THE INFLUENCE OF BOARD OF COMMISSIONERS' CHARACTERISTICS ON EARNING MANAGEMENT (The Case of Banking Company Listed in Jakarta Stock Exchange).

FACULT) OI t'-(-ONONIICS
ANDAL:\S UNI! ERSITY
TIlESIS
THE INILLDNCIl OI' BOAIID OI CO}lMISSIONERS'
CIIAtlr\CTERISTICS ON IIARNINC \'1'\NAGEll!lNT
llhc.ne ofBankng Co,4 1! I'ittttl i lrko o Sb'^ t'(hnn?!)

tlB'1
BP.04 I 5-l l)s5

Accol- l{'tlNc DIltAlt f \{Dl{T
SulJnirtal nr Dirtiil lullillDcnr ol !ht rtqtrircm
Undcrg'iduxk DcSrtc i li.onomics

t.\D.\\C
l0lrlJ

ABSTL'ICI'

obrL-6 about the iallu.nu ol B.atd ol aonn^:ion!^
thatucleians lrrh u!, R.utLt ofo)nnhtionos !n., unpositbn,4d annual

Th6 ltudy

heetihgahthe

eiu

ednih$

ahatenekt ptattirc in public bankcanpahic! lhtel ih

in

2AU-2005 Resull lhne thut Raunl of
(\)nn^!n,ner! tiz! ha! neg itu ienltunt i4rcnu oh {thihg dt,aao)enl in
bakkihs canp.hr d! a ||hol. ohd ih ldall onpun!, Botrd oJ Conhksiohe^

ln lo

Stock Exchanse

a)nryit@n

i

tnsiEnilcanlr nllucnciry the ..tning nturuEenent in all
cohdnhn!an.t B.ait 4 hnnilsihet: ann,al neetihshas s;gnifiLdnt neEalrta

ikiud.e

to

edkiq

hahatenent as a whole

hu1

,.fond

to bc in\jshilcah!

hig otut snLtt Lonpary Thla ralnLs nean that bodtul af

k

cohhilsj.n*s fund i.n
in .,itatina a d sqereii,E the eflicieaq oJ hdnuslnent does nor hdrt biq
inJlrcace or edrning anaEenent ,tdctice d.h. bJ hanking conpan! lkted in
I ntlohe ! id

Sh. k *t

Keyeo/d:

Aoaldofc. nislbket: Cha ttletistic,

hahge

LarhikEManuEene

l

CHATTDR

Financial reponing

I

h th. sar ro c.nnu.icrte

wnh padl

.utidc

rh€

corpoEle aboullhe accountins inlarmlton AccountiDs inlormatior isone $nrce

oli'rtonnltion that

is

!!ailahle

Jar

investrs a.d credllo6 to cvahrarc mana8crs

.mcicncr in manasi4 lheir frrnd (Setiaqali and Na nn 2001). ln
linancial r.pon. a.crual basis is

chos

sincc

ddsins

it is norc nlional

and

lhc

lat

in

rcllccrins c.mpany's lindcialcondition. llo{cvcr. lh. usc olac(ualbasis coDld

gile a lieedonr r) m.agcncnl

iD choosing a.counling

nelh.d rs ldng

$ n.l

dcvialc fronr approred accounlins slandads Accoun ie mclhod h cho*n b]

namgcmcdl for cdlanr objcclive This is known as caning fra.asctucnr whi.h

crn crtlre unrliablc iilornmlion.

ln Agcncr rheo.l.lhc

rcLdlnrn

olrgenc!.ccur $hen rhere

is one

or.rore

neople (principal) hired othcr pcople (ascnt) ro give seNices rhen delegare the

aulh.rit) to nrlc dccision lo the
superui$r
prcspecr

i.

a8eDt

(leNen and Mc.klnrs 1976). Mamg(

ol the cdfrtbr_ kn.Rs $e imefral

as

inlarmation and comnant

r

the nfure more lhan the shareholdes lhal is Nhy. naMscr has lo

Ei\r a sisml

about

llc

condition of lhc

conDd! ro thc oMcr.

somclinic thc nrfomalion. $hich G Eponed, is nor ac.uralc

H.wcver.

wi$ $c

ical

condirion. Thh conditioD is knoM 15 inlomarbn A]nrmelry (lJais 2004). The

r\tmnetry krween!n

agenr

Nd principJ could

Edning namecncnl pncticc

oNc wcllrcsFccicd
lnd.ncsia
lindocial

h6

gile.

chancc lor mna8cr to do

bccn cr.dcd

i,mc

scandals

comparies such as [Dron. wordlcon]

inlolling

ard xoox.

tlrrc sas fimncial s.ndal in public .onp y qni.h is

lD

inlolved

ldlcncnl naniFulalion b] Pl Lippo lbk a.d Pl Kinia Frnd

lbl

iBoediono 2005). One orthe rearon\ Rhy rbis snudion is slill exisls because rhe

hck ol cdr0ontc g.vcnnncc pracliccs inpLcncnlalnr thc dccisi.n ddking

d i

d(.er..: .r.l .
lndoncsia is weal

(Alijolo

'f1'

d .J'r''Jr

1"..

t. rt d \rnr'.1

'

100.1)

