Abstract
This research was conducted to investigate the effect of audit committee characteristics on audit quality. The characteristics of the audit committee used in this study are the number of audit committees, number of audit committee meetings, audit committee education background, and audit committee experience while audit quality is measured using audit fees. This study uses manufacturing companies listed on the Indonesia Stock Exchange in 2016 - 2018 with 70 observation data and uses OLS regression. The results of this study indicate all four Audit Characteristics, only size and experience significantly influence audit quality. While audit meetings and education do not significantly affect audit quality. Likewise with the education that can not ensure the capabilities possessed by members of the audit committee. Overall, the effectiveness of the audit committee has no significant effect on audit quality.
Highlights
Audit quality is a guarantee given by the auditor of high-quality financial reporting which is a function of the company's financial reporting system and its inherent characteristics (DeFond and Zhang, 2014)
The results show that the coefficient value of audit committee size (ACSize) is 0,558 (p-values = 0,000) which means the size of the audit committee (AC Size) has a positive and significant coefficient at the one percent level which indicates that the size of the audit committee influences audit fees
The purpose of this study is to investigate the effect of audit committee characteristics on audit quality in manufacturing companies in Indonesia
Summary
Audit quality is a guarantee given by the auditor of high-quality financial reporting which is a function of the company's financial reporting system and its inherent characteristics (DeFond and Zhang, 2014). Good audit quality is expected to produce a quality company financial report, in which financial statements are needed by various parties, including investors and creditors in the context of decision making (DeAngelo, 1981). To get decisions that suit the needs of investors and creditors, good quality of audited financial statements are needed. The increase in quality of audits become urgent because with high audit quality it will produce high-quality financial reporting (DeFond and Zhang, 2014). This shows that audit quality is important and urgent for a company
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