The Role of Profitability and Leverage in Mediation the Effect of Company Size on the Timeliness of Financial Reporting in the Indonesian Stock Exchange

Aims: This study is about the timeliness of financial reporting. It aims to analyse the profitability and leverage in mediating the effect of company size on the timeliness of financial reporting of Indonesian Stock Exchange (IDX) issuers in 2017-2019.

Study Design: The design of this research study is correlational.

Place and Duration of Study: Indonesian Stock Exchange (IDX) issuers in 2017-2019.

Methodology: Its population of all companies listed on IDX in 2017-2019, totalling 645 in 2017, 714 in 2018 and 792 in 2019. The sample was chosen intentionally for issuers who were not on time and simple random for issuers who were on time. The number of samples is 222, consisting of 98 who are not on time and 124 who are on time. The data type is secondary data, collected using documentation, while the data processing technique uses a structural equation model.

Results: The results show that the company's size significantly positively affects profitability. Firm size has a significant positive effect on leverage and the timeliness of financial reporting. Profitability has a significant positive effect on the timeliness of financial reporting. Profitability mediates a significant positive influence on company size on the timeliness of financial reporting. However, leverage has a significant positive effect on the timeliness of financial reporting. Leverage does not mediate the influence of company size on the timeliness of financial reporting.

Conclusion: This study supports the signalling theory in explaining the effect of firm size, profitability and leverage on the timeliness of financial reporting, as well as the role of profitability and leverage in mediating firm size on the timeliness of financial reporting.