Audit Committee, Foreign Ownership and Sustainability Report

The purpose of this study is to see whether the audit committee and foreign ownership influence the sustainability report with leverage, size and independent commissioners as control variables. The population of this study are mining companies listed on the Indonesia Stock Exchange and have complete data on audits, independent commissioners, foreign ownership, size and leverage for the period 2012 2015. Data analysis techniques in this study used multiple regression with the help of SPSS. The results of the study indicate that audit committee does not involve sustainability report, while foreign ownership is considered negative for sustainability report.


Introduction
According to Berle and Means (1932) the company is a system in society. Where the system consists of several components, namely investors, employees, creditors, consumers, suppliers, government and society where these components are also called stakeholders. In order for the company to survive, the company has to pay attention to the interests of stakeholders (Berle and Means, 1932). Furthermore, Elkington (1997) with The Triple Bottom Line theory said that to be survived, the company not only pay attention to stakeholders, but also planet in addition to profit and people. This is called by sustainability or corporate social responsibility. In fact, many companies do not pay attention to sustainability. Evident from the many cases that occurred in the world giant companies that went bankrupt and harmed the stakeholders include: Enron Corporation, Consesco, and WorldCom in the United States, Baring Futures in Singapore and Peregrime Investment Ltd in Hong Kong, Lehman Brother and Toshiba. An accounting scandal also occurred with BP Migas which caused State losses of Rp. 16.1 trillion (Tempo, 19 November 2012). An accounting scandal also occurred with Real Gold Mining and Sky China Petroleum service Ltd (Reuters.com, October 13, 2011). Whereas cases of environmental pollution (planet) and tribal empowerment occur in Papua by Freeport companies (Liputan6, 2016). Pollution also occurs in the Timor Sea and a lawsuit has been made by the government against the Australian EP PTT over an explosion incident in oil and gas fields which has caused oil pollution in the waters of the NTT Timor Sea (Tempo, March 18, 2017). Lapindo mudflow in Porong, environmental pollution by Newmont in Buyat bay. Companies have to pay attention to sustainability in order to get survived (Elkington, 1997). To make the company pay attention to sustainability, it is necessary to have an audit committee (Khan et al, 2012;Jizi et al, 2014;Kend, 2015;Said et al, 2017) and the existence of foreign ownership (Darus et al, 2009;Said et al, 2009;Saleh et al, 2010;Oh et al, 2011;Khan et al, 2013;Soliman et al, 2013;Guinness et al, 2017). Based on the formulation of the problem in this study is: Are the audit committee and foreign ownership influencing sustainability report on mining companies listed on the Indonesia Stock Exchange? The purpose of this study is to see whether the audit committee and foreign ownership influence the sustainability report of mining companies listed on the Indonesia Stock Exchange.

Foreign Ownership
Foreign ownership is ownership of company's share by foreign parties either individually or institution (Zulvina et al, 2017). The indicator of Foreign ownership is percentage of foreign ownership (Makhdalena, 2016).

Theoretical Framework 2.2.1. Audit Committee and Sustainability Report
One of the factors that influence sustainability report is an audit committee (Said et al 2017;Said et al, 2009;Khan et al, 2013;Jizi et al, 2014;Kend, 2015). Research on the audit committee and sustainability report has been carried out by previous researchers, such as: Said et al (2017); Said et al (2009) ;Khan et al (2013); Jizi et al (2014); Kend (2015). Said et al (2017) conducted a study on listed companies in Malaysia using regression as a data analysis tool. The results of the study show that government ownership and audit committees have a positive and significant influence on CSR disclosure.
The research conducted by Said et al (2009) on listed companies in Malaysia using regression as a data analysis tool. It showed that the independent commissioners, government ownership, duality, audit committees, managerial ownership and foreign ownership had a positive and significant influence on corporate social responsibility disclosure. Khan et al (2013) conducted research on companies listed on the Dhaka Stock Exchange using regression as a data analysis. The results of the study indicate that public ownership, foreign ownership, independent board, audit committee, and CEO have a significant positive impact on CSR disclosure.
Jizi et al (2014) have conducted research on National commercial banks in the US using regression as data analysis. The results showed that the audit committee had a positive relationship with CSR disclosure. Kend (2015) has conducted research on companies registered in the UK and Australia using Sequential logit analysis data in the analysis of research data. The results show that the audit committee is active and effective in influencing disclosure of voluntary sustainability.

