Corporate Governance Mechanisms and Dividend Policy: The Moderating Role of Disclosure Quality
DOI:
https://doi.org/10.47709/governors.v5i1.7841Keywords:
Audit Firm Size, Audit Tenure, Disclosure Quality, Dividend Policy, Managerial OwnershipAbstract
This study is to investigate corporate governance mechanisms, specifically audit firm size, audit duration, and managerial ownership, as well as dividend policy, with the disclosure quality serving as a moderating factor. For the years 2020 to 2024, about 65 companies data were obtained from the financial statements of trading companies that were listed on the Indonesia Stock Exchange (IDX). Audits were performed on each and every one of the utilized financial statements. The information was collected through the use of purposive sampling, and it was then processed using SPSS. Using Fixed Effect Model, while the other criteria did not have any significant link with dividend policy, the data suggested that the size of the audit business did have a positive and large correlation with dividend policy. The outcomes of the moderation analysis indicated that the quality of the disclosure was substantial and had the potential to improve upon earlier findings.
References
Almulhim, A. A. (2023). Effects of board characteristics on information asymmetry: Evidence from the alternative investment market. Heliyon, 9(6). https://doi.org/10.1016/j.heliyon.2023.e16510
Azekkar, Y., Boustta, O., Taghouti, Y., Abidar, B., & Ouafa, K. El. (2025). Dividend policy: A comprehensive analysis of classical, neoclassical, and modern theories in corporate finance. Multidisciplinary Reviews, 8(9), 2025301. https://doi.org/10.31893/multirev.2025301
Bhattacharya, S. (1979). Imperfect Information, Dividend Policy, and “The Bird in the Hand” Fallacy. The Bell Journal of Economics, 10(1), 259–270. https://doi.org/10.2307/3003330
Boateng, R. N., Tawiah, V., & Tackie, G. (2022). Corporate governance and voluntary disclosures in annual reports: a post-International Financial Reporting Standard adoption evidence from an emerging capital market. International Journal of Accounting and Information Management, 30(2), 252–276. https://doi.org/10.1108/IJAIM-10-2021-0220
Bushman, R. M., & Smith, A. J. (2001). Financial accounting information and corporate governance.
Journal of Accounting and Economics, 32(1), 237–333. https://doi.org/https://doi.org/10.1016/S0165-4101(01)00027-1
Carey, P., & Simnett, R. (2006). Audit Partner Tenure and Audit Quality. The Accounting Review, 81(3), 653–676. https://doi.org/10.2308/accr.2006.81.3.653
Chazi, A., Boubakri, N., & Zanella, F. (2011). Corporate dividend policy in practice: Evidence from an emerging market with a tax-free environment. Pacific-Basin Finance Journal, 19(2), 245–259. https://doi.org/https://doi.org/10.1016/j.pacfin.2010.11.001
Claessens, S., & Yurtoglu, B. B. (2013). Corporate governance in emerging markets: A survey.
Emerging Markets Review, 15, 1–33. https://doi.org/https://doi.org/10.1016/j.ememar.2012.03.002
Das Mohapatra, D., & Panda, P. (2022). Impact of corporate governance on dividend policy: A
systematic literature review of last two decades. In Cogent Business and Management (Vol. 9, Issue 1). Cogent OA. https://doi.org/10.1080/23311975.2022.2114308
Healy, P. M., & Palepu, K. G. (2001). Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. Journal of Accounting and Economics, 31(1), 405–440. https://doi.org/https://doi.org/10.1016/S0165-4101(01)00018-0
Helmiati, K., & Hernawati, R. I. (2025). Differentiation of Audit Quality Between Big 4 and Non-Big 4 Auditors. https://doi.org/10.70062/harmonieconomics.v2i4.379
International Monetary Fund. Monetary and Capital Markets Department. (2016). Corporate Governance, Investor Protection, and Financial Stability in Emerging Markets.
Jati, R. A. (2020). AUDIT TENURE DAN AUDITOR ROTATION: LITERATURE REVIEW. 5(2).
Jensen, M. C., & Meckling, W. H. (1976). THEORY OF THE FIRM: MANAGERIAL BEHAVIOR,
AGENCY COSTS AND OWNERSHIP STRUCTURE. In Journal of Financial Economics (Vol. 3). Q North-Holland Publishing Company.
Knechel, W. R., Krishnan, G. V., Pevzner, M., Shefchik, L., & Velury, U. (2012). Audit Quality: Insights from the Academic Literature.
