Audit Market Concentration, Audit Fee, and Audit Quality: Case Study In Indonesia when Mandatory Audit Firm Rotation Abolished
Muthia Prima Nirmala (a), Fitriany Fitriany (b*)
FEB - Universitas Indonesia
Kampus UI depok
Abstract
This study aims to obtain empirical evidence related to the direct and indirect relationship between audit market concentration and audit quality and audit fee. The background of this study was due to the application of PP 20/2015 where these regulations abolishing the mandatory audit firm rotation. The sample used in this study is a non-financial company listed on the Indonesia Stock Exchange in 2013-2017. This study found that market concentration does not directly affect the quality of the audit, both before and after the application of PP no 20/2015. But after the application of PP No. 20/2015, this study found an indirect effect of market concentration on audit quality through audit fees. After Implementation of PP 20, the market concentration significantly increase the audit fees and audit fees also increased the audit quality.
Keywords: audit fee; audit market concentration; audit quality; PP No. 20/2015
Topic: Economics, Finance, Banking, and Accounting