The Effect of Audit Fee and Audit Tenure on Audit Quality of Public Accounting Firms in Makassar with Auditor Independence as a Mediating Variable

Gaffar Gaffar, Muhammad Ichsan Gaffar, Melinda Ibrahim

Abstract


This study aims at finding the effect performed by audit fees and audit tenures on audit quality mediated by auditor independence. This study applies a quantitative research method. The population in this study covers seven public accounting firms covering 61 auditors willing to fill out the questionnaires. The analytical technique used in this study is path analysis. The results of this study indicate that audit fee has a negative and significant effect on audit quality and auditor independence.  The audit tenure positively and significantly affects audit quality and audit independence.  Auditor independence mediates the audit fees on audit quality.  In addition, auditor independence mediates audit tenure on audit quality.

Keywords


audit fee, audit tenure, audit quality, auditor independence

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References


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Cho, Myojung, Soo Young Kwon, and Gopal V Krishnan. 2020. “Audit Fee Lowballing : Determinants , Recovery , and Future Audit Quality.” Journal of Accounting and Public Policy (xxxx): 106787. https://doi.org/10.1016/j.jaccpubpol.2020.106787.

Choi, Jong-hag, Jeong-bon Kim, and Yoonseok Zang. 2010. “Do Abnormally High Audit Fees Impair Audit Quality?” Auditing: A Journal ofPractice & Theory 29(2): 115–40.

Christiawan, Yulius Jogi. 2002. “KOMPETENSI DAN INDEPENDENSI AKUNTAN PUBLIK : REFLEKSI HASIL PENELITIAN EMPIRIS.” Jurnal Akuntansi & Keuangan 4(2): 79–92. http://puslit.petra.ac.id/journals/accounting/.

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Hapsoro, Dody, and Tiara Rani Santoso. 2018. “Does Audit Quality Mediate the Effect of Auditor Tenure , Abnormal Audit Fee and Auditor ’ s Reputation on Giving Going Concern Opinion ?” International Journal of Economics and Financial 8(1): 143–52.

Knachel, W Robert, and Ann Vanstraelen. 2007. “The Relationship between Auditor Tenure and Audit Quality Implied by Going Concern Opinions.” AUDITNG: A Journal of Practice & Theory 26(1): 113–31.

MALIŠ, Sanja Sever, and BROZOVIĆ Mateja. 2019. “Service Quality as a Dimension of Audit Quality.” Proceedings of FEB Zagreb International Odyssey Conference on Economics and Business 1(1): 69–84.

Mardijuwono, Agus Widodo, and Charis Subianto. 2018. “Independence , Professionalism , Professional Skepticism The Relation toward the Resulted Audit Quality.” Asian Journal of Accounting Research 3(1): 61–71. www.emeraldinsight.com/2443-4175.htm.

Meidawati, Neni, and Arden Assidiqi. 2019. “The Influences of Audit Fees , Competence , Independence , Auditor Ethics , and Time Budget Pressure on Audit Quality.” Jurnal Akuntansi dan Auditing Indonesia 23(2): 117–28. www.journal.uii.ac.id/index.php/jaai.

Mgbame, Chijoke Oscar, Emmanuel Eragbhe, and Nosakhare Peter Osazuwa. 2012. “Audit Partner Tenure and Audit Quality : An Empirical Analysis.” European Journal of Business and Management 4(7): 154–63. www.iiste.org.

Payne, Jeff L, and Russell Williamson. 2021. “An Examination of the Influence of Mutual CFO / Audit Firm Tenure on Audit Quality.” Journal of Accounting and Public Policy (xxxx): 106825. https://doi.org/10.1016/j.jaccpubpol.2021.106825.

Rahmina, Listya Yuniastuti, and Sukrisno Agoes. 2014. “Influence of Auditor Independence , Audit Tenure , and Audit Fee on Audit Quality of Members of Capital Market Accountant Forum in Indonesia.” Procedia - Social and Behavioral Sciences 164(August): 324–31. http://dx.doi.org/10.1016/j.sbspro.2014.11.083.

Senjaya, Melya, and Friska Firnanti. 2017. “Auditor Characteristics , Audit Tenure , Audit Fee and Audit Quality.” Global Journal of Business and Social Science Review 5(3): 94–99. www.gatrenterprise.com/GATRJournals/index.html.

Vanstraelen, Ann. 2012. “Empirical Evidence from Belgium Auditor Economic Incentives and Going-Concern Opinions in a Limited Litigious Continental European Business Environment : Empirical Evidence from Belgium.” Accounting and Business Research 32(3): 171–86. http://www.tandfonline.com/loi/rabr20.

