Language Preferences from Accounting and Linguistic Perspective in Sustainability Report

Proceedings of The 9th International Conference on Opportunities and Challenges in Management, Economics and Accounting

Year: 2022



Language Preferences from Accounting and Linguistic Perspective in Sustainability Report 

Theresia Hesti Bwarleling,and Putri Rindu Kinasih



This study aims to analyze empirically the trend pattern of companies in Indonesia in reporting the amount of carbon emissions as well as their economic, environmental and social performance, before and after the Ministry of Finance of the Republic of Indonesia’s ratification of Law Number 7 of 2021 concerning Harmonization of Tax Regulations.
In reading the pattern, this study uses a simulation through the measured emission taxes approach by using data on carbon emissions of issuers which are listed in IDX ESG Leaders on the Indonesia Stock Exchange from 2020 to 2021. It proceeds with the auditing process by applying the Benford’s law Principles, which has been proven to be a simple and effective audit tool in detecting the presence of irregularities in reporting an account value. In addition, the writers also investigate the difference on the number of linguistic hedging used in the 2020 and 2021 sustainability reports.
The results of this study indicate a tendency of an unreasonable pattern in the form of the emergence of carbon tax values in 2021 (this is after the ratification of the Carbon Tax Law), when compared to reporting in 2020 (before the ratification). The writers found that hedging is used more frequently in the sustainability reports of 2021 in which the Carbon Tax Regulation is implemented. This research is the first research to examine the Sustainability Report in both numerical and verbal frameworks.

keywords: Carbon Tax, Benford’s Law Principles, Linguistic Hedging.