THE INFLUENCE OF THE LEVEL OF CORPORATE SOCIAL RESPONSIBILITY DISCLOSURES TO EARNINGS QUALITY THE INFLUENCE OF THE LEVEL OF CORPORATE SOCIAL RESPONSIBILITY DISCLOSURES TO EARNINGS QUALITY.
THE INFLUENCE OF THE LEVEL OF CORPORATE SOCIAL
RESPONSIBILITY DISCLOSURES TO EARNINGS QUALITY
THESIS
Presented as Partial Fulfillment of the Requirement for the Degree of
Sarjana Ekonomi (S1) in Accounting Program Faculty of Economics
Universitas Atma Jaya Yogyakarta
Compiled by:
Stelah Yanuaristi Tamba
NPM: 111518810
FACULTY OF ECONOMICS
UNIVERSITAS ATMA JAYA YOGYAKARTA
2015
i
ii
iii
iv
ACKNOWLEDGEMENT
Praise and glory are to Jesus Christ, the God Almighty, for His mercy and
His blessings within my college years in Universitas Atma Jaya Yogyakarta;
especially during my thesis writing process. I give thanks to Him for His deeds
are awesome and amazing in my life, and because of that I can write and finish
my thesis entitled “The Influence of the Level of Corporate Social
Responsibility Disclosures to Earnings Quality”. I also feel grateful because He
sends me so many people to support me from the start until I finish this thesis and
my study. I would like to use this opportunity to express thank you to them
personally. Those people are:
1. Mrs. Jenjang Sri Lestari, SE., M.Comm, Akt. as my advisor who has given
me her time, attention, knowledge, help, guidance during the process of
writing this thesis. Thank you for thought me how to write my thesis well.
2. My beloved family. My mom, dad and my brother, who always pray, love,
trusting and support me to finish my thesis and my study. My cousins,
Namnam, Yuyun and Monica. Thanks for all your prayers and support for
me, you guys are the best cousins ever.
3. Remundus Kelvin Tjong, who always has so many ways to make me smile
and cheer me up when I writing my thesis, thanks for always love me,
trusting and support that I can make it in time.
4. IFAP’11 family; Tacik a.k.a Stefani, Nyonyah a.k.a Ivana, Pinpin a.k.a
Vini, Mas a.k.a Vendix, Debo a.k.a Debora, and Cilpi a.k.a Shylvie, for
v
struggling together these 4 years and helping each other to finish our
undergraduate degree. I will the moments with you guys, see you on top.
5. My second home in Jogja. PMK Oikummene UAJY, place where I knew
who Jesus is, place where I learn how to love each other, place where I
trained by God to be His army. For all the family members, thank you for
the prayers, love, care and support for me, I love you guys. Especially for
my “2011” brothers and sisters, Renal a.k.a Kresnal Pangaroan, Kyumis
a.k.a Wisdom Sandjaya Papendang, Oppa a.k.a Catur Hezron, Cik yo a.k.a
Krisectio V. Lumbanraja, Pesyek a.k.a Katarina Tathya Ratri, Kak Les
a.k.a Lestyka Fylindra and Tutut Indargo, S.H., thanks for everything; you
guys knew how you are meaning to me. I know it is not the end, but it is
just the beginning for us. Cannot wait to hear your stories guys.
6. My elder brother and sisters in PMK Oikumene UAJY, Ko Teguh, Kak
Siska and Mace Agit. Thanks for guiding me within my college years, all
the teaching from you guys are so meaningful for me, thanks for support
and being a good example for me. I love three of you.
7. Riska and Nike, my sisters in Christ. Thanks for always supports and pray
for me. I love both of you.
8. Family of Kerukunan Kawanua Tontemboan in Merauke. Thanks for the
support and prayers for me.
9. All other lecturers that share their knowledge and friends that I cannot
mention one by one.
vi
In the end, I recognize that this thesis is far from perfect and the being open
to receive suggestions, comments, and constructive criticism of each reader of this
thesis.
Yogyakarta, September 16th, 2015
Stelah Yanuaristi Tamba
vii
MOTTO AND DEDICATION
“Bagiku, kuliah adalah pelayanan dan kesaksian, sedangkan kelulusanku adalah
pengutusan” – Teguh Triguna
“Whatever you are doing, work at it with enthusiasm, as to the Lord and not for
people” – Colossians 3:23
“I can do all things trough Christ who strengthens me” – Philippians 4:13
“Never stop trying. Never stop believing. Never give up. Your day will come” –
unknown
“Sitou Timou Tumou Tou – we are blessed to be a blessing to other people” – Dr.