Arens, Alvin A, Randal J Elder, Mark S Beasley, and Chris E Hogan. 2016. Auditing And AssurAnce Services An IntegrAted ApproACh. 16 Edition. United States of America: Pearson Education, Inc. or its affiliates.

Cho, Myojung, Soo Young Kwon, and Gopal V Krishnan. 2020. “Audit Fee Lowballing : Determinants , Recovery , and Future Audit Quality.” Journal of Accounting and Public Policy (xxxx): 106787. https://doi.org/10.1016/j.jaccpubpol.2020.106787.

Choi, Jong-hag, Jeong-bon Kim, and Yoonseok Zang. 2010. “Do Abnormally High Audit Fees Impair Audit Quality?” Auditing: A Journal ofPractice & Theory 29(2): 115–40.

Christiawan, Yulius Jogi. 2002. “KOMPETENSI DAN INDEPENDENSI AKUNTAN PUBLIK : REFLEKSI HASIL PENELITIAN EMPIRIS.” Jurnal Akuntansi & Keuangan 4(2): 79–92. http://puslit.petra.ac.id/journals/accounting/.

Corbella, Silvano, Cristina Florio, Giorgio Gotti, and Stacy A Mastrolia. 2015. “Audit Firm Rotation , Audit Fees and Audit Quality : The Experience of Italian Public Companies.” “Journal of International Accounting, Auditing and Taxation” 25: 46–66. http://dx.doi.org/10.1016/j.intaccaudtax.2015.10.003.

Deangelo, Linda Elizabeth. 1981. “AUDITOR SIZE AND AUDIT QUALITY Linda Elizabeth DeANGELO*.” 3(May): 183–99.

Hapsoro, Dody, and Tiara Rani Santoso. 2018. “Does Audit Quality Mediate the Effect of Auditor Tenure , Abnormal Audit Fee and Auditor ’ s Reputation on Giving Going Concern Opinion ?” International Journal of Economics and Financial 8(1): 143–52.

Knachel, W Robert, and Ann Vanstraelen. 2007. “The Relationship between Auditor Tenure and Audit Quality Implied by Going Concern Opinions.” AUDITNG: A Journal of Practice & Theory 26(1): 113–31.

MALIŠ, Sanja Sever, and BROZOVIĆ Mateja. 2019. “Service Quality as a Dimension of Audit Quality.” Proceedings of FEB Zagreb International Odyssey Conference on Economics and Business 1(1): 69–84.

Mardijuwono, Agus Widodo, and Charis Subianto. 2018. “Independence , Professionalism , Professional Skepticism The Relation toward the Resulted Audit Quality.” Asian Journal of Accounting Research 3(1): 61–71. www.emeraldinsight.com/2443-4175.htm.

Meidawati, Neni, and Arden Assidiqi. 2019. “The Influences of Audit Fees , Competence , Independence , Auditor Ethics , and Time Budget Pressure on Audit Quality.” Jurnal Akuntansi dan Auditing Indonesia 23(2): 117–28. www.journal.uii.ac.id/index.php/jaai.

Mgbame, Chijoke Oscar, Emmanuel Eragbhe, and Nosakhare Peter Osazuwa. 2012. “Audit Partner Tenure and Audit Quality : An Empirical Analysis.” European Journal of Business and Management 4(7): 154–63. www.iiste.org.

Payne, Jeff L, and Russell Williamson. 2021. “An Examination of the Influence of Mutual CFO / Audit Firm Tenure on Audit Quality.” Journal of Accounting and Public Policy (xxxx): 106825. https://doi.org/10.1016/j.jaccpubpol.2021.106825.

Rahmina, Listya Yuniastuti, and Sukrisno Agoes. 2014. “Influence of Auditor Independence , Audit Tenure , and Audit Fee on Audit Quality of Members of Capital Market Accountant Forum in Indonesia.” Procedia - Social and Behavioral Sciences 164(August): 324–31. http://dx.doi.org/10.1016/j.sbspro.2014.11.083.

Senjaya, Melya, and Friska Firnanti. 2017. “Auditor Characteristics , Audit Tenure , Audit Fee and Audit Quality.” Global Journal of Business and Social Science Review 5(3): 94–99. www.gatrenterprise.com/GATRJournals/index.html.

Vanstraelen, Ann. 2012. “Empirical Evidence from Belgium Auditor Economic Incentives and Going-Concern Opinions in a Limited Litigious Continental European Business Environment : Empirical Evidence from Belgium.” Accounting and Business Research 32(3): 171–86. http://www.tandfonline.com/loi/rabr20.




DOI: https://doi.org/10.17509/jpak.v12i1.66506

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