The Influence of Corporate Governance and Key Audit Matters on the Quality of Financial Reporting: The Moderating Role of Firm Size in IDX-Listed Manufacturing Companies (2020–2023)

This research examines how Good Corporate Governance (GCG) and Key Audit Matters (KAM) influence financial reporting quality, with firm size considered as a moderating factor. The study is conducted on manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2020–2023. GCG is assessed through two proxies: the proportion of independent commissioners and the size of the audit committee. A quantitative approach is applied, relying on secondary data obtained from annual reports and audited financial statements. Data analysis employs multiple linear regression and Moderated Regression Analysis (MRA) using EViews 12. Unlike prior studies that typically address GCG and KAM in isolation, this work combines the two to build an integrated empirical model. The findings indicate that both independent commissioners and audit committee size do not significantly affect financial reporting quality. In contrast, KAM disclosures exert a positive and significant impact. Moreover, firm size does not moderate the relationship between GCG, KAM, and reporting quality. These results highlight that auditor transparency—captured through KAM disclosures—has greater influence on the credibility of financial statements compared to board-level governance mechanisms. The study enriches the literature by presenting the joint effect of governance and audit disclosures, while offering practical implications for regulators, policymakers, and practitioners to reinforce governance standards, enhance audit transparency, and reduce risks of financial misstatement in Indonesia.