Sam Ratulangi
This thesis is dedicated to:
Jesus Christ
My beloved family
My alma mater Atma Jaya Yogyakarta
viii
TABLE OF CONTENTS
TITLE PAGE……………………………………………………………
i
SUPERVISOR APPROVAL…………………………………………...
ii
THESIS APPROVAL…………………………………………………..
iii
AUTHENCITY ACKNOWLEDGEMENT……………………………
iv
ACKNOWLEDGEMENT……………………………………………....
v
MOTTO AND DEDICATION………………………………………….
viii
TABLE OF CONTENTS………………………………………………..
ix
LIST OF TABLES……………………………………………………….
xiii
LIST OF PICTURES……………………………………………………
xiv
LIST OF APPENDIXES………………………………………………..
xv
CHAPTER I: INTRODUCTION……………………………………….
1
1.1 Background of Research…………………………………….
1
1.2 Research Question…………………………………………...
6
1.3 Objective of Research………………………………………..
6
1.4 Contribution of Research…………………………………….
6
1.5 Systematic of Writing………………………………………..
7
CHAPTER II: THEORETICAL BACKGROUND AND HYPOTHESIS
DEVELOPMENT……………………………………………………….
9
2.1 Stakeholder Theory………………………………………….
9
ix
2.2 Corporate Social Responsibility……………………………..
10
2.3 Disclosure……………………………………………………
10
2.3.1 Definition of Disclosure……………………………
10
2.3.2 Level of Disclosure………………………………...
12
2.3.3 Type of Disclosure…………………………………
12
2.3.4 Corporate Social Responsibility Disclosure……….
13
2.4 Information Asymmetries……………………………………
13
2.5 Earnings Quality……………………………………………..
14
2.6 Positive Accounting Theory…………………………………
15
2.7 Earnings Management……………………………………….
16
2.8 Previous Research…………………………………………...
17
2.9 Hypothesis Development……………………………………
20
CHAPTER III: RESEARCH METHODOLOGY…………………….
23
3.1 Type of Research……………………………………………
23
3.2 Population and Sample………………………………………
23
3.3 Type and Data Collection Method………………………….
24
3.4 Definition and Measurement of Variables……...…………...
24
3.4.1 Independent Variable………..…………………….
24
3.4.2 Dependent Variable……...………………………...
25
3.4.3 Control Variable…………………………………...
26
x
3.5 Empirical Model…………………………………………….
29
3.6 Normality Test………………………………………………
30
3.7 Classical Assumption test…………………………………...
30
3.7.1 Multicollinearity Test……………………………..
30
3.7.2 Heterokedasticity Test…………………………….
30
3.7.3 Autocorrelation Test………………………………
31
3.8 Hypothesis Testing…………………………………………..
31
3.8.1 R2 Test…………………………………………….
32
3.8.2 F-test………………………………………………
32
3.8.3 T-test………………………………………………
33
CHAPTER IV: DATA ANALYSIS AND DISCUSSION…………….
34
4.1 Sample Selection……………………………………………
34
4.2 Descriptive Statistics Test…………………………………..
34
4.3 Normality Test………………………………………………
36
4.4 Result of Classical Assumption Test………………………..
37
4.4.1 Multicollinearity Test……………………………..
37
4.4.2 Heteroscedasticity Test…………………………….
38
4.4.3 Autocorrelation Test……………………………….
38
4.5 Hypothesis Testing…………………………………………..
39
4.6 Discussion……………………………………………………
41
xi
CHAPTER V: CONCLUSION AND SUGGESTION…………………
44
5.1 Conclusion…………………………………………………...
44
5.2 Research Limitation and Suggestion…………………………
44
REFERENCES…………………………………………………………… 45
xii
LIST OF TABLES
Table 4.1 Sample Selection…………………………………………….
34
Table 4.2 Descriptive Statistics………………………………………...
35
Table 4.4 Correlation Matrix Table…………………………………….
37
Table 4.5 White Heteroscedasticity Tests………………………………
38
Table 4.6 Breusch-Godfrey Test………………………………………..
38
Table 4.7 Hypothesis Testing…………………………………………...
39
Table 4.8 Hypothesis Testing Result of New Model…………………...
