Audit Firm Tenure, Audit Firm Size and Audit Quality

Abstract

Objective - The objective of this paper is to examine the effect of audit firm tenure and audit firm size on audit quality. This study applies explanatory research in which questionnaire and interviews serve as the primary data. The population of this study is public accounting firms which are registered in the Indonesian capital market. Methodology/Technique - The study presents a survey using professional auditors. The multiple regression methode is used to conduct an hypothesis test of the effect of audit firm tenure and audit firm size on audit quality. Findings - The result of study depicted that audit firm tenure has no significant influence on the audit quality, while the audit firm size has significant influence on the audit quality. Audit quality deteriorate, when the length of the audit firm client engagement is longer. No particular concern to audit firm size since the big audit firm size has extensive training for their staffs and sufficient system in place. Novelty - The study contributes to auditing literature in the areas of audit quality. The length of the audit firm client relationship and audit firm size always rise the contradiction to the audit quality. The audit firm tenure and audit firm size support previous study, additional insight are gained toward in the elections of the audit firm that serves professional services in capital markets. Type of Paper - Empirical Keywords: Audit Firm Tenure; Audit Firm Size; Audit Quality; Auditor