The Effect Of Company Size, Complexity Of Company Operations, Company Profit And Loss, And Solvency, Against Audit Delay With KAP Size As A Moderating Variable In Manufacturing Companies On The Indonesia Stock Exchange
The Effect of Company Size, Complexity of Operations, Profit and Loss, and Solvency on Audit Delay: Analysis with KAP Size as a Moderating Variable
Introduction
The audit process is a crucial aspect of a company's financial management, as it provides stakeholders with an independent assessment of the company's financial statements. However, the audit process can be time-consuming and complex, particularly for large and complex companies. In this study, we aim to examine the effect of company size, the complexity of the company's operations, profit and loss, and solvency on audit delay, with the size of a Public Accountant Firm (KAP) as a moderation variable in manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2009-2018 period.
Background
Audit delay is a significant issue in the auditing profession, as it can lead to delays in the release of financial statements, which can have a negative impact on the company's reputation and financial performance. Several factors can contribute to audit delay, including company size, complexity of operations, profit and loss, and solvency. Company size can affect the audit process, as larger companies tend to have more complex financial systems and processes, which can make it more difficult for auditors to complete their duties. The complexity of the company's operations can also impact the audit process, as it can make it more challenging for auditors to understand the company's financial systems and processes.
Methodology
This study uses a causal associative research method with secondary data taken through purposive sampling technique. The data analysis is carried out using panel data regression to identify the relationship between the variables. The study focuses on manufacturing companies listed on the IDX during the 2009-2018 period.
Results
The results of this study show that company size has a negative and significant influence on audit delay. This means that the greater the company size, the time needed to complete the audit tends to be faster. Large companies usually have a more organized system and process, making it easier for auditors to complete their duties.
On the other hand, the complexity of the company's operations showed a positive but insignificant influence on audit delay. The complexity in the company's operations can make the audit process more complicated, but in this study, the effect is not strong enough to significantly influence the audit time. This may be caused by the auditor's ability to overcome the complexity.
The company's profit or loss also has a negative and significant influence on audit delay. Companies that record losses may be faster to complete the audit process in order to immediately identify existing problems, while companies that record profits tend to be slower because the audit process is more complicated and requires more attention.
Solvency, which shows the company's ability to fulfill its long-term obligations, has a positive but not significant effect on audit delay. Although good solvency should increase auditor confidence in the company, its effect on audit time is not strong enough to influence the overall audit results.
Moderating Variable
In addition, this study found that the size of the KAP serves as a moderating variable in the relationship between company size, the complexity of the company's operations, and solvency of the audit delay. This shows that the role of KAP in managing audits in large and complex companies is very important. However, the size of the KAP does not moderate the relationship between the company's profit and loss and audit delay, which indicates that the auditor is not affected by the performance of profit and loss in terms of audit time.
Conclusion
The results of this study provide important insights for manufacturing companies and auditors to understand the factors that influence audit time. Company management must consider their operational size and complexity to optimize the audit process and improve efficiency. For auditors, understanding of the influence of these variables can help in more effective planning and audit implementation.
Implications
The findings of this study have several implications for manufacturing companies and auditors. Firstly, company management must consider their operational size and complexity to optimize the audit process and improve efficiency. This can be achieved by implementing a more organized system and process, which can make it easier for auditors to complete their duties. Secondly, auditors must understand the influence of these variables on audit time, which can help in more effective planning and audit implementation.
Limitations
This study has several limitations. Firstly, the study only focuses on manufacturing companies listed on the IDX during the 2009-2018 period. Secondly, the study uses secondary data, which may not be comprehensive or accurate. Finally, the study only examines the effect of company size, complexity of operations, profit and loss, and solvency on audit delay, without considering other factors that may influence audit delay.
Future Research Directions
Future research can build on the findings of this study by examining the effect of other factors on audit delay, such as the company's industry, market size, and auditor experience. Additionally, future research can explore the impact of audit delay on the company's financial performance and reputation.
References
- [List of references cited in the study]
Appendix
- [Appendix containing additional information, such as tables and figures]
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Frequently Asked Questions: The Effect of Company Size, Complexity of Operations, Profit and Loss, and Solvency on Audit Delay
Q: What is audit delay, and why is it important?
A: Audit delay refers to the time it takes for an auditor to complete an audit of a company's financial statements. It is an important issue in the auditing profession, as it can lead to delays in the release of financial statements, which can have a negative impact on the company's reputation and financial performance.
Q: What are the factors that influence audit delay?
A: The factors that influence audit delay include company size, complexity of operations, profit and loss, and solvency. These factors can affect the audit process, making it more or less complicated for auditors to complete their duties.
Q: How does company size affect audit delay?
A: Company size has a negative and significant influence on audit delay. This means that the greater the company size, the time needed to complete the audit tends to be faster. Large companies usually have a more organized system and process, making it easier for auditors to complete their duties.
Q: How does the complexity of operations affect audit delay?
A: The complexity of operations showed a positive but insignificant influence on audit delay. The complexity in the company's operations can make the audit process more complicated, but in this study, the effect is not strong enough to significantly influence the audit time. This may be caused by the auditor's ability to overcome the complexity.
Q: How does profit and loss affect audit delay?
A: The company's profit or loss also has a negative and significant influence on audit delay. Companies that record losses may be faster to complete the audit process in order to immediately identify existing problems, while companies that record profits tend to be slower because the audit process is more complicated and requires more attention.
Q: How does solvency affect audit delay?
A: Solvency, which shows the company's ability to fulfill its long-term obligations, has a positive but not significant effect on audit delay. Although good solvency should increase auditor confidence in the company, its effect on audit time is not strong enough to influence the overall audit results.
Q: What is the role of KAP in managing audits in large and complex companies?
A: The size of the KAP serves as a moderating variable in the relationship between company size, the complexity of the company's operations, and solvency of the audit delay. This shows that the role of KAP in managing audits in large and complex companies is very important.
Q: What are the implications of this study for manufacturing companies and auditors?
A: The findings of this study have several implications for manufacturing companies and auditors. Firstly, company management must consider their operational size and complexity to optimize the audit process and improve efficiency. Secondly, auditors must understand the influence of these variables on audit time, which can help in more effective planning and audit implementation.
Q: What are the limitations of this study?
A: This study has several limitations. Firstly, the study only focuses on manufacturing companies listed on the IDX during the 2009-2018 period. Secondly, the study uses secondary data, which may not be comprehensive or accurate. Finally, the study only examines the effect of company size, complexity of operations, profit and loss, and solvency on audit delay, without considering other factors that may influence audit delay.
Q: What are the future research directions?
A: Future research can build on the findings of this study by examining the effect of other factors on audit delay, such as the company's industry, market size, and auditor experience. Additionally, future research can explore the impact of audit delay on the company's financial performance and reputation.
Q: What are the practical implications of this study for auditors and company management?
A: The practical implications of this study are that auditors and company management must consider the factors that influence audit delay, such as company size, complexity of operations, profit and loss, and solvency. By understanding these factors, auditors and company management can optimize the audit process and improve efficiency.
Q: What are the policy implications of this study?
A: The policy implications of this study are that regulatory bodies and standard-setting organizations must consider the factors that influence audit delay when developing auditing standards and regulations. By taking into account these factors, regulatory bodies and standard-setting organizations can develop more effective auditing standards and regulations that promote audit efficiency and effectiveness.