The Effect of Financial Risk Management Disclosure to Firm's Value: Construction and Property Sector

Abstract

In this era of globalization, risk management is very important for companies to face uncertainty and complexity. Financial risk management have an important role for the company in analysing the financial risks faced by the company and to help the company developing management strategies that are in line with company goals and policy. Risk management can help a firm prevent internal fraud, and if it publishes its risk management practices, it can increase the company's credibility with financial reports users, particularly investors. One of the key indicators in the financial statements for reporting the risks the firm faces and the efforts it has taken to manage those risks is risk disclosure. The data used for this study is the annual financial statements of construction and property companies listed in the Bursa Efek Indonesia (BEI / Indonesia Stock Exchange) in 2015-2017. The data of companies are processed and analysed using the multiple regression technique which is assisted by the SPSS computer program. The result of this study shows that simultaneously the independent variables has effect to firms' value of construction and property.