Abstract:

This study aimed to prove that debt covenant violations have impact on firm’s monitorting activities. The audit activities referred in this study consisted activities and effectiveness of the audit committee. While the monitoring activities referred in this study was related to the activities and effectivenesss of the board of commissioners. The samples used in this study were loan agreements owned by non-financial public companies listed on the Indonesia Stock Exchange from 2012 to 2015. This study found evidence that the activities and effectiveness of the audit committee is affected by the debt covenant violations. However, this study also found that the activities and effectiveness of the board of commissioners isn’t affected by the debt covenant violations.