Year: 2026
Type: article
Abstract: Background: Audit quality forms the foundation of the credibility and transparency of corporate financial statements, yet the recurrence of restatements and of sanctions against public accounting firms (KAP) in Indonesia shows that it remains a persistent issue. Objective: This study examines how KAP reputation, audit fee, and audit tenure relate to the audit quality of firms listed on the Indonesia Stock Exchange (IDX) over 2021–2025. Methods: A quantitative associative design was applied to secondary panel data drawn from audited annual financial statements. Purposive sampling produced 119 listed firms and 595 firm-year observations. The data were examined through binary logistic regression in EViews 12. Results: The binary logistic regression on 595 firm-year observations indicates that KAP reputation significantly lowers the probability of restatement (coefficient −0.9063; p = 0.0268), consistent with higher audit quality, whereas audit fee significantly raises it (coefficient +0.9152; p < 0.001), implying that larger fees accompany a greater likelihood of restatement. Audit tenure is not significant (coefficient −0.1809; p = 0.2025). The McFadden R² of 0.6706 reflects a substantial improvement in fit over the null model, and the Hosmer–Lemeshow test (p = 0.1194) points to adequate goodness of fit. Conclusion: Firms audited by internationally affiliated (Big Ten) KAP show a lower likelihood of restatement, signaling higher audit quality, whereas higher fees accompany a greater likelihood of restatement a direction in line with the economic-bonding perspective while audit tenure does not determine audit quality.
Authors: Raden Ginandjar, Rita Yuniarti
Institution: Universitas Widyatama
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7225169970