WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 16, 2019
The Effect of Auditor Switching and Managerial Ownership on Fraudulent Financial Statement
Authors: St. Dwiarso Utomo, Zaky Machmuddah, Imang Dapit Pamungkas
Abstract: Fraudulent financial statements are one of the abandonment of deliberate amounts and disclosures with the intent of deceiving the user of financial statement. This becomes a serious issue and concern that needs to be quickly resolved. This study aims to examine the effect of audit quality and auditor switching on fraudulent financial statement. This study also examined the effect of managerial ownership as a moderating variable on the relationship of audit quality and auditor switching to fraudulent financial statement. Population in this research is listed on the Indonesia stock exchange in 2013-2017. The total sample use 90 fraud category companies and 100 non-fraud companies with criteria for industry similarity and total assets. Data analysis used descriptive statistical analysis and hypothesis testing using Logistic Regression analysis. The results of this study indicate that there is a significant negative influence between audit quality on fraudulent financial statement. There is a significant positive influence between auditor switching on fraudulent financial statement. Furthermore, the results of this study prove that managerial ownership is able to strengthen the relationship of audit quality to fraudulent financial statement. Managerial ownership is able to weaken the auditor switching relationship to fraudulent financial statement.
Keywords: Audit Quality, Managerial Ownership, Fraudulent Financial Statement
Pages: 306-315WSEAS Transactions on Business and Economics, ISSN / E-ISSN: 1109-9526 / 2224-2899, Volume 16, 2019, Art. #34