Efficiency Capital Market and Financial Reporting in Era COVID-19

Abstract

The COVID-19 influence on global financial markets. The capital market is said to be efficient, one of which is if the stock price reflects the overall information available in the market. The implementation of IFRS is comparability and quality of financial reports between companies. The study used a literature review approach to the relationship between IFRS and Capital Market Efficiency. The methodology is carried out with a brief review of several previous studies, so that it can be concluded briefly and in detail without testing the data by collecting data and articles from various sources which are summarized into a qualitative analysis review. The results of the study found capital market efficiency and company financial reporting in the covid-19 era causing high stock price fluctuations before and after the announcement of the confirmation of the COVID-19 case in Indonesia and the market reacting negatively to the announcement causing information content. In the announcement has been used as a basis for investors to buy and sell shares. Indonesia, which has adopted IFRS through the circular SP 28/DHMS/OJK/IV/2020, the Financial Services Authority (OJK) regarding guidelines for accounting treatment, especially in the application of PSAK 71-Financial Instruments and PSAK 68-Fair Value Measurement related to the impact of the Covid-19 pandemic. With this provision, it is hoped that it can help companies/entities in Indonesia in dealing with uncertainties in financial reporting to make several provisions as a step that determines the company's future, not only by relying on data obtained from the previous period.