Influence of Fair Value Measurement and Board Effectiveness on Earnings Quality through Corporate Governance in Indonesian Listed Companies
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Abstract
This study investigates the influence of Fair Value Measurement and Board Effectiveness on Earnings Quality through the mediating role of Corporate Governance in Indonesian public companies. Employing a quantitative approach, the research collected data from 185 firms listed on the Indonesia Stock Exchange (IDX). Data were gathered through structured questionnaires using a five-point Likert scale and analyzed with Structural Equation Modeling–Partial Least Squares (SEM-PLS 3). The results show that both fair value measurement and board effectiveness have significant positive effects on corporate governance, which in turn has a substantial impact on earnings quality. Corporate governance is also found to mediate the relationship between the independent variables and earnings quality, emphasizing its pivotal role as an institutional bridge that connects accounting transparency and managerial oversight to reporting credibility. The findings contribute to the literature by providing empirical evidence from an emerging market context and offer practical insights for policymakers, regulators, and corporate leaders to strengthen governance mechanisms and fair value disclosure practices. Overall, this study confirms that effective governance and transparent accounting standards are essential for achieving high-quality earnings and sustaining investor trust in Indonesia’s capital market.
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