Audit Committee Role, Earning Quality and Firm Value: A Study of Family Business on Indonesia Stock Exchange Market

This research aims to evaluate the effectiveness of Audit Committee (AC) roles (AC) on firm values (FV) and earning quality (EQ) as moderating variable. The roles of AC were measured by the proficiency, expertise, and competence shown by the members of the committee in having a background in accounting or other finance related courses, meeting the frequency of AC and in the size of AC. EQ was measured by using the earning management (EM) while the FV was measured by using the Tobin’s Q. The populations of this research were members of the family businesses listed on Indonesia Stock Exchange (IDX) from 2008 to 2016. The sampling technique used in selecting the data used is the purposive random sampling method. Multiple regression analysis was used to test the model of the study. The result obtained, effectiveness of AC roles was unable to prove its influence to FV. This research was also unable to prove the ability of EQ to moderate the influence of AC on FV.