The content and determinants of CSR anti-corruption disclosure: the case of public-listed companies in Indonesia
| DOI | https://doi.org/10.1108/JFC-07-2021-0155 |
| Published date | 02 September 2021 |
| Date | 02 September 2021 |
| Pages | 890-907 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial crime |
| Author | Faisal Faisal,Corina Joseph,Andriani Saputri,Andri Prastiwi |
The content and determinants of
CSR anti-corruption disclosure:
the case of public-listed
companies in Indonesia
Faisal Faisal
Department of Accounting, Universitas Diponegoro, Semarang, Indonesia
Corina Joseph
Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Sarawak,
Kota Samarahan, Malaysia
Andriani Saputri
Master of Accounting Programme, Universitas Diponegoro,
Semarang, Indonesia, and
Andri Prastiwi
Department of Accounting, Universitas Diponegoro, Semarang, Indonesia
Abstract
Purpose –This study aims to investigate the content and determinants of the corporate social
responsibility (CSR) anti-corruption disclosures (ACDs) of public-listed Indonesian companies using
institutionaland legitimacy theories.
Design/methodology/approach –A content analysis method is used to extract the anti-corruption
information in the annualreports. This study uses 40 checklist items developed and used by prior studiesto
measure the extent of CSR ACD. Univariate and multivariate analyses are applied to examine the
determinantsof ACD.
Findings –The results show that the disclosure level of anti-corruption is considerably satisfactory at
44.9%. The whistle-blowing theme is the most frequently reported. Size of firm and industry type have
significant effectson ACD. Surprisingly, the findings show that government ownership has a negative effect
on ACD.
Research limitations/implications –The study is limited to one year of observationand is therefore
unable to capture changesin the level of disclosure due to policy changes. The results of this study help anti-
corruption decision-makers by taking into account the company’s legitimacy and isomorphic factors when
formulating ACD policies and efforts that could be made to promote greater disclosure of anti-corruption
information.
Originality/value –This study contributes to the discourse of CSR by providing a more comprehensive
extent and more determinants of ACD practice in an emerging country from the lens of legitimacy and
institutionaltheories.
Keywords CSR, Disclosure, Anti-corruption, Institutional, Legitimacy, Indonesia
Paper type Research paper
The authors are grateful to the Institute for Research and Community Services, Universitas
Diponegoro, Semarang, Indonesia, for funding this research.
JFC
29,3
890
Journalof Financial Crime
Vol.29 No. 3, 2022
pp. 890-907
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-07-2021-0155
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
1. Introduction
Currently, information regarding anti-corruption practices as part of corporate social
responsibility (CSR) information has evolved and become valuable for key companies’
stakeholders, both in developed and developing countries (Joseph et al., 2016;Nobanee and
Ellili, 2020). This is because anti-corruption disclosures (ACDs) demonstrate a company’s
commitment to the corruption prevention process (Duho et al., 2020; GRI, 2017) and are a
positive signal for fosteringbetter anti-corruption efforts (Blanc et al., 2017). Corruptionmay
occur in any hemisphere (Brody et al., 2020), with developing countries experiencing it the
most (Vale and Branco, 2019). Not surprisingly, in developing countries, initiatives to
develop regulations to combat corruption are developing very rapidly. For instance, the
Democratic Republic of Congo already has a financial intelligence unit, called the Cellule
Nationale des Renseignements Financiers, to combat financial crimes such as terrorist
financing and money laundering (Brody et al.,2020). The Malaysian government has
developed the National IntegrityPlan, the Government Transformation Programme and the
National Anti-Corruption Plan to address corruption through programmes within law
enforcement agencies and strengthen government procurement to minimise corruption
(Muhamad and Gani, 2020). Likewise, the governmentof the United Arab Emirates has the
Abu Dhabi Accountability Authority, which aims to combat financial and administrative
corruption (Nobanee et al., 2020). As evidence of its commitment to the eradication of
corruption, Indonesia has made various efforts, one of which is the formation of
anti-corruption agencies and non-governmental organisations (NGOs). Indonesia has an
anti-corruption agency, the Indonesian Corruption Eradication Commission/Komisi
Pemberantasan Korupsi (KPK), which was established in 2003. Besides the KPK, Indonesia
also has Indonesia Corruption Watch (ICW). ICW is an Indonesian NGO primarily responsible
for monitoring and reporting on corruption incidents in Indonesia.
While the KPK and ICW have existed for a long time, however, their performance in
eradicating corruption in Indonesia is still unsatisfactory. Data from Transparency
International Indonesia demonstrates that the ranking of the Indonesian Corruption
Perception Index from 2015–2019 is as follows: 36 (88/168), 37 (90/168), 37 (96/180), 38 (89/
180) and 40 (86/180) (KPK, 2020). Furthermore, data from Indonesia Transparency in
Corporate Reporting (TRAC) indicatesthat the TRAC score for Indonesian companies is 3.5
on a scale of 0–10, which means that most companies in Indonesia are still less transparent
and tend to fail to disclose theirinvolvement in anti-corruption programmes. In terms of the
transparency of anti-corruption programmes, Indonesia scored 38% on a scale of 0–100,
which means that there are only a few companiesthat have adequate corruption prevention
systems (Salim, 2018).
Public companies are inextricablylinked to corrupt practices, such as collusion, bribery
and fraud. Take, for example, the bribery case for procurement of aircraft and aircraft
engines from Airbus SAS and Rolls-Royce PLC by PT. Garuda Indonesia in 2019; alleged
bribery in the provision of funding facilities by PT Danareksa Sekuritas to PT Evio
Sekuritas from 2014–2015; and the practice of implementing subcontractor work by PT
Waskita Karya, which is allegedly fictitious, for several construction projects during 2009–
2015. These are a few examples of big cases of corruption occurring in large public
companies. This indicates thatpublic companies are highly vulnerable to corrupt practices.
The emergence of various casesof corruption in public companies is likely due to the lack of
specific regulations and policies obliging or encouraging public companies to have anti-
corruption programmes and procedures. Therefore, it is necessary to investigate how
extensively public companiesin Indonesia disclose information on anti-corruption practices.
Content and
determinants
of CSR
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