Mohd, T., Latif, R. A., & Alassan, Z. N. (2013). Ownership Structure and Financial Distress. March 2016. Https://Doi.Org/10.12720/Joams.1.4.363-367

Ninda Febriyanti, F., & Khalifaturofi’ah, S. O. (2023). Good Corporate Governance and Financial Distress Pada Perusahaan Manufaktur Di Indonesia. Jurnal Ekonomi, 28(2), 274–291. Https://Doi.Org/10.24912/Je.V28i2.1625

Pamungkas, H., Ryad, A. M., Sayekti, F. N., & Irfian, Y. (2023). Good Corporate Governance, Ukuran Perusahaan dan Konservatisme Akuntansi Terhadap Financial Distress pada Perusahaan Sektor Transportasi dan Logistik yang Tercatat di BEI Periode 2017-2021. Journal Trial Balance, 1(2), 18–35.

Prasetio, R., & Paramitha, M. (2020). Pengaruh Likuiditas, Profitabilitas, Ukuran Perusahaan, dan Ukuran Dewan Komisaris Terhadap Pengungkapan Corporate Social Responsibility (CSR) pada Perusahaan Manufaktur yang Terdaftar Di BEI (Periode 2016-2018). Seminar Nasional Ilmu Terapan IV.

Sukirno, Putriatama, A., Dewanti, W., & Pustikaningsih, A. (2017). Pengaruh Komite Audit, Kepemilikan Institusional, Dan Persentase Saham Publik Terhadap Aktivitas Manajemen Laba. Nominal, VI(1).

Surifah, & Rofiqoh, I. (2020). Corporate Governance Badan Usaha Milik Negara. Graha Aksara Makassar.

Syofyan, E. (2021). Good Corporate Governance (GCG). Unisma Press. Http://Repository.Unp.Ac.Id/38387/1/EFRIZAL SYOFYAN Good Corporate Governance.Pdf