THE EFFECT OF POLITICAL CONNECTIONS, THE ROLE OF THE INDEPENDENT AUDIT COMMITTEE, AND CEO DUALITY ON AUDIT FEE (Case Study on Consumer Products & Services Sector Companies Listed on the Malaysia Stock Exchange in 2020)
Abstract
The purpose of the study was to test and analyze the influence of political connections, the role of independent audit committees, and the duality of CEOs both partially and simultaneously on audit costs. This research is quantitative research. The population used in the study was a Consumer Products &Service sector company listed on the Malaysia Stock Exchange periode 2020. The study used multiple linear regression analysis. The results showed that political relationships had a positive and significant effect on audit costs, while independent audit committees and CEO dualities had no effect on audit costs. In addition, simultaneous test results showed that political relationships, independent audit committees, and CEO dualities had a positive and significant effect on audit costs.
Keywords: Audit Fee, Political Connections, Independent Audit Committee, Duality CEO
References
Abdul, Halim.2008. Auditing (The Basics of Auditing Financial Statements). Yogyakarta: STIM YKPN Publishing and Printing Unit.
Anggraeni, R. (2018). The Effect of Political Connections on Tax Aggressiveness (Empirical Study: Manufacturing Companies Listed on the Indonesia Stock Exchange 2014-2017). Journal of Accounting, 6(3).
Armadiyanti, P., & Iswati, S. (2019). Corporate Political Connection and Audit Quality. Indonesian Journal of Accounting and Finance, 16(2), 122–140. https://doi.org/10.21002/jaki.2019.07
Ariningrum, I., & Diyanty, V. (2017). The impact of political connections and the effectiveness of board of commissioner and audit committees on audit fees. Australasian Accounting, Business and Finance Journal, 11(4), 53–70. https://doi.org/10.14453/aabfj.v11i4.5
Bliss, M. A., Gul, F. A., & Majid, A. (2011). Do political connections affect the role of independent audit committees and CEO Duality? Some evidence from Malaysian audit pricing. Journal of Contemporary Accounting and Economics, 7(2), 82–98. https://doi.org/10.1016/j.jcae.2011.10.002.
Effendi, Muh Arief. 2016. "The Power of Good Corporate Governance: Theory and Implementation of Edition 2". Jakarta: Salemba Four.
El-Gammal, W. (2012). Determinants of audit fees: Evidence from Lebanon. International Business Research, 5(11), 136.
Ferdinand, A. (2014). Management research methods: Research guidelines for thesis writing, thesis, and management science dissertation (5th ed.). Semarang: Dippnegoro University Publishing Body.
Ghozali, I. (2018). Multivariate Analysis Applications With IBM and SPSS Programs. In Multivariate Analysis Application With IBM Spss 19 Program (printed to). Semarang: Diponegoro University Publishing Body.
Gul, F. A. (2006). Auditors' response to political connections and cronyism in Malaysia. Journal of Accounting Research, 44(5), 931-963.
Habib, A., Ranasinghe, D., Muhammadi, A. H., & Islam, A. (2018). Political connections, financial reporting and auditing: Survey of the empirical literature. Journal of International Accounting, Auditing and Taxation, 31, 37–51. https://doi.org/10.1016/j.intaccaudtax.2018.05.002
Hassan U., Shehu. (2013). Financial Reporting Quality, Does Monitoring Characteristics Matter? An Empirical Analysis of Nigerian Manufacturing Sector. The Business & Management Review. 3(2), 147-161.
Hazmi, M. Al, & Sudarno. (2013). Influence of Governance Structure and Internal Audit on External Audit Fees on Companies Listed on IDX. Diponegoro Journal of Accounting, 2(2), 1–13.
Hundal, S. (2013). Independence, Expertise and Experience of Audit Committees: Some Aspects of Indian Corporate Sector. American International Journal of Social Science, 2(5), 58.
Kosasih, & Widayati. (2013). Influence of Audit Committee Independence, Effectiveness of Audit Committee. Tarumanegara University Jounal of Accounting, XVII(01), 132–148.
Mulyadi, D. (2016). Public Policy Studies and Publik Services: Concepts and Applications of Evidence Analysis-Based Public Policy Processes for Public Service.
Nugrahani, N. R., & Sabeni, A. (2013). Factors That Affect the Determination of External Audit Fees. Diponegoro Journal of Accounting, 0(0), 868–878.
Sayyidah, U., & Saifi, M. (2017). The Influence of Intellectual Capital on The Value of Companies With Profitability as a Moderation Variable (Study on Property and Real Estate Sub-Sector Companies on the Indonesia Stock Exchange Period 2013-2015). Journal of Bisnis Administration, 46(1).
Sugiyono. (2018). Quantitative, qualitative, and R&D. Bandung research methods: Alfabeta.
Tat, R. N. E., & Murdiawati, D. (2020). Factors Determining External Audit Fee (Audit Fee) in Non-Financial Companies. Scientific Journal of Accounting, 5(1), 177. https://doi.org/10.23887/jia.v5i1.24543
Law No. 40 of 2007 concerning Limited Liability Companies
Weir, C., & Laing, D. (2001). Governance structures, director independence and corporate performance in the UK. European Business Review.
Yuniarti, R., & Riswandi, P. (2021). Analysis of the Influence of Political and Gender Diversity Connections on Audit Fees. 14(1), 133–142.
