Testing the Quality of Financial Reporting in Indonesia and Its Influence on Corporate Social Responsibility Investments

This study aims to examine the quality of financial reporting in Indonesia not only by using accounting-based quantitative measurements, but also using qualitative measurements. In addition, this study also examines the impact of quality accounting information on the efficiency of CSR investment. This study uses data on financial statements of companies listed on the Indonesia Stock Exchange in 2015-2016 and Sustainability Reports taken from the companies’ websites. Data analysis techniques used in this study were multiple regression and logistic regression tests. The results of this study indicate that the quality of quantitatively measured financial reporting has a significant positive relationship to CSR investment with the possibility of over investment, as well as having a significant negative relationship to CSR investment with the possibility of under investment. However, the quality of qualitatively measured financial reporting has a significant positive relationship to CSR investment with the possibility of over investment, and has a significant negative relationship to CSR investment with the possibility of under investment.