Characteristics of the company can explain the wide variation of disclosures in the financial statements, the characteristics of the company is a predictor of the quality of disclosure. Each company has different characteristics of the entity with other entities.
Lang and Lundholm (1994) in Subiyantoro (1996: 3) says in the context of the characteristics of the company's financial statements divide into three categories namely variable structure (structure related variables) include the size of the company and the ability to repay the debts.
The second is the performance variable (performance related variables) includes the company's liquidity and profit. The latter is a variable market (market related variables) seen from the stock portion, the age of the company, and the status of the company and the type of industry.
Vendor characteristics are matters relating to the internal condition of the company, which includes conditions of management, organization, human resources and finance companies are reflected in the performance of the company ".
Thus it can be understood that the characteristics of the company is everything related to the company's internal conditions that can affect the condition of the company. Characteristics of the company include:
a. the ability of management to manage operations
b. the company's ability to generate profits
c. benefits to the national economy
As a means of accountability, disclosure of financial statements should have the quality. The high quality of financial reporting is closely related to the completeness of the disclosure of the financial statements. While the completeness of the disclosure of financial statements is influenced by the characteristics of a company. In this study, the characteristics of the company is reflected in the size of the company, profitability, liquidity, leverage and public shares.
a. Company Size
The size of the company is a company in relation to the characteristics of the corporate structure. The size of the company described the size of the company indicated by total assets, sales and market capitalization. The greater the total assets, sales and market capitalization, the greater the size of a company. The greater the assets, the greater the capital invested, the more sales, the more the greater the velocity of money and market capitalization. Of the three variables, the researchers used a variable measuring the size of the total assets in the asset value of the company because of the relatively more stable compared to the sales and market capitalization.
The size of the company can be classified into three types: small, medium and large enterprises. Based on the Regulation of the Minister of Trade of the Republic of Indonesia No. 46 / M-DAG / PER / 9/2009
University of North Sumatra
on amendments to the regulations of the Republic of Indonesia No. trade minister 36 / M-DAG / PER / 9/2007 concerning the issuance of trade license, article 3 of the grouping size companies on:
1) a small company, a company that has assets of more than Rp. 50.000.000, - (fifty million dollars) up to a maximum of Rp. 500.000.000, - (five hundred million rupiah) not including land and buildings.
2) medium-sized companies are companies with assets of more than Rp. 500.000.000, - (five hundred million rupiah) up to a maximum of Rp. 10,000,000,000, - (ten billion dollars), excluding land and buildings.
3) a large company, a company that has assets of more than Rp. 10,000,000,000, - (ten billion dollars), excluding land and buildings.
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