International Journal of Education.
Social Studies.
And Management (IJESSM) e-ISSN : 2775-4154 Volume 5.
Issue 2.
June 2025 The International Journal of Education.
Social Studies, and Management (IJESSM) is published 3 times a year (February.
Juny.
Novembe.
Focus : Education.
Social.
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Management, and Culture.
LINK : http://lpipublishing.
com/index.
php/ijessm The Influence of the Audit Committee and Company Age on the Financial Report Quality of Energy Sector Companies Listed on the Indonesia Stock Exchange Indrawati Hintalo1.
Onong Junus2.
Novaliastuti Masiaga3.
Olfin Ishak4 1,2,3,4 Universitas Gorontalo.
Indonesia
ARTICLE INFO
Article history:
Received 15 March 2025 Revised 25 April 2025 Accepted 01 Mei 2025 Keywords Corresponding Author :
ABSTRACT
This study aimed to analyze the effect of the audit committee and company age on the quality of financial statements in energy sector companies listed on the Indonesia Stock Exchange (IDX).
The research sample consisted of 15 companies selected using purposive sampling method based on certain criteria, such as being listed on the IDX main board, having annual financial reports during the 2017-2022 period, and reporting positive profits.
The method used in this research is a quantitative approach with multiple linear regression analysis used to test the hypothesis.
The results showed that the audit committee had no significant effect on the quality of financial statements, while the age of the company had a negative effect.
This finding indicates that the longer the company operates, the possibility of declining financial statement quality, which can be caused by factors such as suboptimal accounting practices or a decrease in the effectiveness of corporate Therefore, stricter oversight is needed to ensure transparency and accountability of financial statements in the energy Audit Committee.
Company Age.
Financial Statement Quality.
onong_junus@unigo.
INTRODUCTION
The quality of financial reports plays a crucial role in the business world as it reflects a company's performance and financial position.
Yuliana & Gunawan, .
Emphasizing that good earnings quality is a key indicator in financial reports, reflecting a company's stability and sustainability.
Besides earnings, the audit opinion from an external auditor also serves as a determining factor in investor and creditor trust in financial reports (Pratiwi et , 2.
Company value is closely related to the quality of earnings generated.
Wibowo & Permatasari, .
It was found that companies with stable earnings tend to have higher value, attracting investor interest.
Arifin & Dewi, .
Adding that stock prices, as a performance indicator, often reflect International Journal of Education.
Social Studies.
And Management (IJESSM) Volume 5.
Issue 2.
June 2025 Page 568-577 investor confidence in a company's financial reports.
According to Pratiwi et al.
Stock prices are more stable in companies with an unqualified audit opinion and high-quality earnings.
Earnings quality is assessed through the sustainability and predictability of future income (Yuliana & Gunawan, 2.
The better the earnings quality, the higher the credibility of financial reports in investment decision-making.
Besides earnings, the audit opinion also plays a role in enhancing the quality of financial reports.
Wibowo & Permatasari, .
States that a good audit opinion increases investor confidence as it indicates reliable financial Arifin & Dewi, .
Emphasizes that financial report transparency can enhance public trust and the market value of a company.
In this context, the research.
Junus et al.
, .
findings reveal that the implementation of IFRSbased Financial Accounting Standard can suppress or reduce the earnings management done by the company in which the lower earnings management decreases, the better the earnings quality.
However, some studies indicate that high-quality earnings do not always have a direct impact on investor decisions.
External factors such as global market conditions and economic policies also influence investments, even when companies report stable earnings (Wibowo & Permatasari, 2.
Additionally, high earnings do not always align with an increase in company value in the long term.
The relationship between audit opinions and investment decisions is also debated.
Pratiwi et al.
, .
Argues that an unqualified audit opinion provides assurance of financial report reliability, but some investors place greater emphasis on other factors such as global economic conditions and market trends.
Arifin & Dewi, .
States that stock prices do not always move in line with financial report quality, as other factors may have a greater Besides the factors mentioned above, research Fitriana & Febrianto, .
Shows that company size and ownership structure also affect financial Larger companies have better access to capital and technology, which supports operational efficiency and the quality of financial reports.
In this context, research on the influence of the audit committee and company age on financial report quality becomes increasingly important.
Kusumastuti & Eri, .
Found that an active audit committee improves financial report quality, while company age plays a role in strengthening internal control systems.
However, other studies suggest that company age does not always have a significant impact on financial report quality due to industry factors and business complexity.
The energy sector faces significant challenges due to commodity price fluctuations and government regulations.
International Journal of Education.
Social Studies.
And Management (IJESSM) Volume 5.
Issue 2.
June 2025 Page 568-577 The profitability fluctuations of energy sector companies from 2017 to 2022 highlight the importance of financial report quality in providing transparent information to investors.
Therefore, factors such as the audit committee and company age become key aspects in ensuring reliable financial reports.
Based on this phenomenon, this study aims to analyze the influence of the audit committee and company age on the financial report quality of energy sector companies listed on the Indonesia Stock Exchange.
