Internal audit functions and audit outcomes: Evidence from Indonesia

The internal audit function is important to minimize the occurrence of fraudulent financial statements and provide assurance and independent consultation for decision-making. The purpose of this study is to analyze the relationship of the quality of internal audit team (internal audit function) on a...

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Autores principales:	Achmad Dzulfikar Dzikrullah, Iman Harymawan, Melinda Cahyaning Ratri
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2020
Materias:	internal audit audit fee audit quality audit choice audit opinion Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/9623977e34c64b9694a3469935d297d3
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spelling	oai:doaj.org-article:9623977e34c64b9694a3469935d297d32021-12-02T17:00:22ZInternal audit functions and audit outcomes: Evidence from Indonesia2331-197510.1080/23311975.2020.1750331https://doaj.org/article/9623977e34c64b9694a3469935d297d32020-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2020.1750331https://doaj.org/toc/2331-1975The internal audit function is important to minimize the occurrence of fraudulent financial statements and provide assurance and independent consultation for decision-making. The purpose of this study is to analyze the relationship of the quality of internal audit team (internal audit function) on audit fees, audit quality, audit choice, and audit opinion. This study uses 722 observations on companies listed on the Indonesia Stock Exchange for two periods from 2016 to 2017 and uses Ordinary Least Square Regression analysis techniques to examine the hypotheses. This study found that one of the internal auditors' functions, which is size of the internal audit team, as a corporate oversight mechanism has a positive and significant relationship to the magnitude of external auditor fees, audit quality, and the tendency of companies to choose auditors with big names (Big4). In addition, this study found that internal audit also has a negative and significant influence on the tendency of companies to accept going concern audit opinions. This research provides support on the benefit of having a good quality of internal auditors for the company. The results of this study indicate that companies that have an adequate internal audit function tend to cost higher external auditor fees, and hiring auditors with big names (Big4) to produce high audit quality. In addition, the existence of adequate internal auditors also reducing the probability of the firms on receiving the going concern audit opinions.Achmad Dzulfikar DzikrullahIman HarymawanMelinda Cahyaning RatriTaylor & Francis Grouparticleinternal auditaudit feeaudit qualityaudit choiceaudit opinionBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 7, Iss 1 (2020)
institution	DOAJ
collection	DOAJ
language	EN
topic	internal audit audit fee audit quality audit choice audit opinion Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	internal audit audit fee audit quality audit choice audit opinion Business HF5001-6182 Management. Industrial management HD28-70 Achmad Dzulfikar Dzikrullah Iman Harymawan Melinda Cahyaning Ratri Internal audit functions and audit outcomes: Evidence from Indonesia
description	The internal audit function is important to minimize the occurrence of fraudulent financial statements and provide assurance and independent consultation for decision-making. The purpose of this study is to analyze the relationship of the quality of internal audit team (internal audit function) on audit fees, audit quality, audit choice, and audit opinion. This study uses 722 observations on companies listed on the Indonesia Stock Exchange for two periods from 2016 to 2017 and uses Ordinary Least Square Regression analysis techniques to examine the hypotheses. This study found that one of the internal auditors' functions, which is size of the internal audit team, as a corporate oversight mechanism has a positive and significant relationship to the magnitude of external auditor fees, audit quality, and the tendency of companies to choose auditors with big names (Big4). In addition, this study found that internal audit also has a negative and significant influence on the tendency of companies to accept going concern audit opinions. This research provides support on the benefit of having a good quality of internal auditors for the company. The results of this study indicate that companies that have an adequate internal audit function tend to cost higher external auditor fees, and hiring auditors with big names (Big4) to produce high audit quality. In addition, the existence of adequate internal auditors also reducing the probability of the firms on receiving the going concern audit opinions.
format	article
author	Achmad Dzulfikar Dzikrullah Iman Harymawan Melinda Cahyaning Ratri
author_facet	Achmad Dzulfikar Dzikrullah Iman Harymawan Melinda Cahyaning Ratri
author_sort	Achmad Dzulfikar Dzikrullah
title	Internal audit functions and audit outcomes: Evidence from Indonesia
title_short	Internal audit functions and audit outcomes: Evidence from Indonesia
title_full	Internal audit functions and audit outcomes: Evidence from Indonesia
title_fullStr	Internal audit functions and audit outcomes: Evidence from Indonesia
title_full_unstemmed	Internal audit functions and audit outcomes: Evidence from Indonesia
title_sort	internal audit functions and audit outcomes: evidence from indonesia
publisher	Taylor & Francis Group
publishDate	2020
url	https://doaj.org/article/9623977e34c64b9694a3469935d297d3
work_keys_str_mv	AT achmaddzulfikardzikrullah internalauditfunctionsandauditoutcomesevidencefromindonesia AT imanharymawan internalauditfunctionsandauditoutcomesevidencefromindonesia AT melindacahyaningratri internalauditfunctionsandauditoutcomesevidencefromindonesia
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Internal audit functions and audit outcomes: Evidence from Indonesia

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