Income Information Content in Companies That Express Corporate Social Responsibility

Abstract

The relevance of information about corporate social responsibility (CSR) is increasingly believed to be superior information compared to historical information derived from reporting accounting earnings. This study aims to determine the quality of earnings information in companies that make CSR disclosures in annual reports . This research is important to analyze the benefits of CSR disclosure as a source of relevant information for investment decision making compared to accounting earnings information. This study also adds company size and price to book value as control variables . This research sample uses manufactur-ing data listed on the Indonesia Stock Exchange in 2010 and 2011 were 156 observations . The data processing method used is a multiple linear regression analysis. The results of this study prove that information about CSR in financial reports is superior to company earnings information. The more extensive disclosure of CSR conducted by companies in this study is proven to reduce market response to earnings information. This proves that CSR information is proven to be more important and more considered by investors as material for decision making than company profit information.