Audit Committee and Financial Distress: A Mediation Moderated Approach with Capital Intensity

Magda Siahaan (Department of Accounting, Trisakti School of Management, Jakarta)
Apit Susanti (Department of Accounting, Trisakti School of Management, Jakarta)

Jurnal Akuntansi
Vol. 30 No. 2 (2026): May-August 2026

This study analyzes the effect of audit committee effectiveness on financial distress in the Indonesian manufacturing industry, with executive characteristics as mediators and capital intensity as moderators. Using SEM-PLS on 225 observational data, the results show that audit committees significantly reduce the risk of distress through more conservative executive behavior. The Capital Intensity Ratio strengthens oversight, but asset wealth fails to deter risky executive decisions. Regulations are advised to differentiate GCG standards based on capital intensity the key message: the quality of human oversight is more crucial than asset size in preventing bankruptcy. The integration of agency, upper echelons, and contingency theories reveals the mechanisms underlying GCG behavior. It closes a literature gap by directly testing causal effects of shifts in executive risk preferences.