TY - JOUR
T1 - Are independent commissioners able to mitigate higher audit fees in politically connected firms? Evidence from Indonesia
AU - Harymawan, Iman
AU - Putra, Fajar Kristanto Gautama
AU - Ekasari, Wulandari Fitri
AU - Sucahyati, Diaranny
N1 - Publisher Copyright:
© Primrose Hall Publishing Group.
PY - 2020
Y1 - 2020
N2 - This study aims to examine the relationship of political connection and independent commissioners to audit fees charged by the auditor. Using both univariate and multivariate analysis on 961 firm-year observations from Indonesian listed, we find that political connection (independent commissioners) has positive (negative) relationship to audit fees. We also find that independent commissioners are dominating the political connection in context of relationship to audit fees. Furthermore, we document that political connection relationship to audit fees is mainly derived from a board of directors, CEO, and affiliation from certain organisations, that are also weakened by the presence of an independent commissioner. Our study contributes to political connection literature in developing countries, specifically in audit fees. We also provide practical implication for management to consider the independent commissioner as one to minimise the demerits of political connection.
AB - This study aims to examine the relationship of political connection and independent commissioners to audit fees charged by the auditor. Using both univariate and multivariate analysis on 961 firm-year observations from Indonesian listed, we find that political connection (independent commissioners) has positive (negative) relationship to audit fees. We also find that independent commissioners are dominating the political connection in context of relationship to audit fees. Furthermore, we document that political connection relationship to audit fees is mainly derived from a board of directors, CEO, and affiliation from certain organisations, that are also weakened by the presence of an independent commissioner. Our study contributes to political connection literature in developing countries, specifically in audit fees. We also provide practical implication for management to consider the independent commissioner as one to minimise the demerits of political connection.
KW - Audit fees
KW - Independent commissioner
KW - Political connection
UR - http://www.scopus.com/inward/record.url?scp=85081888594&partnerID=8YFLogxK
M3 - Article
AN - SCOPUS:85081888594
SN - 2201-1315
VL - 11
SP - 24
EP - 43
JO - International Journal of Innovation, Creativity and Change
JF - International Journal of Innovation, Creativity and Change
IS - 8
ER -