Li, C. G., Dong, H. M., Chen, S., & Yang, Y. (2014). Working capital management, corporate performance, and strategic choices of the wholesale and retail industry in China. Scientific World Journal, 2014. https://doi.org/10.1155/2014/953945
Lin, D., & Lin, L. (2020). DOES CORPORATE GOVERNANCE AFFECT THE CRITICAL
CORPORATE POLICIES SUCH AS DIVIDEND POLICY? International Journal of Economics and Financial Issues, 10(6), 18–24. https://doi.org/10.32479/ijefi.10546
Mayangsari, R. D., & Sazangka, A. Y. (2023). Pengaruh Ukuran Kantor Akuntan Publik, Audit Tenure dan Spesialisasi Kantor Akuntan Publik Terhadap Kualitas Audit. Owner, 7(3), 2598–2611. https://doi.org/10.33395/owner.v7i3.1455
Mitton, T. (2004). Corporate governance and dividend policy in emerging markets. Emerging Markets Review, 5(4), 409–426. https://doi.org/https://doi.org/10.1016/j.ememar.2004.05.003
Naysilla Anastasia, P., Rahayu, M., & Ekonomi dan Bisnis, F. (2023). Kepemilikan Institusional, Kepemilikan Manajerial dan Ukuran Perusahaan terhadap Integritas Laporan Keuangan. https://doi.org/10.37817/ikraith-ekonomika.v6i3
Nwaeze, E. T. (2025). Auditors’ Life Cycle in Clients and Auditor Independence. Journal of Risk and Financial Management, 18(2). https://doi.org/10.3390/jrfm18020055
Peng, Y., & Li, W. (2025). Financial transparency and dividend policy: The moderating effect of analyst coverage. Finance Research Letters, 79, 107270. https://doi.org/https://doi.org/10.1016/j.frl.2025.107270
Rastogi, S., Pinto, G., Pathak, A. K., Singh, S. P., Sharma, A., Banerjee, S., Kanoujiya, J., & Tejasmayee, P. (2023). Influence of Transparency and Disclosures on the Dividend Distribution Decisions in the Firms: Do Profitability and Efficiency of Firms Matter? International Journal of Financial Studies, 11(4). https://doi.org/10.3390/ijfs11040142
Refakar, M., & Ravaonorohanta, N. (2020). The effectiveness of governance mechanisms in emerging markets: A review. Corporate Ownership and Control, 17(3), 8–26. https://doi.org/10.22495/cocv17i3art1
Rodrigues, R., Felício, J. A., & Matos, P. V. (2020). Corporate Governance and Dividend Policy in the Presence of Controlling Shareholders. Journal of Risk and Financial Management, 13(8). https://doi.org/10.3390/jrfm13080162
Rosliana Dewi, E., Rozak, D. A., Usmar, D., Galuh, U., & Kunci, K. (2019). Pengaruh Audit Tenure dan Struktur Corporate Governance Terhadap Integritas Laporan Keuangan (Vol. 1, Issue 1). https://jurnal.unigal.ac.id/index.php/akuntapedia/index
Tai, Y.-H. (2020). The relation between financial statement quality and dividend payout: The role of information asymmetry. In Corporate Management Review (Vol. 40, Issue 1).
Thanatawee, Y. (2011). Life-Cycle Theory and Free Cash Flow Hypothesis: Evidence from Dividend Policy in Thailand. International Journal of Financial Research, 2(2). https://doi.org/10.5430/ijfr.v2n2p52
Tiora, F. V. C., & Maisyarah, R. (2025). The Impact of Auditor Tenure on Auditor Independence and Objectivity in Indonesia.
Trinh, Q. D., Haddad, C., & Salameh, E. (2025). Do country institutions, banking system soundness and ownership structure influence the relationship between reporting quality and dividend payouts? Insights from Asian emerging markets. Asian Review of Accounting, 1–24. https://doi.org/10.1108/ARA-02-2025-0045
Trinh, Q. D., Haddad, C., & Tran, K. T. (2022). Financial reporting quality and dividend policy: New evidence from an international level. International Review of Financial Analysis, 80, 102026. https://doi.org/https://doi.org/10.1016/j.irfa.2022.102026
Verrecchia, R. E. (2001). Essays on disclosure. Journal of Accounting and Economics, 32(1), 97–180. https://doi.org/https://doi.org/10.1016/S0165-4101(01)00025-8
Zahid, R. M. A., Taran, A., Khan, M. K., & Chersan, I. C. (2023). ESG, dividend payout policy and the moderating role of audit quality: Empirical evidence from Western Europe. Borsa Istanbul Review, 23(2), 350–367. https://doi.org/10.1016/j.bir.2022.10.012
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Agustinus Winoto, Naila Erum
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
