The objectives of this research are twofold, to test the audit quality of companies that change their auditors either voluntarily or mandatorily and to test the financial characteristics as a factor for an accounting firm to engage in pseudo mandatory rotation. Since 2002, Indonesia has had legislation mandating companies to rotate their auditor after six years of consecutive engagements (five years prior to 2008). However, auditors sometimes seem to find their own way to deceive the mandatory regulation by a tactic called "pseudo" mandatory rotation. Thus, we divide mandatory rotation into two categories, pure and pseudo mandatory rotation.The results of the data we collected since the Ministerial decree became effective in 2003 indicate companies that rotate their auditors mandatorily have higher audit quality than that of companies voluntarily rotating auditors. However, we cannot find evidence that pseudo and pure mandatory rotation have different audit qualities. The results also indicate that switching among bigger accounting firms have the highest audit quality rather than switching between smaller audit firms which have lower audit quality. Lastly, the motives of an accounting firm to engage in pseudo or pure mandatory rotation are related to the financial size of their clients. Future research must consider the limitation stated in this study. AbstractThe objectives of this research are twofold, to test the audit quality of companies that change their auditors either voluntarily or mandatorily and to test the financial characteristics as a factor for an accounting firm to engage in pseudo mandatory rotation. Since 2002, Indonesia has had legislation mandating companies to rotate their auditor after six years of consecutive engagements (five years prior to 2008). However, auditors sometimes seem to find their own way to deceive the mandatory regulation by a tactic called "pseudo" mandatory rotation. Thus, we divide mandatory rotation into two categories, pure and pseudo mandatory rotation.The results of the data we collected since the Ministerial decree became effective in 2003 indicate companies that rotate their auditors mandatorily have higher audit quality than that of companies voluntarily rotating auditors. However, we cannot find evidence that pseudo and pure mandatory rotation have different audit qualities. The results also indicate that switching among bigger accounting firms have the highest audit quality rather than switching between smaller audit firms which have lower audit quality. Lastly, the motives of an accounting firm to engage in pseudo or pure mandatory rotation are related to the financial size of their clients. Future research must consider the limitation stated in this study. 6JEL Classification: G38, M42, L51.
This paper examines the implementation of Syariah Acconting with murabah and mudharabah financing model at 81 KJKS-BMT, City of Padang. KJKS-BMT is an microfinance firms that is based on syariah rules. This research employs qualitative research method using interview with managers of KJKS-BMT and studying accounting documents. The main objective of the study is to describe and undertand how syariah acconting has been practiced at those islamic micro finance institutions. The results of this study shows that there is no KJKS-BMT that fully implement Syariah accounting for murabahah and mudharabah financing. However, this study found that 30 percent of KJKS-BMT has implemented it with 75% of level of implementation, 30% has implemented it with 50% of level of implementation. The remain, 40% of KJKS-BMT has just implemented it with less than 50% of level of implementation. In addition, majority of islamic microfinance organizations in Padang provide 80 percent murabahah financing and 20 percent mudharabah financing. This research suggests that capacity building is badly needed for KJKS-BMT to increase the quality of financial reporting and decision making process at KJKS-BMT
Good governance is a ware to create an efficient, effective and accountable government by keeping a balanced interaction well between government, private sector and society role. The implementation of a good governance is aimed to recover the public trust for the government that has been lost for the last several years because of financial, economic and trust crisis further multidimensional crisis. The Misunderstanding concept and unconcerned manner of government in implementing a good governance lately have caused unstability, deviation and injustice for Indonesia society. This paper is a literature study explaining a concept, principles and characteristics of a good governance. Furthermore, it explains the definition, development and utility of an efficient, effective and accountable government in creating a good governance mechanism having a strong impact to the democratic economy and social welfare. It also analyzes the importance of government concern for improving democratic economy suitable with human and natural resources and the culture values of Indonesia.
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