Does Audit Tenure, and Audit Firm Industry Specialization Influence Audit Quality?: Evidence From The Manufacturing Industry in Indoensia

Aldiena Bunga Fadhila

Abstract


Abstract: Audit quality is influenced by the independence and competence of the audit firm and also an auditor. This research aims to analyze the impact of audit firm tenure, auditor tenure, and audit firm industry specialization towards audit quality. Long audit tenure of both, auditor and audit firm, merely results in a deeper understanding about the client or entity, but on the other hand, also threatens auditor independence. Audit firm industry specialization is appointed to be one of the factors increasing audit quality in terms of industry-specific knowledge owned by the audit firm. This research uses 36 manufacturing entities in financial distress listed on the Indonesian Stock Exchange in the year of 2004-2010. By using the propensity to issue a going-concern opinion as a proxy for audit quality, this research shows that audit firm tenure and audit firm industry specialization has no significant influence on audit quality. Nevertheless, auditor tenure has a positive and significant effect on audit quality.

Abstrak: Kualitas audit dipengaruhi oleh independensi dan kompetensi dari perusahaan audit dan juga auditor. Penelitian ini bertujuan untuk menganalisis pengaruh penguasaan perusahaan audit, tenur auditor, dan spesialisasi industri audit perusahaan terhadap kualitas audit. Masa jabatan audit yang lama baik, auditor dan perusahaan audit, hanya menghasilkan pemahaman yang lebih dalam tentang klien atau entitas, tetapi di sisi lain, juga mengancam independensi auditor. Spesialisasi industri perusahaan audit diangkat menjadi salah satu faktor yang meningkatkan kualitas audit dalam hal pengetahuan khusus industri yang dimiliki oleh perusahaan audit. Penelitian ini menggunakan 36 entitas manufaktur dalam financial distress yang terdaftar di Bursa Efek Indonesia pada tahun 2004-2010. Dengan menggunakan kecenderungan untuk mengeluarkan opini going-concern sebagai proksi untuk kualitas audit, penelitian ini menunjukkan bahwa audit kepemilikan perusahaan dan spesialisasi industri perusahaan audit tidak memiliki pengaruh signifikan terhadap kualitas audit. Namun demikian, tenur auditor memiliki pengaruh positif dan signifikan terhadap kualitas audit.


Keywords


audit quality; audit firm tenure; auditor tenure; audit firm industry specialization; independency; audit competence

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DOI: http://doi.org/10.33312/ijar.402

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ISSN 2086-6887 (Print)
ISSN 2655 - 1748 (online)

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