Analysis of The Effect of Leverage, Company Size, And Sales Growth on the Quality of Financial Reports in the Transportation and Logistics Sector in Indonesia
Year: 2025
Type: article
Abstract: This study examines how leverage, company size, and sales growth affect the quality of financial reports among transportation and logistics companies listed on the Indonesia Stock Exchange (IDX) from 2020 to 2024. In an industry crucial to the national economy, the quality of financial reporting is a fundamental factor in investor and creditor decision-making. This research employs a quantitative approach with multiple linear regression on a sample of 8 companies, yielding 40 observations. Financial report quality is proxied by the absolute value of Discretionary Accruals (DA), calculated using the Modified Jones Model, with higher DA indicating lower quality. The findings show that: (1) leverage and sales growth negatively affect financial report quality (as indicated by a significant increase in DA), while (2) company size has a positive effect (as indicated by a decrease in DA). The model exhibits very high explanatory power, with an Adjusted R² of 98.6%, indicating that the three independent variables collectively account for 98.6% of the variance in financial report quality. These findings are highly pertinent for investors, highlighting the need for increased caution regarding companies with high leverage and growth, and for management, emphasizing the importance of strengthening governance and internal controls to uphold the integrity of financial reporting.
Institution: Pancasila University
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7117672425