Audit Firm Tenure, Audit Firm Size and Audit Quality

2014 ◽  
Vol 2 (4) ◽  
pp. 69-76
Author(s):  
Padri Achyarsyah ◽  
Molina Molina
Keyword(s):  
Firm Size ◽  
Significant Influence ◽  
Audit Quality ◽  
Hypothesis Test ◽  
Professional Services ◽  
Primary Data ◽  
Accounting Firms ◽  
Client Engagement ◽  
Audit Firm ◽  
Client Relationship

Objective - The objective of this paper is to examine the effect of audit firm tenure and audit firm size on audit quality. This study applies explanatory research in which questionnaire and interviews serve as the primary data. The population of this study is public accounting firms which are registered in the Indonesian capital market. Methodology/Technique - The study presents a survey using professional auditors. The multiple regression methode is used to conduct an hypothesis test of the effect of audit firm tenure and audit firm size on audit quality. Findings - The result of study depicted that audit firm tenure has no significant influence on the audit quality, while the audit firm size has significant influence on the audit quality. Audit quality deteriorate, when the length of the audit firm client engagement is longer. No particular concern to audit firm size since the big audit firm size has extensive training for their staffs and sufficient system in place. Novelty - The study contributes to auditing literature in the areas of audit quality. The length of the audit firm client relationship and audit firm size always rise the contradiction to the audit quality. The audit firm tenure and audit firm size support previous study, additional insight are gained toward in the elections of the audit firm that serves professional services in capital markets. Type of Paper - Empirical Keywords: Audit Firm Tenure; Audit Firm Size; Audit Quality; Auditor

scholarly journals Pengaruh Independensi Auditor, Ukuran Kantor Akuntan Publik, dan Professional Judgement Auditor terhadap Kinerja Auditor

2018 ◽  
Vol 27 (2) ◽  
pp. 208-232
Author(s):  
Michelle Kristian
Keyword(s):  
Firm Size ◽  
Significant Influence ◽  
Audit Quality ◽  
Auditor Independence ◽  
Primary Data ◽  
Survey Method ◽  
Cpa Firm ◽  
One Year ◽  
Linear Regressions ◽  
Professional Judgement

The objective of this research was to examine the influence of auditor independence, CPA firm size, and auditor’s professional judgement on audit quality. The research was conducted using a survey method to provide the questionnaires to auditors in CPA firms. The data used in this research was primary data. The population of this research is the auditors that work at CPA firm. The sample of this research is auditors that work at CPA firm in Jakarta and Tangerang that have minimum one year of experience in auditing. There are 256 questionnaires distributed for this research, but only 216 questionnaires returned and 127 questionnaires are used in this research using multiple linear regressions. The results of this study were (1) Auditor independence has significant influence on quality, (2) CPA firm size doesn’t have significant influence on audit quality, (3) Auditor’s professional judgement has significant influence on audit quality, (4) Auditor independence, CPA firm size, and auditor’s professional judgement simultaneously have significant influence on auditor performance.  

scholarly journals PENGARUH TIME BUDGET PRESSURE, AUDIT TENURE DAN UKURAN KAP TERHADAP KUALITAS AUDIT

2021 ◽  
Vol 4 (2) ◽  
pp. 136-151
Author(s):  
Mohamad Alfi Amrulloh ◽  
Made Dudy Satyawan
Keyword(s):  
Firm Size ◽  
Audit Quality ◽  
Time Budget ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Financial Statement ◽  
Primary Data ◽  
Analysis Model ◽  
Audit Firm ◽  
Time Budget Pressure

In carrying out their duties, auditors must be competence and have to maintain their audit quality to provide trust to stakeholder. However, currently there are many cases that will causes the audit quality to decline. The cases is about financial cases that are still being discussed in public and have connection about audit quality on financial statement. The objective of this study was to determine effect of Time Budget Pressure, Audit Tenure and Audit Firm Size on Audit Quality. This study uses the primary data from questionnaire that was distributed to auditor KAP in Surabaya. Method determination sample used purposive sampling criteria and have 55 sample data can used. Data analysis model is multiple linear regression analysis. The result of this study indicate time budget pressure have positive effect on audit quality, but audit tenure and audit firm size has no effect on audit quality.

scholarly journals Influence of the Competency, Independency, Accountability and Audit Firm Size on Audit Quality

2019 ◽  
Vol 11 (1) ◽  
pp. 44
Author(s):  
Annisa Rahmawati ◽  
Dian Agustia ◽  
Yustrida Bernawati
Keyword(s):  
Firm Size ◽  
Latent Variables ◽  
Structural Equation ◽  
Audit Quality ◽  
Positive Impact ◽  
Financial Statement ◽  
Equation Modeling ◽  
Business Decisions ◽  
Accounting Firms ◽  
Audit Firm

Audited financial statement was an assurance for users of financial statement for the reliability of the information they use for making business decisions. Therefore, this study was intended to empirically examine the effect of competence, independence, accountability, and size of public accounting firms on audit quality. the hypothesis to was tested Structural Equation Modeling (SEM), which makes it possible to measure latent variables and hypothesis testing simultaneously. The result showed that competence had a positive impact on audit quality. Meanwhile, independency, accountability and audit firm size do not support the hypothesis.

