JASF: Journal of Accounting and Strategic Finance

Constructing Optimal Portfolios Using the Single Index Model and Markowitz Model: A Study on Cryptocurrencies

Eko Sanjaya Nurhakim — 2024-12-23

This study analyzes the formation of optimal portfolios on cryptocurrency assets using the single index model and the Harry Markowitz model. This study covers 79 cryptocurrencies with the largest market capitalization during the period June 2023–June 2024. We calculate the optimal portfolio using the single index model and Markowitz, and evaluate its performance using the Sharpe Ratio. The results show that the Harry Markowitz model produces better portfolio performance compared to the single index model. The Markowitz portfolio produces a positive Sharpe ratio (1.8496), a portfolio return rate of 7.678%, and lower risk (0.0415). Conversely, the single index model portfolio shows a negative Sharpe ratio (-2.0971), indicating lower returns than risk-free assets. In addition, the Markowitz model offers more efficient diversification than the single index model. However, in general, both the Single Index Model and the Markowitz Model have a significant effect on the formation of optimal portfolios, with the Sharpe Index proving to be a significant mediator in the relationship between the two models and the optimal portfolio. The R-squared value shows that the SIM variables, Markowitz Model, and Sharpe Index explain 48.4% of the variation in the optimal portfolio. This study recommends the use of the Harry Markowitz model for cryptocurrency investment because it can provide higher returns with more controlled risks. This study provides important insights for investors on the strategy of diversifying cryptocurrency asset portfolios.

Digitalization of Accounting: Accountant Profession in Facing Challenges of Era 5.0

Khoirun Nisa' Syamsiyah — 2024-12-23

This study aims to determine how the accounting profession responds to the issue of digitalization. This study uses a qualitative research method with a case study design. Data collection was conducted through interviews at one of the Public Accounting Firms in Malang. The findings in this study are concerned about client data leaks that affect trust in digital systems, especially in the use of Audit Tools and Linked Archive System (ATLAS) in their work, significant benefits in the efficiency and accuracy of accounting work through the use of technology, and threats to the accounting profession due to automation and the increasing risk of cybercrime. The results of this study itself offer strategic insights into dealing with changes in the landscape of the accounting profession, including strengthening data security, adapting skills, and developing policies that support digital transformation.

Revealing Corporate Value: The Role of Investment Decisions, Debt Policy, and Ownership Structure

Ida Ayu Sri Brahmayanti — 2024-12-23

This study examines how investment decisions, debt strategies, and ownership structures influence corporate value, specifically targeting manufacturing companies listed on the Indonesia Stock Exchange from 2019 to 2021. Using a quantitative approach and Partial Least Squares (PLS), the research integrates these critical factors into a comprehensive framework. The findings indicate that asset growth significantly impacts corporate value, highlighting the importance of effective investment strategies, while debt expansion positively influences firm value. However, managerial ownership does not exhibit a strong direct relationship with asset growth, equity expansion, or debt policies. Furthermore, this study highlights the significant role of institutional investors in strengthening corporate governance and reducing agency conflicts. Drawing on recent findings, it underscores the importance of intellectual capital and cash reserves in boosting financial performance and market valuation. The effective management of intellectual capital components—namely human, structural, and relational capital—serves as a bridge between financial performance and market valuation, while strategic cash reserves reflect financial stability and potential for growth. By synthesizing investment, financing, and ownership decisions, this study offers a novel perspective and practical implications for firms navigating post-pandemic economic recovery, emphasizing the synergy of financial strategies in optimizing corporate value and enhancing shareholder wealth.

An Evaluation of Risk Management's Impact on University X's Performance

Vitra Puspita Dewi Hamzah — 2024-12-31

Risk management has become an important element in efforts to improve university quality, especially in the era of globalization filled with challenges and uncertainties. This study aims to analyze the implementation of risk management at University X as a means to enhance the university's quality. This research focuses on the implementation of risk management at the Lembaga Penelitian dan Pengabdian Masyarakat (LPPM), which implements the tri dharma of university in the form of research development and community service, and conducts an analysis using ISO 31000:2018. This research employs a qualitative descriptive method and a case study approach, collecting primary and secondary data through interviews, SOP documentation, and risk management guideline documentation. The research results show that the LPPM of University X has implemented the risk management process using ISO 9001:2015. The implementation of risk management by LPPM can be considered adequate; however, there are challenges such as the establishment of risk criteria, comprehensive risk identification, and the lack of integration of risk management into the strategic decision-making process. This research suggests the implementation of risk management at the university level to ensure the integration of risk management and the enhancement of risk management understanding within the university environment. This finding will help university education service, not limited to University X, to enhance their quality based on risk management.

The Impact of Corporate Governance Mechanisms on the Audit Fees of Islamic Banks: Evidence from Malaysia

Vicky Vendy — 2024-12-31

This study examines the influence of corporate governance (CG) structures on audit processes, specifically regarding audit fee pricing within Malaysian Islamic banking (IB) institutions. This research employs panel data from 16 Islamic banks in Malaysia covering the period from 2011 to 2017. Fixed effects specifications are used to estimate the model of regression. The results show a significant negative relationship between audit fees and the independence of audit committees (AC) and the expertise of Shariah committees (SC). The majority of CG variables, however, do not exhibit any substantial relationships with audit fees. The results suggest that a lower-intensity audit is demanded by the agents of internal governance in a highly-regulated industry, possibly due to regulatory supervision and the monitoring of audits overlap. This is the first study on audit fees using IB as the study sample which incorporate and examine SC as one of the unique CG mechanisms that have not been explored in audit fee literature. This paper provides support for the recommendations of the MCCG 2017 and 2021, which involved the step-up practice in relation to the need to establish AC composed only of independent directors. By improving the monitoring function and perhaps lowering the control risk, this AC composition will help organizations receive lower audit fees from their external auditors.

