The impact of audit market concentration on audit quality: evidence from Indonesia
This study examines the impact of audit market concentration on audit quality when regulation about mandatory audit firm rotation are applied in Indonesia. This study used 2,578 firm-years of data from nonfinancial companies listed on the Indonesia Stock Exchange (IDX) during 2008–2015. Audit qualit...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2019
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| Online Access: | http://journalarticle.ukm.my/14567/ http://journalarticle.ukm.my/14567/1/36897-116424-2-PB.pdf |
| _version_ | 1848813584941842432 |
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| author | Mutiara Clarina, Fitriany Fitriany, |
| author_facet | Mutiara Clarina, Fitriany Fitriany, |
| author_sort | Mutiara Clarina, |
| building | UKM Institutional Repository |
| collection | Online Access |
| description | This study examines the impact of audit market concentration on audit quality when regulation about mandatory audit firm rotation are applied in Indonesia. This study used 2,578 firm-years of data from nonfinancial companies listed on the Indonesia Stock Exchange (IDX) during 2008–2015. Audit quality was measured by discretionary accruals and abnormal working capital, and market concentration was calculated by the Herfindahl–Hirschman Index. The study found that market concentration decrease the accrual discreationer and improves audit quality. This outcome is likely because auditors experience in a particular industry have a better understanding of industry risk and will thus undertake better audit planning and procedures that tend to improve audit quality. So, regulators need to encourage public accounting firms to specialise in specific areas and have better knowledge of the industry to make audit quality better. |
| first_indexed | 2025-11-15T00:20:31Z |
| format | Article |
| id | oai:generic.eprints.org:14567 |
| institution | Universiti Kebangasaan Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T00:20:31Z |
| publishDate | 2019 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | oai:generic.eprints.org:145672020-05-06T00:19:43Z http://journalarticle.ukm.my/14567/ The impact of audit market concentration on audit quality: evidence from Indonesia Mutiara Clarina, Fitriany Fitriany, This study examines the impact of audit market concentration on audit quality when regulation about mandatory audit firm rotation are applied in Indonesia. This study used 2,578 firm-years of data from nonfinancial companies listed on the Indonesia Stock Exchange (IDX) during 2008–2015. Audit quality was measured by discretionary accruals and abnormal working capital, and market concentration was calculated by the Herfindahl–Hirschman Index. The study found that market concentration decrease the accrual discreationer and improves audit quality. This outcome is likely because auditors experience in a particular industry have a better understanding of industry risk and will thus undertake better audit planning and procedures that tend to improve audit quality. So, regulators need to encourage public accounting firms to specialise in specific areas and have better knowledge of the industry to make audit quality better. Penerbit Universiti Kebangsaan Malaysia 2019 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/14567/1/36897-116424-2-PB.pdf Mutiara Clarina, and Fitriany Fitriany, (2019) The impact of audit market concentration on audit quality: evidence from Indonesia. Jurnal Pengurusan, 57 . pp. 1-12. ISSN 0127-2713 http://ejournal.ukm.my/pengurusan/issue/view/1231 |
| spellingShingle | Mutiara Clarina, Fitriany Fitriany, The impact of audit market concentration on audit quality: evidence from Indonesia |
| title | The impact of audit market concentration on audit quality: evidence from Indonesia |
| title_full | The impact of audit market concentration on audit quality: evidence from Indonesia |
| title_fullStr | The impact of audit market concentration on audit quality: evidence from Indonesia |
| title_full_unstemmed | The impact of audit market concentration on audit quality: evidence from Indonesia |
| title_short | The impact of audit market concentration on audit quality: evidence from Indonesia |
| title_sort | impact of audit market concentration on audit quality: evidence from indonesia |
| url | http://journalarticle.ukm.my/14567/ http://journalarticle.ukm.my/14567/ http://journalarticle.ukm.my/14567/1/36897-116424-2-PB.pdf |