Pengaruh Hubungan Politik Terhadap Manajemen Laba Pada Perusahaan Sektor Jasa Dengan Variabel Kontrol Ukuran Perusahaan Dan Kualitas Audit

2018 ◽  
Vol 16 (2) ◽  
pp. 30
Author(s):  
Dwikky Darmawan ◽  
Weny Putri
Keyword(s):  
Earnings Management ◽  
Firm Size ◽  
Significant Influence ◽  
Service Sector ◽  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Annual Reports ◽  
Political Connection ◽  
Discretionary Accrual

The purpose of this study is to determine the effects of political connection toward the earnings management of service sector companies with control variables firm size and audit quality. Firm�s political connection measured by using dummy variable. Earnings management is proxied by discretionary accrual which is measured by using Modified Jones Model. The research data applied in this study are the secondary data which are taken from the annual reports of service sector companies that listed in Indonesian Stock Exchange of 2016-2017 periods. There are 330 observations fit as sample, which are taken by using purposive sampling method. Data are processed by applying the multiple linear regression test. The result show that the political connection had positive but not significant influence to earnings management. Firm size had negative but not significant influence to earnings management. Whereas the audit quality had a negative and significant influence to earnings management.

Auditor Tenure and the Timeliness of Misstatement Discovery

2017 ◽  
Vol 93 (2) ◽  
pp. 315-338 ◽  
Author(s):  
Zvi Singer ◽  
Jing Zhang
Keyword(s):  
Natural Experiment ◽  
Audit Quality ◽  
Client Engagement ◽  
Audit Firm ◽  
Auditor Tenure ◽  
Sarbanes Oxley ◽  
Auditor Change ◽  
Negative Effect ◽  
Extended Analysis ◽  
Arthur Andersen

ABSTRACT Using the timeliness of misstatement discovery as a proxy for audit quality, we examine the association between audit firm tenure and audit quality in a setting that alleviates the endogeneity problem endemic to this line of research. We find that longer audit firm tenure leads to less timely discovery and correction of misstatements, which is consistent with a negative effect of long auditor tenure on audit quality. In addition, using the non-voluntary auditor change following the demise of Arthur Andersen in 2002 as a natural experiment, we show that the misstatements of its former clients were discovered faster than those of comparable companies that retained their auditors throughout the misstatement. This finding speaks to the benefit of a fresh look by a new auditor. An extended analysis shows that longer auditor tenure also leads to misstatements of greater magnitudes, and that the Sarbanes-Oxley Act has mitigated, but not eliminated, the negative effect of long auditor tenure. Last, we show that the negative association between auditor tenure and timely discovery of misstatements is mainly present in the first ten years of an audit engagement. Our study has implications for regulators who continue to express concern regarding lengthy auditor-client engagement. JEL Classifications: K22; K23; L51; M41; M42; M48.

scholarly journals DETERMINAN KUALITAS AUDIT DAN FAKTOR-FAKTOR YANG BERPENGARUH TERHADAP AUDITEE SATISFACTION (STUDI EMPIRIS PADA AUDITOR INTERNAL BANK UMUM SYARIAH DI INDONESIA)

2017 ◽  
Vol 14 (1) ◽  
pp. 27
Author(s):  
Hermi ,
Keyword(s):  
Structural Equation ◽  
Audit Quality ◽  
Primary Data ◽  
Validity And Reliability ◽  
Cross Sectional ◽  
Firm Reputation ◽  
Quality Audit ◽  
Audit Firm ◽  
Work Ethics ◽  
Service Portfolio