Factors Influencing Fintech Adoption Among MSME’s in Bandung West Java Indonesia

Jimmy Julio Ratu Edo — 2024-12-30

The purpose of this study was to identify and quantify the factors impacting the adoption of fintech by micro, small, and medium-sized enterprises (MSMEs) in Bandung. The factors are perceived ease of use, perceived utility, financial literacy, user innovation, government assistance, and trust. Based on the data gathered, this study comprised 356 participants who are either performers or owners of Micro, Small, and Medium Enterprises (MSMEs) in Bandung. The correlation between variables is investigated in this study utilising the Partial Least Squares (PLS) data analysis approaches and SmartPLS v 3.2.9 software. The results of the study show that perceived simplicity of use, perceived usefulness, user innovativeness, and trust all have a major impact on Fintech acceptance. In contrast, financial literacy and government backing have no substantial impact on fintech uptake. This study emphasizes the importance of fintech service providers to prioritize ease of service and build trust..Then the government ought to accelerate the development of information and communication technology (ICT) infrastructure, such as expanding mobile broadband coverage and promoting Fintech companies through advantageous laws. Incorporating financial literacy into the school curriculum may help to reduce information asymmetry and improve financial accessibility, hence promoting the growth of MSMEs.

Herding Dynamics, Volatility, and Market Capitalization: Implications for Stock Returns in Indonesia

Rengga Madya Pranata — 2024-12-23

This research examines the connections between herd mentality, price fluctuations, and company size in relation to stock performance for firms listed on the IDX from January 2019 through December 2023. The LSV approach is employed to quantify herding behavior, while historical data is used to calculate volatility. The study investigates how market capitalization and volatility influence the link between herd mentality and stock returns. Weekly stock prices, company valuations, trading volumes, and sales proportions from TradingView comprise the dataset. Findings indicate that market capitalization significantly enhances the relationship between herd behavior and stock returns, particularly for large-cap enterprises. Conversely, volatility weakens this relationship, with herd behavior's impact on stock returns diminishing in turbulent market conditions. These results highlight the significance of company size and market volatility in comprehending group investor conduct and its effects on stock market outcomes. The study's implications include the creation of more flexible investment tactics and market regulations that promote stability across various market scenarios.

Interpreting the Motivation of Implementing Risk Management from Aristotle's Perspective

Aviani Widyastuti — 2024-12-27

This study aims to describe the implementation of Risk Management (RM) in business organizations represented by one of Indonesia's Fintech and Manufacturing sector companies from the perspective of Aristotle's Virtue theory. The two informants are used to get different perspectives on the regulations governing the implementation of RM. Through a semi-structured interview, we can illustrate that the two companies have implemented RM with various constraints and challenges, including each organization's characteristics and default risks. However, the implementation of RM is not only driven by the motivation of financial success but also ensures the sustainability of the company by considering all stakeholders' interests. This is in line with the principle of Virtue in Aristotle, which states that an organization's decision needs to consider Teleology, Habituation, noble pressure, Phronesis, social Virtue, and moral and intellectual superiority. Aristotle's principle of Virtue can be used as a basic framework for building an RM system in a business organization. Integrating the principle of Virtue into the RM system can create an organizational risk culture based on Virtue.

Innovations in Strategic Finance and Accounting: Insights from Research Centers in a VUCA Environment

Raden Muhammad Syah Arief Atmaja Wijaya — 2024-12-31

This paper examines the function of research centers in promoting strategic innovations in finance and accounting under the VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) paradigm. This work employs a qualitative approach, incorporating benchmarking of research centers and literature evaluation, to identify approaches that improve financial resilience and adaptation. There are three research that develop financial resilience fields from Indonesia, Canada, and the United States that were analyzed. The data was obtained from field benchmarking and website observation. Comparative analysis is used to get a deep understanding of how research centers facilitate the advancement of innovative financial and accounting strategies to tackle challenges in VUCA environments. The results underscore the importance of collaboration, technological integration, and actionable frameworks, providing recommendations for academia, governments, and communities to connect research-driven innovation with practical application. This research highlights the unique role of research centers in addressing VUCA challenges by integrating technology-driven frameworks, data-centric tools, and community-based approaches, offering a comprehensive perspective on bridging theory and practice to enhance financial resilience and adaptability.

Sustainability Performance and Companies Financing: Does Audit Quality Matter?

Muhammad Rafiuddin — 2024-12-30

Public listed companies are increasingly recognizing the importance of corporate social responsibility in their sustainability initiatives. Supporting the stakeholder theory, a commitment for social responsibility activities that reflected by CSR performance as a strategy of firms has created a positive image from stakeholder perceptions. This study examines how corporate social responsibility performance affects companies financing and the role of audit quality. To test the study’s hypotheses, the authors applied linier regressions model on panel data by observing samples of Indonesian Islamic listed companies from 2018 to 2022. The results show that a better CSR performance is associated with lower cost of debt and cost of equity. Moreover, this study also reflect upon the importance of audit quality that proxied by the BIG 4 auditors is found significantly moderates in both cost of debt and cost of equity. Thus, a better corporate social performance with the existence of BIG 4 auditor implies the ability of firms accessing to lower-cost capital by minimized the long term risks. The existence of BIG 4 auditors demonstrated the credibility effective monitoring as a good signals for capital provider or lenders. Our study represents a novelty to enrich the relevant literature on the corporate social responsibility by expanding it towards the role of audit quality on both cost of capital proxies.