The Influence Of Auditor Characteristics, The Type Of Company Ownership, Complexity, And Company Size On The Determination Of Audit Fees In Banking Companies Listed On The Indonesia Stock Exchange,

by ADMIN 198 views

The Influence of Auditor Characteristics, Company Ownership, Complexity, and Company Size on the Determination of Audit Fees in Banking Companies Listed on the Indonesia Stock Exchange

Introduction

The determination of audit fees in banking companies is a crucial aspect of ensuring the transparency and accountability of these institutions. As the banking sector plays a vital role in the economy, it is essential to understand the factors that influence the audit fees of these companies. This study aims to identify the factors that affect the determination of audit fees in banking companies listed on the Indonesia Stock Exchange (IDX) during the 2010-2013 period.

Factors that Influence the Determination of Audit Fees

The factors studied in this research include auditor characteristics, company ownership types, company complexity, and company size. These factors are crucial in determining the audit fees of banking companies, as they can impact the quality of the audit and the transparency of the company's financial statements.

Auditor Characteristics

Auditor characteristics refer to the qualities and attributes of the auditor that can influence the audit fees. These characteristics include the auditor's reputation, expertise, and experience. The results of this study show that auditor characteristics do not have a significant influence on the audit fees. This may be due to the dominance of Big Four auditors in Indonesia, strict audit standards, and strict regulations.

Company Ownership Type

Company ownership type refers to the structure of ownership of the company, including the percentage of ownership held by institutional and individual shareholders. The results of this study show that company ownership type does not have a significant influence on the audit fees. This may be due to the homogeneity of the ownership structure of banking companies in Indonesia, which are generally dominated by institutional shareholders.

Company Complexity

Company complexity refers to the level of complexity of the company's operations, including the number of subsidiaries, branches, and products offered. The results of this study show that company complexity does not have a significant influence on the audit fees. This may be due to a lack of appropriate measurements of company complexity in this study.

Company Size

Company size refers to the total assets, revenue, and number of employees of the company. The results of this study show that company size has a significant influence on the audit fees. The greater the company size, the higher the audit fees tend to be. This is in accordance with the agent's theory, which states that large companies need auditors with higher reputation and expertise, resulting in higher audit fees.

Implications for Stakeholders

The results of this study have implications for regulators, companies, and auditors.

For Regulators

Regulators need to consider the results of this study in preparing regulations related to the determination of audit fees, especially related to company size as a factor that has proven to have a significant effect. Regulators also need to consider how to improve the quality of audit and transparency in the Indonesian capital market.

For Companies

Banking companies need to understand the factors that influence the audit fees, so that they can negotiate properly with the auditor. The company also needs to pay attention to aspects of transparency and accountability in company management.

For Auditors

Auditors need to understand the factors that influence the audit fees, as well as the importance of maintaining reputation and improving audit quality.

Limitations of the Study

This research has several limitations. Firstly, it only focuses on banking companies listed on the IDX during the 2010-2013 period. The results of this study may not be generalized to companies in other sectors or different periods. Secondly, this research has limitations in measuring the complexity of the company. Further research needs to be done by considering other factors that might affect the audit, such as audit risk and economic conditions.

Conclusion

In conclusion, this study aims to identify the factors that influence the determination of audit fees in banking companies listed on the IDX during the 2010-2013 period. The results of this study show that company size has a significant influence on the audit fees, while auditor characteristics, company ownership type, and company complexity do not have a significant influence. The implications of this study are significant for regulators, companies, and auditors, and highlight the need for further research in this area.

References

Future Research Directions

Future research directions include:

  • Investigating the impact of audit risk on audit fees
  • Examining the effect of economic conditions on audit fees
  • Considering the influence of other factors, such as industry type and company performance, on audit fees
  • Conducting a longitudinal study to examine the changes in audit fees over time

By exploring these research directions, we can gain a deeper understanding of the factors that influence audit fees and improve the quality of audit and transparency in the Indonesian capital market.
Frequently Asked Questions (FAQs) about the Influence of Auditor Characteristics, Company Ownership, Complexity, and Company Size on the Determination of Audit Fees in Banking Companies Listed on the Indonesia Stock Exchange

Q: What is the main objective of this study?

A: The main objective of this study is to identify the factors that influence the determination of audit fees in banking companies listed on the Indonesia Stock Exchange (IDX) during the 2010-2013 period.

Q: What are the factors studied in this research?

A: The factors studied in this research include auditor characteristics, company ownership types, company complexity, and company size.

Q: What is the significance of auditor characteristics in determining audit fees?

A: Auditor characteristics refer to the qualities and attributes of the auditor that can influence the audit fees. However, the results of this study show that auditor characteristics do not have a significant influence on the audit fees.

Q: What is the significance of company ownership type in determining audit fees?

A: Company ownership type refers to the structure of ownership of the company, including the percentage of ownership held by institutional and individual shareholders. However, the results of this study show that company ownership type does not have a significant influence on the audit fees.

Q: What is the significance of company complexity in determining audit fees?

A: Company complexity refers to the level of complexity of the company's operations, including the number of subsidiaries, branches, and products offered. However, the results of this study show that company complexity does not have a significant influence on the audit fees.

Q: What is the significance of company size in determining audit fees?

A: Company size refers to the total assets, revenue, and number of employees of the company. The results of this study show that company size has a significant influence on the audit fees. The greater the company size, the higher the audit fees tend to be.

Q: What are the implications of this study for regulators?

A: The results of this study have implications for regulators, who need to consider the factors that influence the determination of audit fees, especially related to company size as a factor that has proven to have a significant effect. Regulators also need to consider how to improve the quality of audit and transparency in the Indonesian capital market.

Q: What are the implications of this study for companies?

A: The results of this study have implications for companies, who need to understand the factors that influence the audit fees, so that they can negotiate properly with the auditor. The company also needs to pay attention to aspects of transparency and accountability in company management.

Q: What are the implications of this study for auditors?

A: The results of this study have implications for auditors, who need to understand the factors that influence the audit fees, as well as the importance of maintaining reputation and improving audit quality.

Q: What are the limitations of this study?

A: This research has several limitations, including the fact that it only focuses on banking companies listed on the IDX during the 2010-2013 period. The results of this study may not be generalized to companies in other sectors or different periods. Additionally, this research has limitations in measuring the complexity of the company.

Q: What are the future research directions?

A: Future research directions include investigating the impact of audit risk on audit fees, examining the effect of economic conditions on audit fees, considering the influence of other factors, such as industry type and company performance, on audit fees, and conducting a longitudinal study to examine the changes in audit fees over time.

Q: What are the benefits of this study?

A: The benefits of this study include providing insights into the factors that influence the determination of audit fees in banking companies listed on the IDX, which can help regulators, companies, and auditors to make informed decisions. Additionally, this study can contribute to the development of audit standards and regulations in Indonesia.

Q: What are the potential applications of this study?

A: The potential applications of this study include informing audit fee setting policies, improving audit quality, and enhancing transparency and accountability in the Indonesian capital market.