External and Internal Factor of Auditor Switching

Fajar Gustiawaty Dewi ,I Ketut Yadnyana ,Dewa Gede Wirama

doi:10.7176/rjfa/11-8-06

Abstract

Auditor Switching is done voluntarily,and raises questions about the factors that become the reference for that. Internal factors are management changes, financial distress, going concern opinion, company size, audit delay, institutional ownership, and public ownership. The external factor is the auditor's reputation. Based on the results of purposive sampling obtained 163 companies that meet the sample criteria, with the observation year 2009-2013, in order to obtain 815 research samples. The test results show that the change of management, financial distress, going concern opinion and audit delay has a positive effect on the auditor switching, company size and auditor's reputation negatively affect on the auditor switching While the variables of institutional ownership and public ownership do not affect the auditor switching. Keywords: auditor switching, internal factors, eksternal factors, and logistic. DOI: 10.7176/RJFA/11-8-06 Publication date: April 30 th 2020

Highlights

A public accountant who plays a role as a third party is required to be able to assess the reasonableness of a financial statement to show its independence
When the auditee has an instinctual relationship that leads to personal independence owned by the auditor it affects the results of the audit report issued by Nasser, et al (2006)
Based on Table 1. above it is explained that the constant coefficient for simultaneous relationships of 0.889 indicates that if the value of management change variables, financial distress, going concern opinion, company size, audit delay, institutional ownership, public ownership, and auditor's reputation are zero, the value of auditor swicthing rose by 8.89%

Summary

Introduction

A public accountant who plays a role as a third party is required to be able to assess the reasonableness of a financial statement to show its independence. Companies certainly consider KAP in good standing so as to be able to improve the quality of financial statements made by management and the company's image for users of financial statements, especially shareholders Based on this explanation, a company that has used the services of large KAP will have a small possibility to change the Public Accounting Firms, the eighth hypothesis in this study is: H8: The auditor's reputation has a negative effect on auditor switching. The reason for using this technique is so that the sample used can explain the relationship between the variables studied with more representation These provisions by researchers are divided into three things; 1) companies listed on the Indonesian Securities Burse (IDX) during the period 2009-2013; 2) the company has never changed the KAP at least one of the observation years; 3) companies that carry out KAP changes in a mandatory manner. In the logistic regression analysis technique no longer requires the normality test and the classic assumption test on the independent variable (Ghozali, 2011: 333)

Discussion

Findings

Conclusion and Recomendation