The Effect Of Company Size, Profitability, Audit Opinion And Auditor's Reputation On Audit Delay In Banking Companies Listed On The Indonesia Stock Exchange
The Effect of Company Size, Profitability, Audit Opinion, and Auditor's Reputation on Audit Delay in Banking Companies Listed on the Indonesia Stock Exchange
Introduction
The Indonesia Stock Exchange (IDX) is one of the largest stock exchanges in Southeast Asia, with a significant number of banking companies listed on it. The audit process is a crucial aspect of a company's financial reporting, and audit delays can have a significant impact on the company's financial performance and investor confidence. This study aims to investigate the effect of company size, profitability, audit opinion, and auditor's reputation on audit delays in banking companies listed on the IDX in the 2011-2013 period.
Literature Review
Audit delay is a critical issue in the auditing profession, and several studies have investigated its causes and consequences. Previous studies have identified various factors that can affect audit delay, including company size, profitability, audit opinion, and auditor's reputation. However, the relationship between these factors and audit delay is not yet fully understood, and more research is needed to confirm the findings of previous studies.
Methodology
This study uses a hypothesis approach with the population of all banking companies listed on the IDX in the 2011-2013 period. The sampling technique used was purposive sampling with a total sample of 26 companies. The data used in this study is secondary data, which was collected from various sources, including the IDX and the companies' annual reports. Data analysis is carried out using multiple regression analysis.
Results
The results of this study show that simultaneously, all independent variables have a positive and significant effect on the dependent variable. Partially, only the size of the company and audit opinion have a negative and significant effect on audit delays. The auditor's reputation has a negative effect, but it is not significant to the delay in the audit. Profitability has a positive effect, but it is not significant to the delay in audit.
Deeper Analysis
Company Size
The results of this study show that larger companies tend to experience lower audit delays. This can be explained because large companies usually have a more complex organizational structure and have more adequate resources to support the audit process. This finding is consistent with previous studies that have found a negative relationship between company size and audit delay.
Profitability
The results of this study showed that profitability had no significant effect on audit delays. This may be caused by other factors that are more dominant in determining the time of audit settlement, such as business complexity and banking regulation. This finding is consistent with previous studies that have found a positive relationship between profitability and audit delay.
Audit Opinion
This study found that audit opinion had a negative and significant effect on audit delays. That is, companies that receive a fair audit opinion without exception (WDP) tend to experience lower audit delays compared to companies that receive modified audit opinion. This shows that the auditor completes the audit of the company with better financial performance.
Auditor's Reputation
The auditor's reputation has a negative effect, but it is not significant to the delay in the audit. This shows that although the auditor's reputation can affect investor perception, it does not significantly affect the audit settlement time.
Practical Implications
The results of this study have practical implications that are important for various parties, such as:
Company Management
The results of this study can be used as a consideration in planning the audit process and ensuring the completion of the audit on time.
Auditor
This research can assist the auditor in understanding the factors that can affect the audit completion time and improve the efficiency of the audit process.
Investor
The results of this study can assist investors in assessing the risk of audit delays and making more appropriate investment decisions.
Limitations
This research has several limitations, such as the limited research period and the number of samples. Further research with a longer period and a larger sample can be done to confirm the results of this study.
Conclusion
This study shows that company size and audit opinion are significant factors in determining audit delays in banking companies. These results can be used as consideration for various parties to improve the efficiency of the audit process and reduce the risk of delays in audit in the future.
Recommendations
Based on the findings of this study, the following recommendations are made:
- Company management should consider the size of the company and audit opinion when planning the audit process.
- Auditors should consider the size of the company and audit opinion when conducting the audit.
- Investors should consider the size of the company and audit opinion when making investment decisions.
Future Research Directions
This study has several limitations, and further research is needed to confirm the findings of this study. Some potential future research directions include:
- Investigating the effect of other factors on audit delay, such as business complexity and banking regulation.
- Conducting a study with a longer period and a larger sample.
- Investigating the effect of audit delay on financial performance and investor confidence.
References
- [List of references cited in the study]
Appendices
- [Appendices, including additional tables and figures]
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Frequently Asked Questions (FAQs) about the Effect of Company Size, Profitability, Audit Opinion, and Auditor's Reputation on Audit Delay in Banking Companies Listed on the Indonesia Stock Exchange
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 because audit delay can affect a company's financial performance, investor confidence, and reputation.
Q: What are the factors that affect audit delay?
A: The factors that affect audit delay include company size, profitability, audit opinion, and auditor's reputation. This study investigates the effect of these factors on audit delay in banking companies listed on the Indonesia Stock Exchange.
Q: What is the relationship between company size and audit delay?
A: The results of this study show that larger companies tend to experience lower audit delays. This is because large companies usually have a more complex organizational structure and have more adequate resources to support the audit process.
Q: What is the relationship between profitability and audit delay?
A: The results of this study show that profitability had no significant effect on audit delays. This may be caused by other factors that are more dominant in determining the time of audit settlement, such as business complexity and banking regulation.
Q: What is the relationship between audit opinion and audit delay?
A: The results of this study show that audit opinion had a negative and significant effect on audit delays. That is, companies that receive a fair audit opinion without exception (WDP) tend to experience lower audit delays compared to companies that receive modified audit opinion.
Q: What is the relationship between auditor's reputation and audit delay?
A: The results of this study show that the auditor's reputation has a negative effect, but it is not significant to the delay in the audit. This shows that although the auditor's reputation can affect investor perception, it does not significantly affect the audit settlement time.
Q: What are the practical implications of this study?
A: The results of this study have practical implications for various parties, including company management, auditors, and investors. Company management can use the results of this study to plan the audit process and ensure the completion of the audit on time. Auditors can use the results of this study to understand the factors that can affect the audit completion time and improve the efficiency of the audit process. Investors can use the results of this study to assess the risk of audit delays and make more appropriate investment decisions.
Q: What are the limitations of this study?
A: This study has several limitations, including the limited research period and the number of samples. Further research with a longer period and a larger sample can be done to confirm the results of this study.
Q: What are the future research directions?
A: Some potential future research directions include investigating the effect of other factors on audit delay, such as business complexity and banking regulation, conducting a study with a longer period and a larger sample, and investigating the effect of audit delay on financial performance and investor confidence.
Q: What are the implications of this study for the auditing profession?
A: The results of this study have implications for the auditing profession, including the need for auditors to consider the size of the company and audit opinion when conducting the audit. The study also highlights the importance of auditor's reputation in affecting investor perception, but not significantly affecting the audit settlement time.
Q: What are the implications of this study for company management?
A: The results of this study have implications for company management, including the need to consider the size of the company and audit opinion when planning the audit process. The study also highlights the importance of ensuring the completion of the audit on time to avoid audit delays.
Q: What are the implications of this study for investors?
A: The results of this study have implications for investors, including the need to assess the risk of audit delays and make more appropriate investment decisions. The study also highlights the importance of considering the size of the company and audit opinion when making investment decisions.
Q: What are the implications of this study for the Indonesia Stock Exchange?
A: The results of this study have implications for the Indonesia Stock Exchange, including the need to consider the size of the company and audit opinion when listing companies on the exchange. The study also highlights the importance of ensuring the completion of the audit on time to avoid audit delays.
Note: The above article is a Q&A article that answers common questions about the effect of company size, profitability, audit opinion, and auditor's reputation on audit delay in banking companies listed on the Indonesia Stock Exchange. The article is divided into sections, with headings and subheadings to make it easier to read and understand.