11 making.
The separation of ownership and control has led to notorious agency problem. The agency problem was first explored in Ross
1973, with the first detail theoretical exposition of agency theory presented in Jensen and Meckling 1976.
Delves and Patrick 2008 argued that the issue arises from particularly dilemma when the principal and agent while nominally
working toward the same goal may not always share the same interests. While Brennan 1995 explained that the agency problems
happen due to the impossibility of perfectly contracting for every possible action of an agent whose decisions can affect both his own
welfare and the principal welfare. The problem is arising, how to induce the agent to act for the best interests of the principal. Managers
bear the entire cost of failing to pursue their own goals, but capture only a fraction of the benefits. Jensen and Meckling 1976 argue that
this inefficiency is reduced as managerial incentives to take value- maximizing decisions are increased.
2. Compliance Theory
According to the General Dictionary Indonesian compliance comes from the word obey. Obey means love, obedience to orders or rules
and discipline. Compliance means to be submissive, obedient, and obedient to the teachings or rules.
Compliance Theory has been studied in the social sciences,
12 especially in psychology and sociology with emphasis on the
importance of the socialization process in influencing the compliance behavior of an individual Sulistyo 2010. According to Saleh and
Susilowati 2004 in Sulistyo 2010 there are two basic perspectives on law compliance in the instrumental and normative. Instrumental
perspective assumes the individual as a whole is driven by self-interest and responses to changing incentives, and penalties associated with
the behavior. Normative Perspectives in touch with what people consider being moral and contrary to their personal interests.
An individual tends to obey the laws that they deem appropriate and consistent with the internal norms. Normative commitment
through morality means obeying law because the law is regarded as a necessity, whereas normative commitment legitimacy through means
comply with the authorities making up the law has the right to dictate behavior Sudaryanti 2008 in Sulistyo 2010.
Compliance theory can lead people better to comply with current regulations, as well as companies are trying to submit financial report
on time because in addition to being a companys obligation to submit financial report on time, will also be very beneficial for the users of
financial report. Requirement for compliance with timeliness in the submission of
the annual financial report of public companies in Indonesia have been set by Bapepam Regulation No. X.K.6, through Decree No. Kep-
