Iman Harymawan, - and Aditya Aji Prabhawa, - and Mohammad Nasih, - and Fajar Kristanto Gautama Putra, - (2021) Risk Management Committee, Auditor Choice and Audit Fees. Risks, 9 (9). pp. 1-15. ISSN 2227-9091

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Abstract

We find that risk management committees and BIG4 audit firms contribute to audit fees. We use observations of 895 companies registered in Indonesia for 2014–2018, and to answer our hypothesis we used ordinary least squares analysis. The results show that BIG4 weakens the relationship between RMC and audit fees. Our study proves that higher demand for audit coverage will occur if there is a risk management committee within the company. As a result, audit fees increase. RMC may demand high-quality external guarantees, but the presence of BIG4 as a moderating variable reduces the relationship between the two variables. We assume that this can happen because auditors can work more efficiently if the company has an RMC, auditor(s) could indirectly reduce the risk because it is partially results from the performance of the RMC. In addition, we also use the robustness test to handle the endogeneity problem with consistent results as OLS. These findings provide evidence for policy makers about the relationship between audit fees and risk management committees.

Item Type:	Article
Uncontrolled Keywords:	risk management committee; Big 4; audit fee
Subjects:	H Social Sciences H Social Sciences > HJ Public Finance 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 Iman Harymawan, - NIDN0020048403 Aditya Aji Prabhawa, - NIM041611333230 Mohammad Nasih, - NIDN0006086503 Fajar Kristanto Gautama Putra, - NIM041411331020
Depositing User:	Tn Sugeng Riyanto
Date Deposited:	05 Feb 2022 07:49
Last Modified:	16 Jun 2023 03:46
URI:	http://repository.unair.ac.id/id/eprint/113398
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