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The Role of Corporate Governance on the Effect of State Ownership on Audit Findings at State-Owned Enterprises

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  • A.C. Furqan
  • M.I. Abdullah
  • M. Iqbal
  • R. Masdar

Abstract

This study aims to analyze the extent to which the mediating role of corporate governance on the influence of state ownership on audit findings issued by Audit Board of the Republic of Indonesia on State-Owned Enterprises in Indonesia. The study used a sample of 98 observations (firm-year) during the period of 2010-2014. The results indicate that directly in line with predictions, there is a positive influence of the degree of state ownership on audit findings, and it is found that the level of state ownership has an indirect and negative effect on the governance of state enterprises, resulting in a negative impact of corporate governance on the audit. The results of this study imply that in order to reduce the potential for audit findings, the steps that need to be taken by the government gradually are to reduce the state ownership portion of SOEs, especially by privatization through stock offerings on the capital market and encouraging the implementation good governance in SOEs.

Suggested Citation

  • A.C. Furqan & M.I. Abdullah & M. Iqbal & R. Masdar, 2018. "The Role of Corporate Governance on the Effect of State Ownership on Audit Findings at State-Owned Enterprises," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 218-229.
    • Handle: RePEc:ers:journl:v:xxi:y:2018:i:3:p:218-229
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    References listed on IDEAS

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    1. Roderikus Agus Trihatmoko & Yuvensius Sri Susilo, 2024. "Natural resource governance and strategic economic resources: The perspective of Indonesia Raya Incorporated," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.

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