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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Article
Audit Committee, Value Creation Efficiency and Capital Employed Efficiency
Author(s)
Fanny Soewignyo, Tonny Irianto Soewignyo
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DOI:10.17265/2328-2185/2018.01.002
Affiliation(s)
Universitas Klabat, Airmadidi, Manado, Indonesia
ABSTRACT
This study contributes a
number of innovative and interesting empirical findings with a view of four
audit committee characteristics to predict overall value creation efficiency
and capital employed efficiency using value added intellectual coefficient
(VAICTM) method. Using purposive sampling, 34 property, real estate, and building construction firms
listed on Indonesia Stock Exchange in 2011
were selected. Empirical findings could not provide a significant
relationship between audit committee characteristics and the overall value
creation efficiency as well as capital employed efficiency. This implies that
currently, the number of members, number of meetings, number of independent
commissioners, and accounting or finance expertise in audit committee cannot be
expected as drivers of business value
creation in Indonesian context, more specifically for property, real estate, and building construction industry. The overall lack of
significant relationships may potentially result from limited human capacity, lack of financial expertise, and inadequate
knowledge about the role of audit committee to add value to the
business.
KEYWORDS
audit committee, capital employed efficiency, VAICTM, value added intellectual coefficient, value creation efficiency
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