The Influence of Institutional Ownership and Audit Committee on Company Financial Performance with Financial Distress as an Intervening Variable in Companies with Special Notation
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Audit Committee,
Financial Distress,
Financial Performance
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Abstract
This study aims to examine the effects of institutional ownership and the audit committee on financial performance, with financial distress as an intervening variable, among Special Notation Issuers listed on the Indonesia Stock Exchange (IDX). A quantitative approach with an explanatory research design was employed. Secondary data were obtained from companies’ annual reports and financial statements. The population consisted of Special Notation Issuers listed on the IDX, while the sample was selected using purposive sampling based on companies with B, D, E, or ED notations and complete financial statements for 2020–2025. From 215 Special Notation Issuers, 50 companies were selected as the sample. Financial distress was measured using the Altman Z-Score, while financial performance was measured using Return on Assets (ROA). Data were analyzed using panel data regression, t-test, F-test, coefficient of determination, path analysis, and the Sobel test. The results show that institutional ownership has no significant effect on financial distress, while the audit committee has a significant negative effect. Institutional ownership positively affects financial performance, whereas the audit committee has no significant effect. Financial distress negatively affects financial performance, does not mediate the relationship between institutional ownership and financial performance, but mediates the relationship between the audit committee and financial performance. These findings emphasize the importance of strengthening corporate governance, internal controls, and early warning systems to maintain financial stability.
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