The companies information in the financial statements is used as a reference by investors to assess corporate risk and investment decision making. Investors will demand a high level of cost of debt if the risk is higher.This study aims to investigate the influence of accounting information quality and the characteristics of the board of directors that is viewed through the report of directors in the form of narrative in the annual report of the company. The sample is 106 non-financial companies listed on the Indonesia Stock Exchange from 2014-2015. This research use mixed method in terms of data collection. The quantitative datas from annual report and qualitative datas in the form of company director's report. The datas analysis is quantitative content analysis. The results of this study show that the quality of accounting information measured by earnings income has a significant negative effect on the cost of debt but if measured by earnings predictability does not affect the cost of debt. In addition, the report of directors in the form of narrative has a significant positive effect on cost of debt. These results indicate that the cost of debt is not only influenced by the figures in the financial statements but also influenced by non-accounting factors are the characteristics of the board of directors reflected in the report of directors in the annual report.

Type of Paper: Empirical

Keywords: accounting information quality, board narrative disclosure, cost of debt, mixed method