The relationship between business and the audit fee: Evidence from Indonesian listed companies

Andrivan Nindya Krisna, Amalia Rizki

Research output: Contribution to journalArticlepeer-review

Abstract

This research intends to obtain empirical evidence to determine the relationship between a business and the external audit service fee. Using the modified model from research of Simunic (1980), this research took balanced samples from 26 manufacturing firms listed on the Indonesian Stock Exchange (IDX) from the period 2014 to 2016 in order to represent the population of manufacturing firms listed in that time period. Using audit fees as dependent variable and firm size, audit complexity, audit risk, and Big-Four audit firms' premium, this research tried to find out the relationship between those variables, using multiple linear regression as the method to achieve that goal. The result of this research shows that there is a correlative relationship between firm size, audit complexity, audit risk, and 'Big-Four' audit firms' in regard to a premium positive and audit fee.

Original languageEnglish
Pages (from-to)526-540
Number of pages15
JournalInternational Journal of Innovation, Creativity and Change
Volume13
Issue number4
Publication statusPublished - 2020

Keywords

  • Audit complexity
  • Audit fee
  • Audit risk
  • Big-four audit firms' premium
  • Firm size

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