THE EFFECT OF CONTROLLING SHAREHOLDERS AND CORPORATE GOVERNANCE ON AUDIT QUALITY

Vidyata Annisa Anafiah, Vera Diyanty, Ratna Wardhani

Abstract


This research aims to investigate the effect of controlling shareholders and the effectiveness of board of commissioners and audit committee on the audit quality measured by AQMS (Audit Quality Metric Score). This study uses companies listed in the Indonesian Stock Exchange as the sample. The results of this research provide evidence that alignment and entrenchment effect of the controlling shareholders have positive effect on audit quality. The alignment of interests between the controlling and non-controlling shareholders cause the company to appoint a high-quality auditor. The results also show that when companies face high entrenchment effect of the controlling shareholders, they still appoint a high-quality auditor to reduce the agency conflict and to maintain the company’s reputation. This research also shows that the effectiveness of board of commissioners and audit committee positively affect the audit quality.

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Penelitian ini bertujuan untuk menguji pengaruh pemegang saham pengendali serta efektivitas dewan komisaris dan komite audit terhadap kualitas audit yang diukur dengan AQMS (Audit Quality Metric Score). Penelitian ini menggunakan perusahaan yang terdaftar di Bursa Efek Indonesia sebagai sampel. Hasil penelitian ini memberikan bukti bahwa efek alignment dan entrenchment dari pemegang saham pengendali berpengaruh positif terhadap kualitas audit. Penyelarasan kepentingan antara pemegang saham pengendali dan pemegang saham non-pengendali menyebabkan perusahaan menunjuk auditor yang berkualitas tinggi. Hasil penelitian juga menunjukkan bahwa ketika perusahaan menghadapi efek entrenchment yang tinggi dari pemegang saham pengendali, perusahaan tetap menunjuk auditor yang berkualitas tinggi untuk mengurangi konflik agensi dan untuk mempertahankan reputasi perusahaan. Penelitian ini juga menunjukkan bahwa efektivitas dewan komisaris dan komite audit berpengaruh positif terhadap kualitas audit.


Keywords


alignment and entrenchment effect; audit quality; controlling shareholders; board of commissioners; audit committee; efek alignment dan entrenchment; kualitas audit; pemegang saham pengendali; dewan komisaris; komite audit

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DOI: http://dx.doi.org/10.21002/jaki.2017.01



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