Foreign Ownership and Sustainability Report
Research on foreign ownership and sustainability report has been largely carried out by Guinness et al (2017) Oh et al (2011) has conducted research on companies listing the Korean Stock Exchange by using regression analysis tools. The results showed that foreign ownership positively affected CSR. The existence of foreign ownership can also increase CSR.
The research conducted by Said et al (2009) on listing companies in Malaysia using regression as a data analysis tool. The results of research conducted by Said et al (2009) showed that the results of independent commissioners, government ownership, duality, audit committees, managerial ownership and foreign ownership had a positive and significant influence on corporate social responsibility disclosure.
Population of this study are mining sector companies listed on the Indonesian Stock Exchange during the research period 2012-2015. However, companies that have complete data (Audit Committee, Foreign Ownership, Independent Commissioners, Size and Sustainability Report) for four (4) consecutive years are only 9 companies and all are taken. The type of data from this research is secondary data obtained by the technique that comes from annual report and sustainability report. The method of data analysis is using path analysis with the help of SPSS.
The detailed operationalization of research variables as follows: Report concerning financial performance information and non-financial information, namely those concerning environmental, social, and economic issues that enable companies to grow sustainably (Elkington, 1997 One of the board which is made by commissioners that responsible for the financial reporting process and disclosures (Messier et al, 2006).
Ownership of the company's shares by foreign parties either individually or institution.
Amount of members, amount of independent members, amount of financial experts and number of meetings (Makhdalena, 2012) Percentage of ownership by foreign   Kend (2015) which states that the audit committee has a positive effect on sustainability report. But the results of this study are in line with research conducted by Appuhami and Tashakor (2017) which states that audit committees have no effect on sustainability report. The audit committee's influence on sustainability report in mining companies that are listed on the Indonesia Stock Exchange is due to the existence of an audit committee only because of regulatory incentives in order to avoid sanctions and not intended to enforce corporate governance (Sodiq in Makhdalena, 2012). This can be seen from the research data where the average number of audit committee members from the sample companies is only 3 people at the minimum, and there are even sample companies that only have two audit committees. OJK (2015) requires the composition of the audit committee, namely a minimum of three (3) people. And there are also sample companies that do not have financial experts on the audit committee. OJK (2015) requires audit committee members at least one (1) person to be a financial expert. Audit committee members also do not have experts who are socio-certified and environmental, so they do not understand the concept of sustainability itself. Furthermore, the audit committee's impact on sustainability report was also caused by the lack of audit committee activities. This can be seen from the research data where the number of meetings held by audit committees from sample companies was only fulfilling regulatory requirements and even sample companies. the audit committee does not conduct meetings. According to OJK (2015) the audit committee must hold meetings at least one (1) time in three (3) months. Lastly, this audit committee did not influence the sustainability report because the audit committee did not work full-time at the companies that appointed them so they did not have much time to discuss matters related to sustainability. SOA (2002) requires an audit committee to work full-time with companies that appoint them to be able to pay close attention to everything related to corporate governance because corporate governance is the responsibility of the audit committee.
The second hypothesis of this study is: Foreign ownership has a positive effect on sustainability report. However, based on the results of the study, it can be seen that foreign ownership has a negative effect on sustainability reporti The results of this study are not in line with the research conducted by Said et al (2009), Khan et al (2013), Oh et al (2011), Saleh et al (2010), Soliman et al (2013, Darus et al ( 2009) andGuinness et al (2017) which state that foreign ownership has a positive effect on sustainability report. The results of this study are in line with the research conducted by Zulvina et al (2017) which states that foreign ownership has a negative effect on sustainability report. Foreign ownership has a negative effect on sustainability report in mining sector companies listed on the Indonesia Stock Exchange. This is because the investment costs for implementing sustainability are very expensive and the return time for these investments are very long. As a result, the costs incurred to implement sustainability will reduce the profits that will be distributed as dividends to shareholders (foreign ownership). As the mining sector is a non-renewable natural resource sector, the company operates only as long as the mining stock is still available, so the company is reluctant to apply sustainability. This makes the companies become unwilling to implement sustainability. Or if they do, the sustainability program that is carried out is only philanthropy. This can be seen from the results of research data where the average sustainability disclosure is only at index 32 or 32% of the total items that must be done. There are even sample companies that only disclose 4.55% of the total items that should be disclosed. The highest number of sample companies revealed that sustainability items were 68.18%. The low implementation of sustainability is due to the absence of clear and explicit punishment for companies whom do not carry out sustainability so that the disclosure is low.

Conclusion
Based on the formulation of the problem, review of the literature and the results of the research and discussion, it can be concluded that the audit committee has no effect on the sustainability report and foreign ownership has a negative effect on sustainability report.