Exploration Disclosures of Internal Control as the Impact of Earnings Quality and Audit Committee
Information disclosure carried out by management as an appointed agent is increasing in importance and hence, a source of concerns to users. It is widely believed that information received by the stakeholders should be appropriate and sufficient for useful decision making, especially in the era of the Fourth industrial revolution. An appropriate and sufficient disclosure in the Annual report indicates a reflection of the effective implementation of the company's operational, strategic, financial and compliance objectives that have been carried out by the management. This study employed secondary data obtained from the annual report for the banks listed in the Indonesia Stock Exchange (IDX). The data for internal control disclosure was observed through a content analysis approach by calculating the internal control system index obtained in the annual report. This study has shown that companies with high earnings quality report more openly convey the application of internal controls system disclosure. This study demonstrated that company with the high characteristics of the audit committee would significantly increase disclosure of internal controls system than a company without audit committee. Supervision, as one of the internal controls established by the management, enhances the performances of the audit committee in ensuring compliance through full disclosure of the financial statements. Thus, restoring users’ trust and confidence in making informed and useful decisions on information emanating from the management.
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