40
xiii
LIST OF PICTURE
Picture 4.3 Jarque-Bera Test……………………………………………
xiv
36
LIST OF APPENDIXES
APPENDIX I: List Items of Voluntary Disclosure of Corporate Social
Responsibility
APPENDIX II: List Items of Mandatory Disclosure of Corporate Social
Responsibility from (BAPEPAM-LK) No.KEP-431/BL/2012 Point 2.h.1
APPENDIX III: List of Mining Companies 2012-2014
APPENDIX IV: Test Results for the New Model
APPENDIX V: List of Data Collection for Regression
xv
RESPONSIBILITY DISCLOSURES TO EARNINGS QUALITY
THESIS
Presented as Partial Fulfillment of the Requirement for the Degree of
Sarjana Ekonomi (S1) in Accounting Program Faculty of Economics
Universitas Atma Jaya Yogyakarta
Compiled by:
Stelah Yanuaristi Tamba
NPM: 111518810
FACULTY OF ECONOMICS
UNIVERSITAS ATMA JAYA YOGYAKARTA
2015
i
ii
iii
iv
ACKNOWLEDGEMENT
Praise and glory are to Jesus Christ, the God Almighty, for His mercy and
His blessings within my college years in Universitas Atma Jaya Yogyakarta;
especially during my thesis writing process. I give thanks to Him for His deeds
are awesome and amazing in my life, and because of that I can write and finish
my thesis entitled “The Influence of the Level of Corporate Social
Responsibility Disclosures to Earnings Quality”. I also feel grateful because He
sends me so many people to support me from the start until I finish this thesis and
my study. I would like to use this opportunity to express thank you to them
personally. Those people are:
1. Mrs. Jenjang Sri Lestari, SE., M.Comm, Akt. as my advisor who has given
me her time, attention, knowledge, help, guidance during the process of
writing this thesis. Thank you for thought me how to write my thesis well.
2. My beloved family. My mom, dad and my brother, who always pray, love,
trusting and support me to finish my thesis and my study. My cousins,
Namnam, Yuyun and Monica. Thanks for all your prayers and support for
me, you guys are the best cousins ever.
3. Remundus Kelvin Tjong, who always has so many ways to make me smile
and cheer me up when I writing my thesis, thanks for always love me,
trusting and support that I can make it in time.
4. IFAP’11 family; Tacik a.k.a Stefani, Nyonyah a.k.a Ivana, Pinpin a.k.a
Vini, Mas a.k.a Vendix, Debo a.k.a Debora, and Cilpi a.k.a Shylvie, for
v
struggling together these 4 years and helping each other to finish our
undergraduate degree. I will the moments with you guys, see you on top.
5. My second home in Jogja. PMK Oikummene UAJY, place where I knew
who Jesus is, place where I learn how to love each other, place where I
trained by God to be His army. For all the family members, thank you for
the prayers, love, care and support for me, I love you guys. Especially for
my “2011” brothers and sisters, Renal a.k.a Kresnal Pangaroan, Kyumis
a.k.a Wisdom Sandjaya Papendang, Oppa a.k.a Catur Hezron, Cik yo a.k.a
Krisectio V. Lumbanraja, Pesyek a.k.a Katarina Tathya Ratri, Kak Les
a.k.a Lestyka Fylindra and Tutut Indargo, S.H., thanks for everything; you
guys knew how you are meaning to me. I know it is not the end, but it is
just the beginning for us. Cannot wait to hear your stories guys.
6. My elder brother and sisters in PMK Oikumene UAJY, Ko Teguh, Kak
Siska and Mace Agit. Thanks for guiding me within my college years, all
the teaching from you guys are so meaningful for me, thanks for support
and being a good example for me. I love three of you.
7. Riska and Nike, my sisters in Christ. Thanks for always supports and pray
for me. I love both of you.
8. Family of Kerukunan Kawanua Tontemboan in Merauke. Thanks for the
support and prayers for me.
9. All other lecturers that share their knowledge and friends that I cannot
mention one by one.
vi
In the end, I recognize that this thesis is far from perfect and the being open
to receive suggestions, comments, and constructive criticism of each reader of this
thesis.
Yogyakarta, September 16th, 2015
Stelah Yanuaristi Tamba
vii
MOTTO AND DEDICATION
“Bagiku, kuliah adalah pelayanan dan kesaksian, sedangkan kelulusanku adalah
pengutusan” – Teguh Triguna
“Whatever you are doing, work at it with enthusiasm, as to the Lord and not for
people” – Colossians 3:23
“I can do all things trough Christ who strengthens me” – Philippians 4:13
“Never stop trying. Never stop believing. Never give up. Your day will come” –
unknown
“Sitou Timou Tumou Tou – we are blessed to be a blessing to other people” – Dr.
