The Relationship between Audit Committee Effectiveness and Audit Fees: Insights from Indonesia

• 발행기관: 한국유통과학회
• 저자명: Indira JANUARTI Darsono DARSONO Anis CHARIRI
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.7, 179~185쪽, 전체 7쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.07.30

영문 초록

This study examines the relationship between the effectiveness of an audit committee and the amount of audit fees. The sample consists of 130 manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2016–2017. Data are obtained from the IDX and company’s annual reports. The effectiveness of an audit committee is measured by independent audit committee size, frequency of audit committee meetings, and expertise of the audit committee. Results show first that the size of the independent audit committee has a positive effect on audit fees. This finding suggests that an increase in the number of independent audit committee members produces a higher quality of reporting, and so they tend to choose a reputable public accountant. Second, the frequency of its meetings has positive effects on audit fees. It suggests that the more effective the supervision of the committee to improve audit quality, the higher the audit fees to be paid. However, this study fails to provide evidence that the expertise of the audit committee affects audit fees. The result of this study suggests that the audit committee tends to adopt the demand approach based on the reputation of the public accounting firm accountant firm in determining the amount of audit fees.

목차

1. Introduction

2. Literature Review and Hypothesis Development

3. Research Methods

4. Results

5. Conclusions

References

키워드

Audit Fee Audit Committee Demand-Supply Approach Indonesia