Risk Management Committee, Auditor Choice and Audit Fees

We find that risk management committees and BIG4 audit firms contribute to audit fees. We use observations of 895 companies registered in Indonesia for 2014–2018, and to answer our hypothesis we used ordinary least squares analysis. The results show that BIG4 weakens the relationship between RMC and...

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Main Authors: Iman Harymawan, -, Aditya Aji Prabhawa, -, Mohammad Nasih, -, Fajar Kristanto Gautama Putra, -
格式: Article PeerReviewed
語言:English
Indonesian
English
English
English
Indonesian
出版: Multidisciplinary Digital Publishing Institute (MDPI) 2021
主題:
在線閱讀:https://repository.unair.ac.id/113398/3/Iman%20Harymawan_Artikel104_Risk%20Management.pdf
https://repository.unair.ac.id/113398/4/Iman%20Harymawan_Peer%20Review104.pdf
https://repository.unair.ac.id/113398/5/Iman%20H_Similarity104_Risk%20management.pdf
https://repository.unair.ac.id/113398/8/Iman%20H_Korespondensi104%20Risk%20Management.pdf
https://repository.unair.ac.id/113398/10/MohNasih_Similarity115_Risk-Management-Committee.pdf
https://repository.unair.ac.id/113398/11/MohNasih_KualitasKaril115.pdf
https://repository.unair.ac.id/113398/
https://www.mdpi.com/2227-9091/9/9/156
https://doi.org/10.3390/risks9090156
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機構: Universitas Airlangga
語言: English
Indonesian
English
English
English
Indonesian
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總結:We find that risk management committees and BIG4 audit firms contribute to audit fees. We use observations of 895 companies registered in Indonesia for 2014–2018, and to answer our hypothesis we used ordinary least squares analysis. The results show that BIG4 weakens the relationship between RMC and audit fees. Our study proves that higher demand for audit coverage will occur if there is a risk management committee within the company. As a result, audit fees increase. RMC may demand high-quality external guarantees, but the presence of BIG4 as a moderating variable reduces the relationship between the two variables. We assume that this can happen because auditors can work more efficiently if the company has an RMC, auditor(s) could indirectly reduce the risk because it is partially results from the performance of the RMC. In addition, we also use the robustness test to handle the endogeneity problem with consistent results as OLS. These findings provide evidence for policy makers about the relationship between audit fees and risk management committees.