The effect of audit committee characteristics on forward-looking disclosure

Abstract

Purpose

This study aims to examine the effect of the audit committee characteristics on forward-looking disclosure.

Design/methodology/approach

The characteristics of audit committee that examined are audit committee expertise, audit committee meeting frequency and audit committee size. To measure the extent of forward-looking disclosure, this study did content analysis using a checklist of 22 forward-looking items. The samples of this research are 285 non-financial firms listed on the Indonesia Stock Exchange in the year 2015. Ordinary least square regression is used for hypotheses testing.

Findings

The results of this study show that the audit committee accounting expertise, audit committee financial expertise, the frequency of audit committee meetings and the size of the audit committee have a significant positive effect on the forward-looking disclosure.

Originality/value

To the best of the authors’ knowledge, this is the first study examining the audit committee characteristics on forward-looking disclosure in the context of Indonesia, one of the emerging markets.

Citation

Rifai, M. and Siregar, S.V. (2021), "The effect of audit committee characteristics on forward-looking disclosure", Journal of Financial Reporting and Accounting, Vol. 19 No. 5, pp. 689-706. https://doi.org/10.1108/JFRA-05-2019-0063