The Effect of Audit Firms Size, Leverage, Going Concern Opinion, Audit Tenure, on Audit Quality in Indonesia

Triani, Ni Nyoman Alit; Yanthi, Merlyana Dwinda

doi:10.2991/aebmr.k.200606.044

Cited by 3 publications

(4 citation statements)

References 27 publications

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“…As a result, the audit quality of larger audit firms could be superior to smaller audit firms. The findings of this study are in line with previous researches (Gerayli et al , 2011; Inaam et al , 2012; Sawan and Alsaqqa, 2013; Triani and Yanthi, 2019).…”

Section: Findings and Discussionsupporting

confidence: 93%

“…There are several previous related studies that used content analysis by word counting to quantify the level of KAMs reporting in audit reporting on corporate annual reports (Suttipun, 2020, 2021; Wuttichindanon and Issarawornrawanich, 2020). The other independent variables were external audit characteristics consisting of audit fees (Al-Khaddash et al , 2013; Suseno, 2013; Rahmina and Agoes, 2014; Alareeni, 2017), which was measured by the annual audit fees (in million baht) paid by each of the listed companies, audit tenure that was measured by a dummy variable (Jackson et al , 2008; Clarina and Fitriany, 2019), audit experience which was measured by the period of being auditor (Gereyli et al , 2011; Inaam et al , 2012; Al-khaddash et al , 2013), auditor firm size which was measured by the total asset of the auditor firms (Gerayli et al , 2011; Inaam et al , 2012; Triani and Yanthi, 2019) and audit independence which was measured by the ratio of audit fees per audit firm income (James and Izien, 2014; Rahmina and Agoes, 2014; Handoko and Pamungkas, 2020). The dependent variable in this study was audit quality (Jackson et al , 2008) measuring by the Modified Jones Model (1995).…”

Section: Methodsmentioning

confidence: 99%

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Impact of key audit matters (KAMs) reporting on audit quality: evidence from Thailand

Suttipun

2021

JAAR

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PurposeThe study aims to examine the relationship between key audit matters (KAMs) reporting and audit quality of companies listed on the Stock Exchange of Thailand (SET).Design/methodology/approachCorporate annual reports from 2016 to 2019 were used as samples, with 100 companies and their 400 annual reports. The word count from KAMs paragraph in the audit report was used to assess KAMs reporting, while the Modified Jones Model was used to assess audit quality. In addition, external audit characteristics were used as variables in this study. The data were analyzed using descriptive analysis, correlation matrix and panel multiple analysis.FindingsAs the results, there was a positive significant relationship between KAMs reporting and audit quality. Moreover, the study found the impact of audit tenure, auditor firm size, audit independence, corporate size and corporate risk on audit quality.Research limitations/implicationsThe number of samples as well as the proxies of KAMs reporting and audit quality are listed as limitations of this study.Practical implicationsInvestors can use KAMs reporting as important information to their decision-making because KAMs information is associated with a high audit quality.Originality/valueThe study demonstrates that communication theory can be used to describe the positive impact of the new audit reporting on audit quality in an emerging country like Thailand as well as in developed countries.

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Section: Findings and Discussionsupporting

confidence: 93%

Section: Methodsmentioning

confidence: 99%

Impact of key audit matters (KAMs) reporting on audit quality: evidence from Thailand

Suttipun

2021

JAAR

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“…The results of this study are in line with previous research conducted by (DeAngelo, 1981), (Syahputri, 2021), (Triani & Yanthi, 2020), (F. Andriani et al, 2020), (Paputungan & Kaluge, 2018), and (Pham et al, 2017), who have found the effect of audit firm size on audit quality. However, this study's findings differ from (Purwanto, 2021) and (Palalangan et al, 2019b), who found no effect of audit firm size on audit quality.…”

Section: Wald Testsupporting

confidence: 92%

“…Research results regarding the effect of audit firm size on audit quality still need to be revised. (DeAngelo, 1981), (Triani & Yanthi, 2020), and (Paputungan & Kaluge, 2018) found the effect of the size of an audit firm on audit quality. (DeAngelo, 1981) initiated a study that examined the effect of audit firm size on audit quality.…”

Section: Introductionmentioning

confidence: 99%

The Effects of Audit Firm Size, Audit Tenure, and Audit Rotation on Audit Quality

Salman¹,

Setyaningrum²

2023

ijtc

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This study examines the effect of audit firm size, audit period, and audit rotation on audit quality. The data come from annual reports of infrastructure, utilities and transportation companies listed on the Indonesia Stock Exchange (IDX) from 2016 to 2020. The sampling method used is purposive sampling. A sample of 267 companies was obtained based on the purposive sampling method. The analysis technique used is logistic regression analysis with SPSS software. This study's results confirm agency theory's role in explaining the relationship between parties with different interests. The research findings reveal that the role of audit professional services performed by audit firms can minimize agency problems that arise. Empirically, study findings show that the size of an audit firm and its audit period positively affect audit quality. Conversely, audit rotation does not affect audit quality. The study results provide a practical contribution so that non-big-4 audit firms can improve audit quality as big-4. Audit firms should also pay attention to sufficient audit tenure, short enough or too long, to produce good audit quality.

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Influence of Audit Firm Attributes on Earnings Management and Audit Quality of Listed Nigeria Manufacturing Firms

Olagunju,

Oluwakayode,

Adenle

et al. 2024

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The influence of audit attributes on earnings management and audit quality was examined in this study. A causal research design was employed in this study. The study population comprises all the quoted manufacturing firms in Nigeria, of which 30 were purposively selected as a sample size from the manufacturing sector covering a period of 12 years ranging from 2010–2021. The data utilized for this study were obtained from the annual reports of the selected firms. Descriptive statistics and panel regression analysis were used to analyse the data. Audit attributes were measured with audit opinion, audit switching and audit tenure, whereas the dependent variables were proxy by discretionary accruals and audit fees. The outcome of the analysis discovered that audit opinion, audit switching and audit tenure all have negative and significant relationships with discretionary accrual evidenced by t-statistics (−2.36, −2.06, −3.24) and p-values of (0.018, 0.004, 0.002) correspondingly. Audit opinion also has a positive significant connection with audit fees. Likewise, audit switching and audit tenure have negative and significant relationships with audit fees, and they are all evidenced by t-statistics of (2.01, −2.70, −2.80) and p-values of (0.004, 0.007, 0.005), respectively. The study concludes that audit attributes are important in determining the extent of earnings management and audit report quality. The study recommends that companies should ensure that the auditor is not biased in his opinion because this will affect the quality of the audit report. Audit tenure and audit switching should also be done as when due.

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The Effect of Audit Firms Size, Leverage, Going Concern Opinion, Audit Tenure, on Audit Quality in Indonesia

Cited by 3 publications

References 27 publications

Impact of key audit matters (KAMs) reporting on audit quality: evidence from Thailand

Impact of key audit matters (KAMs) reporting on audit quality: evidence from Thailand

The Effects of Audit Firm Size, Audit Tenure, and Audit Rotation on Audit Quality

Influence of Audit Firm Attributes on Earnings Management and Audit Quality of Listed Nigeria Manufacturing Firms

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