Dyah Ayu Larasati, - and Melinda Cahyaning Ratri, - and Mohammad Nasih, - and Iman Harymawan, - (2019) Independent audit committee, risk management committee, and audit fees. Cogent Business and Management, 6 (1). pp. 1-15. ISSN 2331-1975

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Abstract

This study aims to analyze the role of an independent audit committee on the relationship between the Risk Management Committee (RMC) and audit fees. We use 510 observations from 216 different companies indexed on the Indonesia Stock Exchange for 2014–2016. This study uses ordinary least square analysis to prove our hypotheses. We find that participation of the independent commissioner as an audit committee member will strengthen the relationship between RMC and audit fee. Consistent with the demand side of audit theory, our study shows that the existence of a stand-alone risk management committee and a more independent commissioner sitting on the audit committee will demand higher audit coverage. As a result, it will increase the audit fee. It occurs since the existence of a more independent audit committees could be able to objectively assess the risk as recommended by the RMC and respond to it by increasing the demand on audit coverage for higher audit quality, and hence increase the fees paid to the external auditor. These findings could contribute to the regulatory bodies in Indonesia in terms of providing empirical evidence on the relationship between board governance structure and audit pricing within non-financial industries companies.

Item Type:	Article
Uncontrolled Keywords:	risk management committee; board risk commi tee; independent audit committee; audit fees
Subjects:	H Social Sciences H Social Sciences > HD Industries. Land use. Labor > HD61 Risk Management H Social Sciences > HJ Public Finance > HJ9-9940 Public finance > HJ9701-9940 Public accounting. Auditing
Divisions:	04. Fakultas Ekonomi dan Bisnis > Akuntansi
Creators:	Creators NIM Dyah Ayu Larasati, - NIM041411331051 Melinda Cahyaning Ratri, - NIM041411331034 Mohammad Nasih, - NIDN0006086503 Iman Harymawan, - NIDN0020048403
Depositing User:	Tn Sugeng Riyanto
Date Deposited:	07 Feb 2022 00:37
Last Modified:	16 Jun 2023 04:38
URI:	http://repository.unair.ac.id/id/eprint/113450
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