THE INFLUENCE OF LEVERAGE, PROFITABILITY, AND COMPANY SIZE WITH MODERATION OF AUDIT QUALITY ON COMPANY VALUE

Abstract

Companies in the D222 sector in Indonesia have the potential to dominate the global market. This study aims to explore how the value of companies in this sector is shaped by financing policies, such as leverage, and their ability to generate profits, namely profitability. Additionally, the research investigates the influence of company size on firm value. The urgency of this research is highlighted by the crucial role of audit performance in driving strategic efforts by companies to enhance their value. Sampled from the years 2020-2022 and drawn from companies listed on the stock exchange, the population consists of 26 companies. Purposive sampling was employed to select a sample of 19 companies in the D222 sector. The data was analyzed using multiple regression in SPSS version 27. The findings suggest that financing policies, specifically leverage, do not significantly impact firm value, whereas the ability to generate profits, namely profitability, has a significant positive effect on firm value. Company size does not seem to affect the increase in firm value. However, the role of Audit Quality as a moderator yields varying results. In terms of the relationship between financing policies, namely leverage, and firm value, Audit Quality does not appear to strengthen it. Similar results are found concerning the relationship between the ability to generate profits, namely profitability, and firm value. However, Audit Quality seems to enhance the relationship between Company Size and Firm Value. These findings provide valuable insights into the interplay of these factors within the processed food industry in Indonesia, aiming for dominance in the global market.