THE EFFECT OF CORPORATE GOVERNANCE MECHANISMS, AUDITOR INDEPENDENCE, AND AUDIT QUALITY TO INTEGRITY OF FINANCIAL STATEMENTS

Abstract

This study aims to analyze and prove the effect of corporate governance mechanisms proxied by institutional ownership, managerial ownership, audit committee, number of boards of directors, and independent commissioners, auditor independence, and audit quality to financial statement integrity. The population used in this study is all manufacturing companies listed on the BEI period 2012-2015. The number of samples determined by purposive sampling technique amounted to 75 companies. Data were analyzed by using multiple linear regression. The results show that corporate governance mechanisms proxied by institutional ownership, managerial ownership, audit committees, number of boards of directors and independent commissioners jointly affect the integrity of financial statements. While partially not all proxy of corporate mechanism affect the integrity of financial statements. The independence of auditors does not affect the integrity of financial statements and audit quality positively affects the integrity of financial statements.