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Article
Publication date: 23 November 2018

Iswajuni Iswajuni, Arina Manasikana and Soegeng Soetedjo

The purpose of this paper is to identify the effect of enterprise risk management (ERM) with firm size, ROA and managerial ownership as control variables on firm value that is…

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Abstract

Purpose

The purpose of this paper is to identify the effect of enterprise risk management (ERM) with firm size, ROA and managerial ownership as control variables on firm value that is proxied by Tobin’s Q.

Design/methodology/approach

Population of this research was manufacturing companies listed on the Indonesian Stock Exchange (IDX) in 2010–2013. The used method in this research is multiple linear regression-ordinary least square and hypotheses testing using t-test to test the regression coefficients with level of significance of 5 percent.

Findings

The results showed that ERM, ROA and size of the company have a significant positive effect on the firm value. While the managerial ownership has a significant negative effect on the firm value.

Originality/value

The results showed that firm value increases as ERM, ROA and size of the company improves. While the managerial ownership has a significant negative effect on the firm value.

Details

Asian Journal of Accounting Research, vol. 3 no. 2
Type: Research Article
ISSN: 2443-4175

Keywords

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Article
Publication date: 24 October 2019

Devi Sulistyo Kalanjati, Damai Nasution, Karin Jonnergård and Soegeng Sutedjo

The purpose of this paper is to investigate the association between audit rotation – at the audit partner and audit firm level – and audit quality. As mentioned in the literature…

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Abstract

Purpose

The purpose of this paper is to investigate the association between audit rotation – at the audit partner and audit firm level – and audit quality. As mentioned in the literature, audit rotation has several benefits, and one of them is it can bring a fresh look to audit tasks and subsequently improve audit quality. Moreover, audit itself can help a client to improve its financial reporting. However, ineffective communication between predecessor and successor audit partners or audit firms, and pseudo-rotation can hamper that benefit.

Design/methodology/approach

This study uses multivariate regression analysis to test its hypotheses. Using data from companies listed on the Indonesia Stock Exchange, the sample consists of 688 company-year observations covering the period 2003–2016.

Findings

This study finds that the cumulative number of audit partner rotations is positively associated with audit quality, indicating that rotations at the audit partner level will enhance audit quality. Conversely, it finds that the cumulative number of audit firm rotations is negatively associated with audit quality.

Practical implications

The study’s findings may assist regulators in crafting standards regarding audit rotation. As the findings show, audit partner rotation will improve audit quality, but the audit firm rotation will decrease audit quality. As this study tries to explain the decreasing audit quality from audit firm rotation could be a consequence of ineffective communication or pseudo audit firm rotation. Regulators should try to tackle these problems.

Originality/value

Instead of using tenure as a proxy for a rotation, this study creates a new proxy named the cumulative number of audit partner and audit firm rotations to provide evidence on the benefits of audit rotation.

Details

Asian Review of Accounting, vol. 27 no. 4
Type: Research Article
ISSN: 1321-7348

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