By understanding the factors affecting financial report quality, this research is expected to provide insights for investors, regulators, and academics in assessing the financial performance of energy sector companies.
RESEARCH METHOD
The population of this study consists of all energy sector companies listed on the Indonesia Stock Exchange (IDX), totaling 40 companies.
According to Wijaya, .
in Masiaga, .
, this approach allows researchers to evaluate the relationship between the independent variables, namely the audit committee and company age, with financial report quality, which is measured through earnings quality.
The analytical model used in this study is formulated as follows.
The first structure:
Y = a B1X1 B2X2 u Where :
= Financial Statement Quality X1 = Audit Committee X2 = Company Age
= Constant
B1B2 = The regression coefficient of each variable = Error Term
RESULT AND DISCUSSION
Normality Test Table 1.
Normality Test Results One-Sample Kolmogorov-Smirnov Test Unstandardized Residual Normal Parametersa,b Most Extreme Mean Std.
Deviation Absolute ,0000000 9,81759491 ,140 International Journal of Education.
Social Studies.
And Management (IJESSM) Volume 5.
Issue 2.
June 2025 Page 568-577 Differences Positive Negative ,140 -,087 1,327 ,059 Kolmogorov-Smirnov Z Asymp.
Sig.
-taile.
Source: Processed Data from SPSS, 2025 From Table 1, it can be seen that the data in the regression model is considered to be normally distributed, as the residual data value of 0.
059 is greater than 0.
Multicollinearity Test Table 2.
Multicollinearity Test Coefficientsa Standardize Unstandardize Collinearity d Coefficients Coefficients Statistics Std.
Toleranc Model Error Beta Sig.
VIF
(Constan.
15,024 5,255 2,859 ,005 Audit
,147
,126
,120 1,161 ,249
,993 1,007
Committe Company -,174 ,075 -,240 - ,023 ,993 1,007 Age
2,322
Dependent Variable: Financial Statement Quality Source: Processed Data from SPSS, 2025 With the results of the multicollinearity test in Table 2 of this study's data, it is found that the VIF value of 1.
007 < 10.
00 and the Tolerance value of 0.
Therefore, it can be concluded that the data in this study is free from Heteroscedasticity Test Table 3.
Heteroscedasticity Test Results Model (Constan.
Audit Committee Standardize Unstandardized Coefficients Coefficients Std.
Error
Beta
6,332
3,129
2,024
,085
,075
,120 1,133
Sig.
,046
,260
International Journal of Education.
Social Studies.
And Management (IJESSM) Volume 5.
Issue 2.
June 2025
Page 568-577
Comapany Age
-,055
,045
-,131
1,235
,220
Source: Processed Data from SPSS, 2025 Based on the test results in Table 3 above, it can be seen that the Audit Committee coefficient has a significance value of 0.
260, and the Company Age coefficient has a significance value of 0.
220, both of which are greater than 0.
This indicates that neither variable has a heteroscedasticity problem in the regression model.
Thus, the model meets the homoscedasticity assumption, meaning that the residual variance is constant and the regression model can be used for further analysis.
Statistical Descriptive Test Table 4.
Statistical Descriptive Test Std.
N Minimum Maximum Mean
Deviation Auit Committee 33,33 66,66 35,5520 8,36054 Company Age
28,90
14,077
Financial Statement
2,55
46,31 15,2056
10,21814
Quality Valid N .
Source: Processed Data from SPSS, 2025 Based on the descriptive statistical results, this study uses 90 samples.
The audit committee (X.
ranges from 33.
33% to 66.
66%, with an average of 35.
and a standard deviation of 8.
36, indicating small variations among companies.
Company age (X.
ranges from 10 to 62 years, with an average of 28.
90 years and a standard deviation of 14.
08, reflecting diversity in company age.
Financial report quality (Y) varies between 2.
55 and 46.
31, with an average of 15.
21 and a standard deviation of 10.
22, indicating significant differences that may be influenced by governance and accounting compliance.
Hypothesis Testing T-Test (Partial Tes.
Table 5.
T-Test Standardize Unstandardized Coefficients Coefficients Model Std.
Error Beta Sig.
(Constan.
15,024 5,255 2,859 ,005 Audit
,147
,126
,120 1,161
,249
Committee International Journal of Education.
Social Studies.
And Management (IJESSM) Volume 5.
Issue 2.
June 2025 Page 568-577 Company -,174 ,075 -,240 -2,322 ,023 Age Dependent Variable: Financial Statement Quality Source: Processed Data from SPSS, 2025 The T-test results show that the audit committee .
-value 1.
does not have a significant effect because the t-value is less than the t-table value .
Conversely, company age .
-value -2.
has a significant negative effect on the dependent variable, meaning that as the companyAos age increases, the dependent variable decreases.
Additionally, the constant .
-value 2.
indicates that the regression model is Overall, only company age has a significant effect, while the audit committee does not.
Test of the Coefficient of Determination (R Squar.
Table 6.
Test of the Coefficient of Determination Std.
