Abstract:
This study aims to develop a theory of determining the quality of financial statement reports that canincrease investor confidence in financial information presented by management. This researchwould like to find the role of good corporate governance in improving the quality of financialstatements as measured by accounting conservatism and earnings management, then it will be seenhow the quality ability of financial statement can influence investor confidence level. The result ofthe research did not find the influence of corporate governance mechanism on the quality offinancial statements. However, the simultaneous test results found that corporate governancemechanisms and the quality of financial statements affect the level of investor confidence.Profit management as an indicator of the quality of financial statements negatively affects the levelof investor confidence. But accounting conservatism declared no effect on the level of investorconfidence. The results of the test with path analysis found that the variables that have a directinfluence of the mechanism of good corporate governance is the ownership of the institution, whileother variables have no influence either directly or indirectly.
