International Journal of Accounting and Taxation

The Impact of Isak 29 on the Value Relevance of Accounting Information (Empirical Study on Mining Companies Listed on the Indonesia Stock Exchange 2013-2015) Elvian Galang Prabuwoso1, Bambang
Setyobudi Irianto, Laeli Budiarti

Abstract
The purpose of this study is to examine whether ISAK 29 has an impact on the value relevance of accounting information of mining companies listed on the Indonesia Stock Exchange. This study attempted to reveal market reaction to accounting standard policies changes, acertainaccounting numbers can reflect the information that investors use in assessing the value of corporate equity. Reduction phenomenon in market capitalization and stock index of mining sector coincided when ISAK 29 start to be effective, indicate the negative reaction to ISAK 29 implementation. This phenomenon is contrast with DSAK's goal of adopting IFRS, which is to improve the functioning of the global capital market by providing relevant, more comparable and high-quality information to investors. The population used in this study is mining company listed on the Indonesia Stock Exchange in 2013 and 2015. Total mining company listed on the Indonesia Stock Exchange is 41 companies. Sampling method to select the sample in this research is purposive sampling. The total sample of this study is 32 mining companies for each year in 2013 and 2015. This study used price test with valuation model, the results showed an increase in adjusted R2, indicate that the implementation of ISAK 29 in Indonesia has an effect of increasing the value relevance of accounting information. Therefore, there is an increase in the value relevance of accounting information of mining companies in Indonesia after implementation of ISAK 29. Chow test result showed that the F-stat value is greater than F-table, the test results indicate a structural changes of the valuation model that used to determine the value relevance of accounting information after the implementation of ISAK 29. In conclusion, implementation of ISAK 29 effected the structural changes in the form of value relevance differences.

Full Text: PDF     DOI: 10.15640/ijat.v5n2a4