PEGARUH MEKANISME GOOD CORPORATE GOVERNANCE TERHADAP KINERJA KEUANGAN

Abstract

The research aimed to examine the effect of the mechanism of Good Corporate Governance (commissioner board, institutional ownership, audit quality, audit committee) an financial performance, which is referred to as Return On Assets (ROA) of Manufacturing companies listed on the Indonesia Stock Exchange (IDX) 2017-2020. The research was quantitative with multiple linear regression as a data analysis technique. Moreover, the population was 200 manufacturinng companies. Furthermore, the data collection technique used purposive sampling. In line with that, there were 41 samples of companies during four years (2017-2020), tehere were 164 samples research. The research result concluded that (1) the commissioner board affected financial performance (ROA). The board could increase profits by limiting the profit management level through the financial reporting monitoring function. (2) institutional ownership affected ROA. The investor could reduce agency cost from its agent cause and increase financial performance. (3) audit quality did not affect financial performance. The ethics standard, which ruled audit quality, had given one standard for all KAP (big four or non big four). (4) audit committee did not affect ROA. The committee was overlapping as an excternal audited and gived advice.