<p>The purpose of this study is to analyze the influence of Independence, Competence<br />and Islamic work Ethics partially and simultaneously to the Audit Quality . The next<br />purpose is to analyze the influence of Audit Quality, Audit Services Portfolio and Audit<br />Firm Reputation partially and simultaneously against Auditee Satisfaction on Islamic<br />Banks in Indonesia. This study is expected to provide benefit to the development of<br />knowledge, particularly in the field of accounting and auditing, Government, Islamic<br />Bank, Indonesian Institute of Accountants (IAI ), Indonesian Institute of Certified Public<br />Accountants (IAP ), the auditors and the Audit Firm (KAP). The results are expected to<br />provide information for various parties accurately and meaningfully as a solution to<br />determine the variables that affect the Auditee Satisfaction and Audit Quality at Islamic<br />Bank in Indonesia. Limitations of the study include: (1) The extent of the problem which<br />studied in determining the factors that can affect the Audit Quality and Auditee Satisfaction<br />in Islamic Bank in Indonesia , (2) Limitation of the study lies in the data acquisition, (3)<br />This study only emphasized the perception of the factors that may affect Audit Quality and<br />Auditee Satisfaction.<br />This study used primary data through questionnaires with the population of<br />internal auditors of Islamic Banks in Indonesia. This study used a quantitative approach<br />and in terms of the type of investigation, this study is causal. Based on the time horizon<br />the study is cross-sectional (one - shot ) because the data was collected only once . Before using the data to test hypothesis, the validity and reliability test should be done first.</p><p>Data analysis uses Structural Equation Model (SEM) supported by AMOS software.<br />Based on the test results, it shows that Independence, Competence and Islamic work<br />Ethics partially or simultaneously affect the Audit Quality significantly. The next stage of<br />testing Audit Quality partially has no significant effect on the Auditee Satisfaction. While<br />Audit Service Portfolio and Audit Firm Reputation either partially or simultaneously<br />have significant effect on the Auditee Satisfaction. Simultaneously the three variables<br />Audit Quality, and Audit Services Portfolio and Reputation of Audit Firm have<br />significant effect on the Auditee Satisfaction. .<br />Keywords: Independence, Competence, Islamic Work Ethics, Audit Quality, Audit Services<br />Portfolio, Audit Firm Reputation and Auditee Satisfaction.</p>

Does audit quality mediate the relationship between audit firm size and audit fees

2019 ◽  
Vol 6 (4) ◽  
pp. 279
Author(s):  
Ayman Bader ◽  
Mohammad Ebrahim Nawaiseh ◽  
Halla Noor Nawaiseh
Keyword(s):  
Firm Size ◽  
Audit Quality ◽  
Audit Fees ◽  
Audit Firm ◽  
The Relationship

scholarly journals Pengaruh Kompleksitas Tugas, Tekanan Anggaran Waktu Dan Pengalaman Auditor Terhadap Kualitas Audit

2019 ◽  
pp. 1231
Author(s):  
Ni Luh Dwi Ariestanti ◽  
Made Yenni Latrini
Keyword(s):  
Quantitative Research ◽  
Audit Quality ◽  
Task Complexity ◽  
Time Budget ◽  
Primary Data ◽  
Public Accounting ◽  
Accounting Firms ◽  
Analysis Technique ◽  
Time Budget Pressure ◽  
A Company

At this time competition between companies is increasing accompanied by various problems faced by companies in Indonesia. In dealing with this problem, the company managers need accountant services, especially public accounting services. Audit quality is one of the important things in approaching the existence of a company. This study aims to prove empirically the effect of task complexity, time budget pressure and auditor experience on audit quality. This research is associative quantitative research. The data used in this study is primary data obtained by distributing questionnaires to each auditor at 9 Public Accounting Firms (KAP) in Province of Bali. The analysis technique used in this study is multiple linear analysis. The test results aimed at task complexity have a negative and significant effect on audit quality. Time budget pressure has a positive and significant effect on audit quality. The auditor's experience has a positive and significant effect on audit quality. Keywords: Task complexity, time budget pressure, auditor experience, audit quality

Audit Firm Tenure and Fraudulent Financial Reporting

2004 ◽  
Vol 23 (2) ◽  
pp. 55-69 ◽  
Author(s):  
Joseph V. Carcello ◽  
Albert L. Nagy
Keyword(s):  
Financial Reporting ◽  
Audit Quality ◽  
Auditor Independence ◽  
Fraudulent Financial Reporting ◽  
Audit Firm ◽  
Auditor Tenure ◽  
Sarbanes Oxley ◽  
Client Relationship ◽  
Mandatory Audit Firm Rotation ◽  
The U.S

The Sarbanes-Oxley Act (2002) required the U.S. Comptroller General to study the potential effects of requiring mandatory audit firm rotation. The General Accounting Office (GAO) concludes in its recently released study of mandatory audit firm rotation that “mandatory audit firm rotation may not be the most efficient way to strengthen auditor independence” (GAO 2003, Highlights). However, the GAO also suggests that mandatory audit firm rotation could be necessary if the Sarbanes-Oxley Act's requirements do not lead to improved audit quality (GAO 2003, 5). We examine the relation between audit firm tenure and fraudulent financial reporting. Comparing firms cited for fraudulent reporting from 1990 through 2001 with both a matched set of non-fraud firms and with the available population of non-fraud firms, we find that fraudulent financial reporting is more likely to occur in the first three years of the auditor-client relationship. We fail to find any evidence that fraudulent financial reporting is more likely given long auditor tenure. Our results are consistent with the argument that mandatory audit firm rotation could have adverse effects on audit quality.

Sign in / Sign up

Export Citation Format

Share Document