Financial Reporting via the Internet

Oct 13, 2025 by magicalceylontours.com 3 views

Effect of Family Ownership, Internet Financial Reporting, and Voluntary Disclosure on Information Asymmetry in the Indonesian Stock Exchange Manufacturing Industry

Introduction

The Indonesian Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a significant number of manufacturing companies listed on it. However, the manufacturing industry in Indonesia is characterized by a high level of information asymmetry, which can lead to market inefficiencies and poor investment decisions. Information asymmetry refers to the unequal distribution of information between companies and investors, which can create an uneven playing field in the market. This study aims to analyze the effect of family ownership, internet financial reporting, and voluntary disclosure on information asymmetry in the manufacturing industry listed on the IDX.

Literature Review

Previous studies have shown that family ownership, internet financial reporting, and voluntary disclosure can have a significant impact on information asymmetry. Family ownership can lead to information asymmetry due to the tendency of family owners to be less transparent in providing information to the public. Internet financial reporting can reduce information asymmetry by providing transparent and easily accessible financial information online. Voluntary disclosure can also reduce information asymmetry by providing additional information that is not required by regulations.

Methodology

This study uses a quantitative approach with a sample of 64 companies selected through purposive sampling. The data is collected through documentation studies from the financial statements of each company and the company's website. The data analysis is carried out using a descriptive analysis method and multiple linear regression.

Results

The results of this study show that simultaneously, family ownership, internet financial reporting, and voluntary disclosure have no significant effect on information asymmetry. However, when viewed partially, there are some interesting findings:

Family Ownership

Proven to have a significant positive influence on information asymmetry. This can be interpreted that the greater the portion of family ownership in the company, the greater the potential for information asymmetry. This may be caused by the tendency of family owners not to be fully open in providing information to the public.

Financial Reporting via the Internet

Has a significant negative influence on information asymmetry. This shows that with transparent and easily accessible financial reporting online, companies can reduce the uncertainty of information in the eyes of stakeholders.

Voluntary Disclosure

Also has a significant negative effect on information asymmetry. Disclosure of additional information that is not required by regulations can help investors and other stakeholders in making more appropriate decisions and minimizing information asymmetry.

Volatility of Stock Returns

Proven to have a significant positive influence on information asymmetry. High volatility can show uncertainty in the market, which in turn can create information gaps between companies and investors.

Company Size

A significant negative effect on information asymmetry. Larger companies tend to have more resources to provide clear information and can be accessed by the public.

Stock Price

Has a significant positive influence on information asymmetry. The increase in stock prices can create diverse perceptions among investors, thereby increasing the dimensions of complexity in access to information.

Conclusion

This study emphasizes the importance of transparency in financial reporting and disclosure of relevant information in reducing information asymmetry in the market. The results of this study show that family ownership, internet financial reporting, and voluntary disclosure can have a significant impact on information asymmetry. However, the effect of these variables is not uniform and depends on the specific context of the company. Therefore, companies listed on the IDX should prioritize transparency in financial reporting and disclosure of relevant information to reduce information asymmetry and create a more efficient market.

Recommendations

Based on the findings of this study, the following recommendations are made:

Companies listed on the IDX should prioritize transparency in financial reporting and disclosure of relevant information.
Family owners should be more open in providing information to the public.
Internet financial reporting should be made more accessible and transparent.
Voluntary disclosure should be encouraged to provide additional information that is not required by regulations.
Companies should be aware of the potential impact of high volatility on information asymmetry.
Larger companies should be more transparent in providing information to the public.
Investors should be aware of the potential impact of stock price on information asymmetry.

Limitations

This study has some limitations that should be noted. The sample size is relatively small, and the data is collected from a specific time period. Therefore, the results of this study may not be generalizable to other companies or time periods. Additionally, the study only examines the effect of family ownership, internet financial reporting, and voluntary disclosure on information asymmetry, and does not consider other potential factors that may influence information asymmetry.

Future Research

Future research should aim to examine the effect of other potential factors on information asymmetry, such as corporate governance, board composition, and executive compensation. Additionally, research should be conducted to examine the impact of information asymmetry on investment decisions and market efficiency.
Q&A: Effect of Family Ownership, Internet Financial Reporting, and Voluntary Disclosure on Information Asymmetry in the Indonesian Stock Exchange Manufacturing Industry

Q: What is information asymmetry, and why is it important to study it?

A: Information asymmetry refers to the unequal distribution of information between companies and investors, which can create an uneven playing field in the market. Studying information asymmetry is important because it can lead to market inefficiencies and poor investment decisions.

Q: What are the main factors that contribute to information asymmetry in the manufacturing industry?

A: The main factors that contribute to information asymmetry in the manufacturing industry are family ownership, internet financial reporting, and voluntary disclosure. These factors can affect the level of transparency and accessibility of information, which in turn can impact the level of information asymmetry.

Q: How does family ownership affect information asymmetry?

A: Family ownership can lead to information asymmetry due to the tendency of family owners to be less transparent in providing information to the public. This can create an uneven playing field in the market, where family-owned companies may have an advantage over non-family-owned companies.

Q: What is the impact of internet financial reporting on information asymmetry?

A: Internet financial reporting can reduce information asymmetry by providing transparent and easily accessible financial information online. This can help to level the playing field in the market, where all companies have equal access to information.

Q: How does voluntary disclosure affect information asymmetry?

A: Voluntary disclosure can also reduce information asymmetry by providing additional information that is not required by regulations. This can help to provide investors and other stakeholders with more accurate and complete information, which can reduce the level of information asymmetry.

Q: What is the impact of volatility of stock returns on information asymmetry?

A: Volatility of stock returns can increase information asymmetry by creating uncertainty in the market. This can lead to investors and other stakeholders having different perceptions of the company's performance, which can create an uneven playing field in the market.

Q: How does company size affect information asymmetry?

A: Company size can affect information asymmetry by providing larger companies with more resources to provide clear information and be accessed by the public. This can help to reduce the level of information asymmetry, as larger companies are more likely to be transparent and provide accurate information.

Q: What is the impact of stock price on information asymmetry?

A: Stock price can increase information asymmetry by creating diverse perceptions among investors, which can lead to an uneven playing field in the market. This can make it difficult for investors and other stakeholders to make informed decisions, as they may have different perceptions of the company's performance.

Q: What are the implications of this study for companies listed on the Indonesian Stock Exchange?

A: The implications of this study for companies listed on the Indonesian Stock Exchange are that they should prioritize transparency in financial reporting and disclosure of relevant information. This can help to reduce information asymmetry and create a more efficient market.

Q: What are the limitations of this study?

A: The limitations of this study are that the sample size is relatively small, and the data is collected from a specific time period. Therefore, the results of this study may not be generalizable to other companies or time periods.

Q: What are the future research directions for this study?

A: Future research directions for this study include examining the effect of other potential factors on information asymmetry, such as corporate governance, board composition, and executive compensation. Additionally, research should be conducted to examine the impact of information asymmetry on investment decisions and market efficiency.