Auditor Reputation vs Governance: What Drives Audit Quality in Indonesia’s Transportation & Logistics Sector (2020–2024)?
DOI:
https://doi.org/10.33395/owner.v10i2.3067Keywords:
Audit Committee, Auditor Gender, Audit Quality, Audit Reputation, Transportation and LogisticsAbstract
Audit quality is an essential factor that affects financial reporting, especially among emerging markets, including sectors that belong to risky industries, such as transportation and logistics. This research aims to investigate several factors, such as auditor gender, audit firm reputation, and audit committee activities, that affect audit quality, especially for companies listed on the Indonesia Stock Exchange that belong to the transportation and logistics industry. This research used balanced panel data that includes companies from 2020 to 2024, where audit quality is measured according to discretionary accrual figures from Modified Jones Model regression including control variables for firm sizes, leverage, and profitability. Audit committee is found to have a positive and significant correlation with discretionary accrual figures, indicating lower audit quality while auditor gender and audit firm reputation have no relationship with audit quality. The research also finds profitability to be positively related with audit quality, whereas firm size and leverage were not related to audit quality. The research contributes to audit quality in terms of emerging economies, considering specific studies in Indonesian transportation and logistical companies, utilizing discrete accrual modelling, which represents earnings management signals to proxy audit quality. Practically, the findings imply that regulators, audit firms, and issuers should place greater emphasis on the effectiveness of governance mechanisms rather than relying on audit firm reputation or individual auditor characteristics as signals of better audit quality.
Downloads
Plum-X Analityc
References
Alomair, A., & Naim, A. S. A. (2025). Audit committee leadership and audit quality: How audit committee chairman traits shape audit quality? Evidence from emerging markets. Cogent Business & Management, 12(1). https://doi.org/10.1080/23311975.2025.2502545
Bawuah, I. (2024). Audit committee effectiveness, audit quality and earnings management: evidence from Ghana. Cogent Business & Management, 11(1). https://doi.org/10.1080/23311975.2024.2315318
DeAngelo, L. E. (1981). Auditor size and audit quality. Journal of Accounting and Economics, 3(3), 183–199. https://doi.org/10.1016/0165-4101(81)90002-1
Dechow, P. M., & Dichev, I. D. (2002). The quality of accruals and earnings: The role of accrual estimation errors. The Accounting Review, 77(s-1), 35–59. https://doi.org/10.2308/accr.2002.77.s-1.35
Dong, C., Jiang, H., Tan, Y., Wang, Z. (2024). Litigation Risk, Reputation Protection, and Audit Quality. International Review of Accounting, Banking and Finance, 16(1), 1-17/
El-Deeb, M. S., Alarabi, Y., & Mohamed, A. (2024). The role of audit committee characteristics in improving the risk disclosure of companies examining the moderating role of audit quality. Future Business Journal, 10(1). https://doi.org/10.1186/s43093-024-00417-2
Francis, J. R. (2011). A framework for understanding and researching audit quality. Auditing a Journal of Practice & Theory, 30(2), 125–152. https://doi.org/10.2308/ajpt-50006
Hardies, K., Breesch, D., & Branson, J. (2014). Do (Fe)Male Auditors Impair Audit Quality? Evidence from Going-Concern Opinions. European Accounting Review, 25(1), 7–34. https://doi.org/10.1080/09638180.2014.921445
Helmiati, K., & Hernawati, R. I. (2025). Differentiation of Audit Quality Between Big 4 and Non-Big 4 Auditors. Harmoni Economics: International Journal of Economics and Accounting, 2(4), 129–134. https://doi.org/10.70062/harmonieconomics.v2i4.379
Jérôme, T., Poretti, C., & Schatt, A. (2024). Female lead auditors, audit fees, and audit quality. The British Accounting Review, 57(3), 101497. https://doi.org/10.1016/j.bar.2024.101497
Judijanto, L., & Iskandar, D. (2024). The impact of audit quality, auditor reputation, and auditor rotation on the market value of companies on the Indonesia Stock Exchange. West Science Accounting and Finance, 2(03), 597–606. https://doi.org/10.58812/wsaf.v2i03.1434
Klein, A. (2002). Audit committee, board of director characteristics, and earnings management. Journal of Accounting and Economics, 33(3), 375–400. https://doi.org/10.1016/s0165-4101(02)00059-9
Lee, H. S., Nagy, A. L., & Zimmerman, A. B. (2018). Audit partner assignments and audit quality in the United States. The Accounting Review, 94(2), 297–323. https://doi.org/10.2308/accr-52218
Mayasha, E., & Majidah, M. (2025). Audit Quality in Emerging Markets: Evidence from Indonesia’s Consumer Industry. American Journal of Economic and Management Business (AJEMB), 4(9), 1458–1470. https://doi.org/10.58631/ajemb.v4i9.283
Nindita, N. O., & Nirwana, N. (2023). The effect of audit fees, auditor reputation, auditor rotation on audit quality in food and beverage companies listed on the BEI Periode 2019-2021. Journal of Finance and Business Digital, 2(4), 449–462. https://doi.org/10.55927/jfbd.v2i4.7098
O’Brien, W., Hanlon, C., & Apostolopoulos, V. (2023). Women as leaders in male?dominated sectors: A bifocal analysis of gendered organizational practices. Gender Work and Organization, 30(6), 1867–1884. https://doi.org/10.1111/gwao.13019
Putri, V., & Aris, M. (2025). Determinants of Auditor Reputation, Audit Committee, Audit Delay and Audit Fee on Audit Quality. Indonesian Interdisciplinary Journal of Sharia Economics (IIJSE), 8(2), 6648-6664. https://doi.org/10.31538/iijse.v8i2.7462
Serly, S., & Delnecca, D. (2022). DETERMINAN KUALITAS AUDIT PERUSAHAAN NONKEUANGAN. Akurasi : Jurnal Studi Akuntansi Dan Keuangan, 5(2), 254–270. https://doi.org/10.29303/akurasi.v5i2.273
Sobhan, R., Khatun, A., & Ikra, I. J. (2025). Audit committee characteristics and quality of audit: an interconnection from the perspective of an emerging economy. Asian Journal of Accounting Research, 1–17. https://doi.org/10.1108/ajar-01-2024-0016
Tran, T. G. T., Pham, Q. T., Tran, T. T. P., & Bui, T. T. H. (2025). The impact of audit firm size on audit quality - An empirical study of the Vietnamese stock market. SAGE Open, 15(2). https://doi.org/10.1177/21582440251336005
Tchuigoua, H. T. (2025). Does the legal enforcement environment constrain earnings management in social enterprises? Evidence from microfinance institutions. The British Accounting Review, 101684. https://doi.org/10.1016/j.bar.2025.101684
Zagloel, T. Y. M., Siregar, M. T., Hidayatno, A., & Setiawan, A. D. (2024). Development of sustainable logistics performance model using system dynamics in urban logistics service companies in Indonesia. Cogent Business & Management, 11(1). https://doi.org/10.1080/23311975.2023.2286684
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Setyorini Yuliati, Harti Budi Yanti
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
