An Analysis of The Effect of Corporate Characteristics and Auditor Characteristics on Audit Fee
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Aug 13, 2019
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Abstract
The title of this study is an analysis of the effect of corporate characteristics and auditor characteristics on the audit fee. The study aims to prove that the audit fee is influenced by the company characteristics (company size, business complexity, risk, profitability) and the manufacturing companies listed on the Stock Exchange in 2010-2014. The technique of sampling with purposive sampling obtains 88 companies, which is relevant to the multiple regression analysis tools. The results of this study indicate the significant effect among variables company size, the company profitability, and the auditor size toward the audit fee. However, the company’s complexity, the company’s risk, and audit tenure have no significant effect on the audit fee.
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Keywords
audit fees, complexity of the company, audit tenure, environmental performance and auditor size
References
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[21] Jubb, C.A., Houghton, K.A., Butterworth. S. (1996). Audit Fee Determinant: The Plural Nature of Risk. Managerial Auditing Journal Vol 11 (3), 25-40
[22] Khlif. H., Guidara, A. and Souissi, M. 2015. Corporate social and environmental disclosure and corporate performance Evidence from South Africa and Morocco. Journal of Accounting in Emerging Economies Vol. 5 (1), 51-69
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[24] Lindbolm, C.K. (1994). The implications of organizational legitimacy for corporate social performance and disclosure. Paper presented at the Critical Perspectives on Accounting Conference, New York.
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[26] Murwaningsari, E. 2009. Hubungan Corporate Governance, Corporate Social Responsibility, dan Corporate Financial Performance Dalam satu Continum. Jurnal Akuntansi dan Keuangan vol.11, (1). 30-41.
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[30] Ramzy, Wafaa Abdel Magid. 1988. The Determination of Audit Fees an Analytical Study. Desertasi. Department of Accounting and Finance Watt University.
[31] Ross. W.J. (2004) Corporate Finance Fundamentals, 8th edition, Mc.Graw-Hill, New York.
[32] Sarumpaet, Susi. 2005. The Relationship Between Environmental Performance And Financial Performance Of Indonesian Companies. Jurnal Akuntansi dan Keuangan (Accounting and Finance Journal), Vol. 7, (2), 89-98, Petra University, Surabaya, Indonesia
[33] Sawir, A. (2003) Financial Performance Analysis and Financial Planning Company. PT.Gramedia Pustaka. Jakarta, Indonesia.
[34] Scott, W. R. (2006). Financial Accounting Theory 5nd edltion. Prentice Hall Canada Inc.
[35] Shammari, Bader Al-., Yaqout, Abdullah Al- and Hussaini , Ahmad Al-. 2008. Determinants of audit fees in Kuwait. Journal of Academy of Business and Economic. Volume 8 ,Issue 1.
[36] Simunic, Dan A. 1980. The Pricing of Audit Services: Theory and Evidence. Journal of Accounting Research Volume 18 (1), 161-180.
[37] Sopian, A.M and Zahan M. 2013. Ownership Structure and Corporate Social Responsibility Disclosure in Bangladesh. International Journal of Economics and Financial Issues Vol. 3, (4), .901-909.
[38] Surat Keputusan Ketua Umum Institut Akuntan Publik Indonesia Nomor: KEP. 024/IAPI/VII/2008.
[39] Taylor, M & Simon, T. (1999). Determinant of Audit Fee: The Importance of Litigation, Disclosure and Regulatory Burdens in Audit Engagement in 20 Countries. The International Journal of Accounting. Vol 34(3), 375-388
[40] Titshabona,Ncube.2014.The Determinants of External Audit Fees in Zimbabwe Listed Companies. International Journal of Management Sciences and Business Research volume 3, Issue 10, Halaman 86-91.
[41] Tuan, N.P. 2012. An Empirical Study of Eirm Environmental and Financial Performance Evidence Ffrom Small and Medium Manufacturing Firm in Vietnam. Journal of Science Economics and Business vol. 28 (5E). 1-16
[42] UlHaq, Anwar dan Leghari ,Moazam Khan. 2015. Determinants of Audit Fee in Pakistan. Research Journal of Finance and Accounting Volume 6 (9), 176-188.
[43] Urhoghide,Ruth O. dan Izedonmi, O. I. 2015. An Empirical Investigation of Audit Fee Determinants in Nigeria. International Journal of Business and Social Research Volume 5 (8), 48-58.
[44] Usman, A. B. and Amran, N. A. B. (2015). Corporate social responsibility practice and corporate financial performance: evidence from Nigeria companies. Social Responsibility Journal, 11(4), 749-763.
