Board of Director’ Risk-Taking Characteristic and Accounting Conservatism

Abstract

This study aimed to examine the effect of characteristics of directors in risk-taking on accounting conservatism. The research is done on companies listed on Indonesia Stock Exchange. Sampling methods used purposive sampling with judgment sampling technique, consisting 55 companies during observation period of 2012. Data obtained through survey and documentation. Partial least squares be used to analyze.

The results showed that the risk-taking characteristics of directors (gender, compensation, stock ownership, and conservative attitudes) affect accounting conservatism. This provides empirical evidence for type theory that character of risk taking behavior of directors determine the company's financial reporting.

Keywords: Gender, Stock Ownership, Compensation, Conservative Attitudes toward Risk, Accounting Conservatism.