Pengaruh Rotasi Audit, Spesialisasi Industri KAP, dan Client Importance Terhadap Kualitas Audit (Studi dengan Pendekatan Earning Surprise Benchmark)

Abstract

This research was aimed to examine empirically the effect of several factors to audit quality. These factors are Audit Rotation, Audit Firm Specialization and Client Importance. The population that will be used in this research are company listed in Indonesia Stock Exchange. This study uses sampel of 85 manufacturing companies listed in Indonesia Stock Exchange in the period 2015-2017. In this study, audit quality is measured by earning surprise benchmark. The method used was purposive sampling. The method of data analysis in this study use logistic regression with SPPS version 23. The results of this prove that (1) audit rotation is not proven to have an impact on audit quality, where sig value 0,915 > 𝛼 0,05 which means H1 is rejected (2) audit firm specialization is proven to have an impact on audit quality, where sig value 0,04 < 𝛼 0,05 which means H2 is accepted (3) client importance is not proven to have an impact on audit quality, where sig value 0,809 > 𝛼 0,05 which means H3 is rejected. The amount of Adjusted R is 0.036 gives the sense that rate is 3,6% of level audit quality can be explained by independent variables while 96.4% can be explained by the other independent variabels that are not tested in this study.Keywords: Audit Rotation, Audit Firm Specialization, Client Importance, Audit Quality

The Affecting Factors of Audit Quality with Earnings Surprise Benchmark Approach as a Measure of Audit Quality

“…Research conducted by [19], [20] and [7] show that PAF industry specialization affects audit quality positively. Companies handled with professional auditors tend to be announced weaknesses in internal control [21].…”

“…The reputation of a public accounting firm will always be related to the firm's size, and the PAF reputation will be reflected on the auditors who perform professionally and independently without depending on clients [22]. A public accounting firm with a large capacity occasionally provides good audit results and suits the company's condition [7], [23].…”

“…Research by [3] uses the independent variables of audit rotation, audit tenure, and age of publication on the dependent variable of audit quality as measured using the earnings surprise brandmark method, the results of this study indicate that audit rotation and audit tenure influence audit quality for the variable age of publication does not affect audit quality. Research conducted by [7] uses the independent variable audit rotation, public accounting firm industry specialization, client importance on the dependent variable of audit quality as measured by the earnings surprise brandmark method. The results of this study show audit rotation and client importance do not affect audit quality; the specialization of the public accounting firm industry affects audit quality.…”

The factors that influence audit quality by earnings surprise benchmark

“…In the current research, earnings surprise benchmark is the proxy of audit quality, to detect and uncover profit management committed by management for the purpose of avoiding reporting losses. According to Suciana and Setiawan (2018), audit quality is categorized into two: 1. Audit quality is high (MEET_BE=1) if the profit value falls in the range of normal value.…”

“…Numerous studies in Indonesia have examined audit quality, but very few have been found to use earnings surprise benchmark -a proxy employed to assess audit quality which emphasizes on profit quality (Suciana & Setiawan, 2018). Herianti and Suryani (2016) conducted a study regarding audit quality by modifying measurements that had been adjusted to the conditions in Indonesia.…”