[45] Watts Ross L. dan Zimmerman, Jerold L. 1990. Positive Accounting Theory: A Ten Years Perspective. The Accounting Review. Volume 65 (1), 131-156
www.klh.go.id
www.idx.co.id.
[2] Altman, Edward I. 2000. Predicting Financial Distress of Companies: Revisting the Z-Score and Zeta Models. Journal of Financial. Volume 23 (4),1-36
[3] Amba, Sekhar Muni dan Al-Hajeri, Fatima Khalid. 2015. Determinants of Audit Fees in Bahrain: An Empirical Study. Journal of Finance and Accountancy, 1-9.
[4] Baldacchino, Peter J., Attard, Miriam and Cassar, Frank. 2014. Factors Influencing External Audit Fees in Malta. Bank of Valletta Review Nomor 48, 26-40.
[5] Basioudis, I. G. and F. Fifi. 2004. The Market for Professional Services in Indonesia. International Journal of Auditing Volume 8 (2), 153-164.
[6] Brigham. F.E. and Houston. 2006. Basics of Financial Management. 6th edition. Salemba Empat, Jakarta, Indonesia.
[7] Carroll, A. B. and Shabana, K. M. (2010). The business case for corporate social responsibility: A review of concepts, research and practice. Journal of management reviews, vol.12(1), 85-105.
[8] Chariri, A. (2007) Social Critism. Research on use of Theory in Social Environmental disclousure. Journal of Maksi, vol. 8(2), 151 – 169.
[9] Chariri, A. and Ghozali, I. (2007). Accounting Theory, 3th edition, University of Diponegoro, Semarang, Indonesia.
[10] Chang, K. and Zhang, L. 2015. The Effects of Corporate Ownership Structure on Environmental Information Disclosure: Empirical Evidence from Unbalance Penal Data in Heavy Pollution Industries in China. Issue, vol. 10(1), 405-414
[11] Dowling, J. and Pfeffer, J. (1975). Organizational legitimacy: social values and organizational behavior. Pacific Sociological Review, 18(1), 122-136.
[12] Deegan, C. (2002). The legitimizing effect of social and environmental disclosures: a theoretical foundation. Accounting, Auditing and Accountability Journal, 15(3), 282-311.
[13] Earnhart. D, Lubomir, L. 2006. Effect of Ownership and Financial Performance on Corporate Environmental Performance. Journal of Comparative Economic. Vol. 34 (1), 111-129
[14] El-Gammal, G. 2012. Determinant of Audit Fee: Evidence from Lebanon. International Business Research. Vol 5 (11), 136-145
[15] Freeman, R.E. 1984. Strategic Management, A Stakeholder Approach, Pitman Publishing Inc, Massachusetts
[16] Godfrey, Jayne., Hodgson, Allan., Tarca, Ann., Hamilton, Jane dan Holmes, Scott. 2010. Accounting Theory. John Wiley & Sons Australia: Milton.
[17] Gujarati, D. N. and Porter, D.C. (2003). Basic Econometrics, 4th edition, Mc.Graw-Hill, New York, USA.
[18] Gray, R., Kouhy, R. and Lavers, S. (1995), Corporate Social And Environmental Reporting: A Review Of The Literature and A Longitudinal Study Of Uk Disclosure”, Accounting, Auditing & Accountability Journal, Vol. 8 (2), 47-77.
[19] Jensen, M.C. and Meckling, W.H. (1976). Theory of The Firm Managerial Behaviour, Agency Cost and Ownwrship Structure. Journal of Economics, 3(4), 305-360
[20] Joshi, P.L & Al-Batsaki, H. (2000). Determinant of Audit Fees: Evidence from The Companies Listed in Bahrain. International Journal of Auditing, 4(2),129-139
[21] Jubb, C.A., Houghton, K.A., Butterworth. S. (1996). Audit Fee Determinant: The Plural Nature of Risk. Managerial Auditing Journal Vol 11 (3), 25-40
[22] Khlif. H., Guidara, A. and Souissi, M. 2015. Corporate social and environmental disclosure and corporate performance Evidence from South Africa and Morocco. Journal of Accounting in Emerging Economies Vol. 5 (1), 51-69
[23] Kikhia, Yahia. 2015. Determination of Audit Fees: Evidence from Jordan. Accounting and Finance Research Volume 1 (1), 42-53.
[24] Lindbolm, C.K. (1994). The implications of organizational legitimacy for corporate social performance and disclosure. Paper presented at the Critical Perspectives on Accounting Conference, New York.