Sam Ratulangi
This thesis is dedicated to:
Jesus Christ
My beloved family
My alma mater Atma Jaya Yogyakarta
viii
TABLE OF CONTENTS
TITLE PAGE……………………………………………………………
i
SUPERVISOR APPROVAL…………………………………………...
ii
THESIS APPROVAL…………………………………………………..
iii
AUTHENCITY ACKNOWLEDGEMENT……………………………
iv
ACKNOWLEDGEMENT……………………………………………....
v
MOTTO AND DEDICATION………………………………………….
viii
TABLE OF CONTENTS………………………………………………..
ix
LIST OF TABLES……………………………………………………….
xiii
LIST OF PICTURES……………………………………………………
xiv
LIST OF APPENDIXES………………………………………………..
xv
CHAPTER I: INTRODUCTION……………………………………….
1
1.1 Background of Research…………………………………….
1
1.2 Research Question…………………………………………...
6
1.3 Objective of Research………………………………………..
6
1.4 Contribution of Research…………………………………….
6
1.5 Systematic of Writing………………………………………..
7
CHAPTER II: THEORETICAL BACKGROUND AND HYPOTHESIS
DEVELOPMENT……………………………………………………….
9
2.1 Stakeholder Theory………………………………………….
9
ix
2.2 Corporate Social Responsibility……………………………..
10
2.3 Disclosure……………………………………………………
10
2.3.1 Definition of Disclosure……………………………
10
2.3.2 Level of Disclosure………………………………...
12
2.3.3 Type of Disclosure…………………………………
12
2.3.4 Corporate Social Responsibility Disclosure……….
13
2.4 Information Asymmetries……………………………………
13
2.5 Earnings Quality……………………………………………..
14
2.6 Positive Accounting Theory…………………………………
15
2.7 Earnings Management……………………………………….
16
2.8 Previous Research…………………………………………...
17
2.9 Hypothesis Development……………………………………
20
CHAPTER III: RESEARCH METHODOLOGY…………………….
23
3.1 Type of Research……………………………………………
23
3.2 Population and Sample………………………………………
23
3.3 Type and Data Collection Method………………………….
24
3.4 Definition and Measurement of Variables……...…………...
24
3.4.1 Independent Variable………..…………………….
24
3.4.2 Dependent Variable……...………………………...
25
3.4.3 Control Variable…………………………………...
26
x
3.5 Empirical Model…………………………………………….
29
3.6 Normality Test………………………………………………
30
3.7 Classical Assumption test…………………………………...
30
3.7.1 Multicollinearity Test……………………………..
30
3.7.2 Heterokedasticity Test…………………………….
30
3.7.3 Autocorrelation Test………………………………
31
3.8 Hypothesis Testing…………………………………………..
31
3.8.1 R2 Test…………………………………………….
32
3.8.2 F-test………………………………………………
32
3.8.3 T-test………………………………………………
33
CHAPTER IV: DATA ANALYSIS AND DISCUSSION…………….
34
4.1 Sample Selection……………………………………………
34
4.2 Descriptive Statistics Test…………………………………..
34
4.3 Normality Test………………………………………………
36
4.4 Result of Classical Assumption Test………………………..
37
4.4.1 Multicollinearity Test……………………………..
37
4.4.2 Heteroscedasticity Test…………………………….
38
4.4.3 Autocorrelation Test……………………………….
38
4.5 Hypothesis Testing…………………………………………..
39
4.6 Discussion……………………………………………………
41
xi
CHAPTER V: CONCLUSION AND SUGGESTION…………………
44
5.1 Conclusion…………………………………………………...
44
5.2 Research Limitation and Suggestion…………………………
44
REFERENCES…………………………………………………………… 45
xii
LIST OF TABLES
Table 4.1 Sample Selection…………………………………………….
34
Table 4.2 Descriptive Statistics………………………………………...
35
Table 4.4 Correlation Matrix Table…………………………………….
37
Table 4.5 White Heteroscedasticity Tests………………………………
38
Table 4.6 Breusch-Godfrey Test………………………………………..
38
Table 4.7 Hypothesis Testing…………………………………………...
39
Table 4.8 Hypothesis Testing Result of New Model…………………...
40
xiii
LIST OF PICTURE
Picture 4.3 Jarque-Bera Test……………………………………………
xiv
36
LIST OF APPENDIXES
APPENDIX I: List Items of Voluntary Disclosure of Corporate Social
Responsibility
APPENDIX II: List Items of Mandatory Disclosure of Corporate Social
Responsibility from (BAPEPAM-LK) No.KEP-431/BL/2012 Point 2.h.1
APPENDIX III: List of Mining Companies 2012-2014
APPENDIX IV: Test Results for the New Model
APPENDIX V: List of Data Collection for Regression
xv