Corp.nte aoremrncc is a c.ncepl ro incEase conpan) perlomance
thrcugh $rperlisnrg

or noniro.iog

managemenl perfonmnce

madagcmcfl accounl.bilit] 10 stakeholdd bascd on
oblcclivc

of

the uscs

ol linrn.dl salcncnt. llthc

.nd

guardnlee

rulcs namcwork. lhc

ris coDcepl is lo rchieve a company managenrm ttuispdcncy loL
company coul,t intletoenr this concetr s)

o

the econo.ric\ gourh could kccp

Aoing Lvcll logcrhcr

rilh

conTan)

nanagcnie nansparency rhrrisal$ going $€lllnd give benefit for maryside.
Corporxre govcmrnce \yslc.r

gi!.s

h

clleclive proreclion

shkcholdcr and credn.r so thcy arc surc to ecr
iDre$meDt. Corporate soremlnce

rl$

e

10

conrpan) s

atprotridte rcrum ln,m the;

helps to makc conducnc cDlironrncnl for

crcatirs an cficicnt .nd sustainable sroMh in coqnrare secktr coryxnte
go\rman.e dcfincd as a sel of rule vhi.h dctfmine the relario.ship ber*een

CHAPTDR V

The purlos€ of

$is rcscdch is

influences: Board ol C.hnissioncs'
compositioD (BoCComr) and

cein8

1o .bsenc lhc

sih (Bocsi?€), Rosd

B.dd oi

o

h 200i

The conclusion based on h$olhesis

l:

ConnissioneE

da1a. Ihe results

Ming

conp ylisledin

olhypothcsn Iesl

te{ n:

lhere is sisnificant posilive influencc
siz-e on

r Connissio.ers'

2005. Tbh rescdch use sirc ofcomFany as

contolli.g vdiablc lo avoid bias h an lyziq

Hypolhcsis

nechanlsm

commissioners lnnual neernrg on

nanagenrent. Tie lDpulatio. ol lhis re€dch is banhina

lndoncsia Slock Lxcha4e

l.

cor]Iure

of dE Bodd of

manasenent

Ftun th€ hytorhesis lc$, thc sienificant laluc ol Rord olConmissionen
sia (BoCSire) in alphalerel is0.004 < 00s (q).

co

usion:

tun

hypothesis

(HI) is ftjecled, which ls

there is neaative

sienificanl rclalioNhip belween Bodd of Colmissioners' size al]d cdnnrs

2

HrTmhcsis

2i thdc G a

sbnincant nqalivc inlluence

or Bord

o1'

Comissioners comFsiti.n.n etnins mlnagenrent.
Fron $e hypothesis test. the sisnificanl valuc ol Board ofconnrissioneE
conrposillon inalph, !ev€l(d) 0.05 is0 304 > 0 05 (d)

Ref€.€nres

Asltual, Sunn!.. Chonshensphel. Soupala, Liu, Chunlin.. ard }iI... C S 200-r
Ldnine ManaEcrncnl Duing Di(incr Pe ons ofcapnal Demand: Eridenc.
lom Japancsc Bank. 1nlp//wwrv.ssm com
Anandanjan. Asokan.. Ilen, lneHrd .nd McCa h!. corenelia 1005 The IJ\e
oflo& Loss Provisions lor l]drnrgs. c,rilll Nlanagenrenl and Signallin-!
by usra jian Banks,bnpl&$v.ssm.c!E

Boedi.no Gidc.n SB ?005 Kuilira\ Laba: Studt tcngduh Mckanhm.
Coeorare Govemlnce dan Danpak Manajcnen Llba Dengan
M€nggln.kan Anrl$is

jllur ,SIIMIl

Solo

I5

16

Septlnhet 20A5

Bank lndonesi l99A Srrur Klfuruatn Dh.ksi Bdhk lhl.nelju i\io
31.113/KLP/DIR tcnl 3 tunb."tutth t',tnyi:jhun P{nEhdpu\dn Aktiv
Cor0eq M.M., McNult. LJ lnd Tehrafiln, llasan. 2006. corFome (;ovetu.cc

md

Larning Uamacme.r

hllp://w

ar Largc Bmk Holdi.g

Companies.

svn.con.

ChtoLro. S.M., Bedard. Jcan and Councau. l-ucie. 2001. Coryoratc Co!$mncc
a.d Elming Manlgeme.t hrlo:tq11v.sr. con

H.llingswonh (lW hd Klei., April 2006. Audir Comtui!€e
Financi.l Fxpenisd. Conpering Govemancc Mcchanisn and Eming

Cdrc€lb.

JV.

Mana8emenl hlip:1,'sr1v.ssm com

rolm

lor coipontc co!cmancc in l.don.sia.2006. hupt$$y.fcsi.or.id

Hcal!, P.M. dd WahlcD. LM 1999. Rcrisw ot the Eamings Mamecned
L ncdurc ed lts lnplicalions for Stadard Setri.A h(p:r$$$ ssm.com
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N,lanagementsA Descriptivc Study.

hllpt/rrN.$m.com.
lndonesla.1001. Ltddrg-Urdd,A No. 40 falun 2007
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PustojnTtthalat

$sv.idrco id

JcBcn M.C. and jvlccklnr8. W.H. ]976. lhcoD ol The rnm:
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http:l*w

ManaeemeDt

s$n.conl

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Eaminlr Mlnlgement hup://$**.$rn.con)

ed