[25] Meyer, J. and Rowan. (1977). Institutional organizations: formal structure as myth and ceremony. American Journal of Sociology, 82(2), 340-363.
[26] Murwaningsari, E. 2009. Hubungan Corporate Governance, Corporate Social Responsibility, dan Corporate Financial Performance Dalam satu Continum. Jurnal Akuntansi dan Keuangan vol.11, (1). 30-41.
[27] Naila, L and Daniel. 2013. The Effect of Enveronmental Regulation on Financial Performance in Tanzania A Survey of Manufacturing Companies Quoted on the Dar Es Salaam Stock Exchange. International Journal of Economics anfd Financial Issues, vol. 2 (1), 95-112
[28] Ng, David S. 1978. An Information Analysis of Financial Reporting and External Auditing. The Accounting Review. Volume 53 Nomor 4 Halaman 910-920.
[29] Preston, L. E. and Post J.E. (1975). Private Management and Public Policy. Englewood Cliffs, 15th edition, N.J. Pretice-Hall, Chicago.
[30] Ramzy, Wafaa Abdel Magid. 1988. The Determination of Audit Fees an Analytical Study. Desertasi. Department of Accounting and Finance Watt University.
[31] Ross. W.J. (2004) Corporate Finance Fundamentals, 8th edition, Mc.Graw-Hill, New York.
[32] Sarumpaet, Susi. 2005. The Relationship Between Environmental Performance And Financial Performance Of Indonesian Companies. Jurnal Akuntansi dan Keuangan (Accounting and Finance Journal), Vol. 7, (2), 89-98, Petra University, Surabaya, Indonesia
[33] Sawir, A. (2003) Financial Performance Analysis and Financial Planning Company. PT.Gramedia Pustaka. Jakarta, Indonesia.
[34] Scott, W. R. (2006). Financial Accounting Theory 5nd edltion. Prentice Hall Canada Inc.
[35] Shammari, Bader Al-., Yaqout, Abdullah Al- and Hussaini , Ahmad Al-. 2008. Determinants of audit fees in Kuwait. Journal of Academy of Business and Economic. Volume 8 ,Issue 1.
[36] Simunic, Dan A. 1980. The Pricing of Audit Services: Theory and Evidence. Journal of Accounting Research Volume 18 (1), 161-180.
[37] Sopian, A.M and Zahan M. 2013. Ownership Structure and Corporate Social Responsibility Disclosure in Bangladesh. International Journal of Economics and Financial Issues Vol. 3, (4), .901-909.
[38] Surat Keputusan Ketua Umum Institut Akuntan Publik Indonesia Nomor: KEP. 024/IAPI/VII/2008.
[39] Taylor, M & Simon, T. (1999). Determinant of Audit Fee: The Importance of Litigation, Disclosure and Regulatory Burdens in Audit Engagement in 20 Countries. The International Journal of Accounting. Vol 34(3), 375-388
[40] Titshabona,Ncube.2014.The Determinants of External Audit Fees in Zimbabwe Listed Companies. International Journal of Management Sciences and Business Research volume 3, Issue 10, Halaman 86-91.
[41] Tuan, N.P. 2012. An Empirical Study of Eirm Environmental and Financial Performance Evidence Ffrom Small and Medium Manufacturing Firm in Vietnam. Journal of Science Economics and Business vol. 28 (5E). 1-16
[42] UlHaq, Anwar dan Leghari ,Moazam Khan. 2015. Determinants of Audit Fee in Pakistan. Research Journal of Finance and Accounting Volume 6 (9), 176-188.
[43] Urhoghide,Ruth O. dan Izedonmi, O. I. 2015. An Empirical Investigation of Audit Fee Determinants in Nigeria. International Journal of Business and Social Research Volume 5 (8), 48-58.
[44] Usman, A. B. and Amran, N. A. B. (2015). Corporate social responsibility practice and corporate financial performance: evidence from Nigeria companies. Social Responsibility Journal, 11(4), 749-763.
[45] Watts Ross L. dan Zimmerman, Jerold L. 1990. Positive Accounting Theory: A Ten Years Perspective. The Accounting Review. Volume 65 (1), 131-156
www.klh.go.id
www.idx.co.id.
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How to Cite
Evana, E., Farichah, F., Mirfazli, E., Idris, A. Z., & Tudor, A. T. (2019). An Analysis of The Effect of Corporate Characteristics and Auditor Characteristics on Audit Fee. International Journal of Economics, Business, and Entrepreneurship, 2(1), 13-26. https://doi.org/10.23960/ijebe.v2i1.51
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