The Influence of Independent Commissioners, Auditor’s Reputation and Risk Management Committees on Disclosure of Enterprise Risk Management

Abstract

The purpose of this empirical study on manufacturing companies listed in Indonesia Stock Exchange period 2014-206 is to examine the influence of independent commissioners, auditor reputation and risk management committees on enterprise risk management (ERM) disclosure. This research used literature and observation study as the research object. In this frame, the research object used is manufacturing sector companies listed on the Indonesia Stock Exchange with observation years 2014 up to 2016. Research data were analyzed using SPSS software with multiple linear regression analysis method. The result of the research indicates that the auditor reputation has a positive effect on ERM disclosure, while the independent commissioner negatively affects the ERM disclosure and the risk management committee do not affect ERM disclosure. However, simultaneous testing results in the fact that independent commissioners, auditor reputation and risk management committees together have an impact on ERM disclosure. From this research, it can be concluded that in the company of manufacturing sector, auditor reputation gives a positive effect for better ERM disclosure.

Keywords: auditor reputation, corporate governance, COSO ERM Framework, Enterprise Risk Management (ERM), independent commissioners, multiple regression analysis, risk management committee.