Error Adjusted R of the Model Square Square Estimate ,277a ,077 ,056 9,92980 Source: Processed Data from SPSS, 2025 Based on the results of the R Square (Coefficient of Determinatio.
test, a value of 0.
077 or 7.
7% was obtained, meaning that the independent variables in this study can only explain 7.
7% of the changes in the dependent variable.
other words, the model used in this study is not strong in explaining the factors influencing the dependent variable, as the majority of the variation .
3%) is influenced by other factors not included in this model.
Multiple Linear Regression Analysis Table 7.
Multiple Linear Regression Test Results Standardize Unstandardized Coefficients Coefficients Model Std.
Error Beta Sig.
(Constan.
15,024 5,255 2,859 ,005 Komite ,147 ,126 ,120 1,161 ,249 Audit
Umur
-,174
,075
-,240
- ,023
Perusahaa
2,322
Source: Processed Data from SPSS, 2025 International Journal of Education.
Social Studies.
And Management (IJESSM) Volume 5.
Issue 2.
June 2025 Page 568-577 The constant of 15.
024 indicates that if the audit committee (X.
and company age (X.
are both zero, the dependent variable (Y) will have a value of The audit committee coefficient of 0.
120 suggests that each 1-unit increase in X1 will increase Y by 0.
120, assuming other variables remain Conversely, the company age coefficient of -0.
240 indicates a negative relationship, where each 1-unit increase in X2 will decrease Y by 0.
The standard error of 5.
255 reflects the degree of data variation around the regression line.
DISCUSSION
The Influence of the Audit Committee on Financial Report Quality The research results show that the audit committee (X.
does not have a significant effect on financial report quality (Y), with a significance value of 249 (>0.
, leading to the rejection of the research hypothesis.
These findings are consistent with the study conducted by Siregar, .
, which states that the effectiveness of the audit committee depends on its independence and supervisory function.
The data in Table 5.
1 shows that most companies have only one independent audit committee member, leading to a high potential for conflicts of interest and less effective oversight.
The lack of changes in the level of audit committee independence from 2017 to 2022 reflects minimal efforts to improve corporate governance.
Additionally, although PT Harum Energy Tbk (HRUM) has a higher level of independence .
66%), this does not automatically enhance the quality of financial reports, indicating that other factors such as audit committee competence and managerial pressure also play a role.
Research Wahyuningsih & Andraeny, .
Shows that audit committee meetings are often merely formalities without in-depth evaluation of financial reports, reducing the effectiveness of oversight.
Susanto & Wibowo, .
Also found that the low independence of the audit committee weakens oversight, resulting in no significant improvement in financial report quality.
Similar findings were stated by Nurjannah & Pratomo, .
and Amalia, .
Which indicates that the audit committee has no impact on the integrity of financial reports.
Wijayanti & Yuliana, .
Emphasizes that the effectiveness of the audit committee depends on other factors, such as the quality of external audits and shareholder pressure.
Hidayat, .
States that an audit committee that actively reviews financial reports and provides recommendations tends to enhance However, if its role is merely formal, the impact becomes Putra & Wati, .
Also found that the presence of an audit committee does not always determine the integrity of financial reports.
Thus.
International Journal of Education.
Social Studies.
And Management (IJESSM) Volume 5.
Issue 2.
June 2025 Page 568-577 low independence and the lack of an active role of the audit committee are the main factors that lead to no significant impact on financial report quality.
The Effect of Company Age on Financial Report Quality The company age variable has a regression coefficient of -0.
174 with a significance value of 0.
023, which is smaller than 0.
This indicates that company age has a significant impact on financial report quality, with a negative relationship.
The longer a company operates, the more its financial report quality tends to decline due to conservative accounting policies and increasing operational complexity, which can heighten the risk of errors or financial statement manipulation.
These findings are in line with the research of Putra & Rahayu, .
Which states that companies with a longer lifespan tend to experience a decline in financial report quality due to the pressure to maintain financial stability.
Scott, .
Also explains that the increasing operational complexity in older companies can reduce the efficiency of financial reporting.
Hidayat & Wicaksono, .
Found that older companies have a more complex organizational structure, which can slow responses to regulatory changes and increase the risk of financial reporting inaccuracies.
Rahman et al.
Found a negative and insignificant effect between company age and financial report quality, while Wijayanti & Saputra, .
States that older companies are more at risk of applying conservative accounting practices, which can reduce the relevance of financial information for investors.
Therefore, companies with a longer lifespan need to update their financial reporting policies to remain transparent and accurate.
CONCLUSION
The research results show that the audit committee does not have a significant impact on financial report quality.
This finding indicates that the mere presence of an audit committee is not sufficient to improve financial report quality without effective oversight supported by the other independence, competence, and the involvement of management and shareholders.
On hand, company age has a significant but negative effect on financial report quality.
This suggests that the longer a company operates, the lower its financial report quality tends to be.
This may be attributed to the pressure to maintain financial stability and investor appeal, increasing the risk of earnings management International Journal of Education.
Social Studies.
And Management (IJESSM) Volume 5.
Issue 2.
June 2025
Page 568-577
REFERENCES