Last modified: 2017-07-01
Abstract
The purpose of this study is to provide empirical evidence in Indonesia regarding the value relevance of related party’s transactions (“RPT”) disclosure, the moderating effect of auditor (audit quality) on the value relevance of RPT disclosure, and the moderating effect of financial analysts (analyst coverage) on the value relevance of RPT disclosure. We measure the audit quality by using a comprehensive measurement, which include Big 4 and four auditor industry specialist criteria.
We found that the disclosure of RPT, whether RPT included in the asset group (RPTA) or in the liability group (RPTL), has value relevance. However, this study has not been able to provide evidence of auditor’s moderating effect on the value relevance of RPT disclosure. Regarding moderating effect of the financial analysts (analyst coverage), this study has only found a partial support, that the financial analyst moderating the value relevance of RPTA disclosure, but not moderating RPTL disclosure.