INVESTMENT OPPORTUNITY SET, FRAUD, AND AUDIT DELAY ON INVESTOR REACTION: THE MODERATING ROLE OF FEMALE BOARD COMMISSIONERS

Christian Damar Sagara Sitepu; Nur Khamisah; Muthi'a Handayani; Shelly Prahadian Putri

doi:10.29303/jaa.v11i1.882

Authors

Christian Damar Sagara Sitepu Universitas Sriwijaya
Nur Khamisah Universitas Sriwijaya
Muthi'a Handayani Universitas Sriwijaya
Shelly Prahadian Putri Universitas Sriwijaya

DOI:

https://doi.org/10.29303/jaa.v11i1.882

Keywords:

Audit delay, Female board commissioners, Fraud, Investment opportunity set, Investor reaction

Abstract

This study examines the effects of Investment Opportunity Set (IOS), disclosed fraud cases, and audit delay on investor reaction, while investigating the moderating role of female board commissioners in Indonesian banking firms. Using 235 firm-year observations of banking companies listed on the Indonesia Stock Exchange during 2020–2024, this study employs a quantitative research design and Moderated Regression Analysis (MRA). Investor reaction is measured using Stock Return; IOS is proxied by the market-to-book value of Equity (MBVE); disclosed fraud cases are measured by the number of fraud cases reported in annual and corporate governance reports; and female board commissioners are measured by their proportion on the board of commissioners. The results indicate that IOS has a positive and statistically significant effect on investor reaction, whereas disclosed fraud cases have a negative and statistically significant effect. Audit delay has a negative but statistically insignificant effect on investor reaction. Female board commissioners do not have a statistically significant direct effect on investor reaction and do not moderate the relationship between IOS and investor reaction. However, female board commissioners significantly strengthen the negative effects of disclosed fraud cases and audit delay on investor reaction. These findings suggest that growth opportunities and governance-related information are relevant to market responses, while board gender diversity may influence how investors respond to disclosed fraud and audit delay in the Indonesian banking sector.

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