Influence of Financial Reporting Quality about Financing and Investment

Abstract

This paper analyzes the effect of reporting quality on financing and investment. It is important for us to understand the relationship between them in order to prepare Indonesian companies for the ASEAN Economic Community. This study examines the effect of financial reporting quality on the financing and investment of 15 large market capitalized Indonesian companies based on Standard & Poor's Rating Services in its first survey of major corporate credit trends at the Association of Southeast Asian Nations (ASEAN). Those companies may still be underinvested in relation to their regional counterparts. The results showed that (1) the quality of financial reporting has a negative effect on financing.