Analysis of Financial Distress of Companies Heading Towards Bankruptcy Viewed from the Aspect of Institutional Ownership and Audit Committees

Rakhmat Irwansyah; Yohannes Indrayono; Arief Tri Hardiyanto

doi:10.55927/y3pjbd20

Authors

Rakhmat Irwansyah Pakuan University Author
Yohannes Indrayono Pakuan University Author
Arief Tri Hardiyanto Pakuan University Author

DOI:

https://doi.org/10.55927/y3pjbd20

Keywords:

Financial Distress, Institutional Ownership, Audit Committees, Companies Bankruptcy

Abstract

This research aims to analyze the direct influence of institutional ownership and audit committees on the financial distress of companies facing bankruptcy. The research approach is quantitative with causal methods. The research objects were 251 companies that had liquidity difficulties and had the potential to go bankrupt in the 2020-2025 period on the Indonesian Stock Exchange. Data analysis was conducted using EViews version 10 to perform path analysis with the t-test. The research results show (1) institutional ownership does not have a significant influence on financial distress; (2) the audit committee has a significant effect on financial distress. Companies are advised to strengthen internal governance mechanisms, especially the audit committee function

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