ACCOUNTING & FINANCE CORNER
Sunday February 25th 2018

The Impact Audit Firm…-Dwi Martani

The Impact Audit Firm...-Dwi Martani

Fitriany, Sidharta Utama, Dwi Martani dan Hilda Rossieta

In Indonesia, rotation is not only applied to auditor but also to audit firm. This regulation creates quasi (unreal) rotation). This research purposes to examine whether there are any differences on audit quality between real and quasi audit firm rotation. This study will also examine whether the audit firm rotation from the big accounting firm to a non big accounting firm (or vice versa) will produce a different quality of audit. this paper will contribute to the country that will implement the rule of audit firm rotation, as the green paper stated that mandatory rotation of audit firms – not just of audit partners – should be considered. The audit quality is measured by earning quality (predictive value, timeliness, representational faithfulness and neutrality perspective). The sample data are taken from the public listed companies, from 1999-2001 (before the regulation) to 2004-2008 (after the regulation).

This research found that many audit firm use quasi rotation, but generally no evidences showing the difference of audit quality between real and quasi audit firm rotation. The rotation regulation has not given any impact to audit quality. Hence, it is necessary to consider other regulation to improve audit quality. In the pre regulation period, audit quality from predictability perspective of a company doing rotation from no Bid-4 firm to Big-4 firm is higher than a company doing rotation from non Big-4 to non Big-4 firm. On the other hand, the audit quality from timeliness perspective of a company doing rotation from non Big-4 to Big-4 is lower that company doing rotation from non Big-4 firm to non Big-4 firm. In the post-regulation period, this research proved that there are no differences in the audit quality between Big-4 and Non Big-4 related to the timeliness perspective. Nevertheless, there is still a difference in predictability perspective which Big-4 has higher quality.

Keywords: Audit Quality, real Audit Firm Rotation, Quasi Audit Firm Rotation.

The 12th Asian Academic Accounting Association,8 – 12 october 2011, Bali – Indonesia

Leave a Comment

Latest Topics

Materi Perpajakan 1

Berikut materi perpajakan 1 yang berisikan berdasarkan kurikulum yang ada di Fakultas Ekonomi dan Bisnis UI. Materi ini [Read More]

Analisis Laporan Keuangan

Analisis laporan keuangan merupakan kegiatan untuk mengartikan dan memberikan makna atas angka-angka dalam laporan [Read More]

PSAK 2017 dan Akuntansi Pemerintahan

Berikut materi PSAK 2017 dan Akuntansi Pemerintahan yang digunakan dalam traning di BPJS Ketenagakerjaan. salam [Read More]

Perkembangan PSAK dan Bagaimana Merisetnya

Berikut adalah slide update PSAK dan bagaimana meriset penerapn PSAK.   Penelitian PSAK 29112017 [Read More]

Mengenal Lebih Dekat dengan PSAK baru 71, 72, 73

Walaupun masih efektif berlaku 2020 tidak ada salahnya mengena PSAK tersebut sambil mengingat kembali PSAK yang [Read More]

Popular Topics

Dokumen Publikasi puisi

Pages

Insider

Archives