Effectiveness of Corporate Governance and Audit Quality: The Role of Ownership Concentration as Moderation

Natasya Adela Widani, Yustrida Bernawati

Abstract


The case of corporate financial statement fraud committed by company management is a phenomenon that often occurs and occurs repeatedly. This condition is exacerbated by the involvement of external auditors to support the fraud. This study aims to determine the effect of corporate governance and audit quality and find out the ownership concentration moderating corporate governance and audit quality. This study uses moderated regression analysis and research samples on manufacturing companies listed on the Indonesia Stock Exchange in 2017-2018. The results of the study stated that corporate governance did not affect audit quality, and the presence of ownership concentration strengthened the effect of the effectiveness of corporate governance on audit quality. The implication of this research is to minimize earnings management practices. The effectiveness of corporate governance expects to run well and regulate the composition of ownership into something fundamental to implement.

JEL Classification: G32, G34

How to Cite:
Widani, N. A., & Bernawati, Y. (2020). Competitive Strategy Analysis to Increase Consumer Purchasing Decisions on Minimarket Business. Etikonomi: Jurnal Ekonomi, 19(1), 131 – 140. https://doi.org/10.15408/etk.v19i1.14893.



Keywords


Corporate Governance; Audit Quality; Ownership Concentration.

Full Text:

PDF

References


Abbott, L. J., & Parker, S. (2000). Auditor Selection and Audit Committee Characteristics. Auditing: A Journal of Practice & Theory, 19(2), 47-66.

Abbott, L. J., Parker, S., Peters, G. F., & Raghunandan, K. (2003). The Association Between Audit Committee Characteristics and Audit Fees. Auditing: A Journal of Practice & Theory, 22(2), 17-32.

Adams, R. B., Hermalin, B. E., & Weisbach, M. S. (2010). The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey. Journal of Economic Literature, 48(1), 58-107.

Adeyemi, S. B., & Fagbemi, T. O. (2010). Audit Quality, Corporate Governance and Firm Characteristics in Nigeria. International Journal of Business and Management, 5(5), 169-179.

Aggarwal, R. K., & Samwick, A. A. (2006). Empire-Builders and Shirkers: Investment, Firm Performance, and Managerial Incentives. Journal of Corporate Finance, 12(3), 489-515. https://doi.org/10.1016/j.jcorpfin.2006.01.001.

AlQadasi, A., & Abidin, S. (2018). The Effectiveness of Internal Corporate Governance and Audit Quality: The Role of Ownership Concentration–Malaysian Evidence. Corporate Governance, 18(2), 233-253. https://doi.org/10.1108/CG-02-2017-0043.

Al-Thuneibat, A. A., Tawfiq Ibrahim Al Issa, R., & Ata Baker, R. A. (2011). Do Audit Tenure and Firm Size Contribute to Audit Quality? Empirical Evidence from Jordan. Managerial Auditing Journal, 26(4), 317-334.

Awadallah, E. (2018). Measuring the Effectiveness of Selected Corporate Governance Practices and Their Implications for Audit Quality: Evidence from Qatar. Afro-Asian Journal of Finance and Accounting, 10(1), 24-47. https://doi.org/10.1504/AAJFA. 2020.10402.

Bédard, J., Chtourou, S. M., & Courteau, L. (2004). The Effect of Audit Committee Expertise, Independence, and Activity on Aggressive Earnings Management. Auditing: A Journal of Practice & Theory, 23(2), 13-35.

Cadbury, S. A. (2000). The Corporate Governance Agenda. Corporate Governance: An International Review, 8(1), 7-15.

Carcello, J. V., Hermanson, D. R., Neal, T. L., & Riley Jr, R. A. (2002). Board Characteristics and Audit Fees. Contemporary Accounting Research, 19(3), 365-384.

Dallas, G. S. (2004). Governance and Risk. New York: McGraw Hill Professional.

DeAngelo, L. E. (1981). Auditor Size and Audit Quality. Journal of Accounting and Economics, 3(3), 183-199.

DeFond, M. L., Hann, R. N., & Hu, X. (2005). Does The Market Value Financial Expertise on Audit Committees of Boards of Directors? Journal of Accounting Research, 43(2), 153-193.

Demsetz, H., & Villalonga, B. (2001). Ownership Structure and Corporate Performance. Journal of Corporate Finance, 7(3), 209-233.

Ejeagbasi, G., Nweze, A., Ezeh, E., & Nze, D. (2015). Corporate Governance and Audit Quality in Nigeria: Evidence from The Banking Industry. European Journal of Accounting, Auditing and Finance Research, 5(1), 18-39.

Gama, A. P. M., & Rodrigues, C. (2013). The Governance-Performance Relations in Publicly Listed Family Controlled Firms: an Empirical Analysis. Corporate Governance: The International Journal of Business in Society, 13(4), 439-456.

Hassan, M., Hassan, S., Iqbal, A., & Khan, M. F. A. (2014). Impact of Corporate Governance on Audit Fee: Empirical Evidence From Pakistan. World Applied Sciences Journal, 30(5), 645-651.

Henry, D. (2010). Agency Costs, Ownership Structure and Corporate Governance Compliance: A Private Contracting Perspective. Pacific-Basin Finance Journal, 18(1), 24-46. https://doi.org/10.1016/j.pacfin.2009.05.004.

Iqbal, S., Nawaz, A., & Ehsan, S. (2019). Financial Performance and Corporate Governance in Microfinance: Evidence from Asia. Journal of Asian Economics, 60, 1-13. https://doi.org/10.1016/j.asieco.2018.10.002.

Johl, S., Subramaniam, N., & Zain, M. M. (2012). Audit Committee and CEO Ethnicity and Audit Fees: Some Malaysian Evidence. The International Journal of Accounting, 47(3), 302-332.

Kikhia, H. Y. (2014). Board Characteristics, Audit Committee Characteristics, and Audit Fees: Evidence from Jordan. International Business Research, 7(12), 98.

Shleifer, A., & Vishny, R. W. (1986). Large Shareholders and Corporate Control. Journal of Political Economy, 94(3, Part 1), 461-488.

Wu, X. (2012). Corporate Governance and Audit Fees: Evidence From Companies Listed on The Shanghai Stock Exchange. China Journal of Accounting Research, 5(4), 321-342.




DOI: https://doi.org/10.15408/etk.v19i1.14893 Abstract - 0 PDF - 0

Refbacks

  • There are currently no refbacks.




Copyright (c) 2020 ETIKONOMI



 

/public/site/images/rianto-arif/logogaruda-kecil_94 Dimensions | The Next Evolution in Linked Scholarly Information  Academic Keyoa-library CrossRefMoraRefBASE-Search OAJI Open Archives Initiative

Hasil gambar untuk neliti.com

View My Stats

 

E-ISSN: 2461-0771 P-ISSN: 1412-8969 Free counters!

License

This work is licensed under CC BY-SA

© All rights reserved 2015.