The relationship between audit quality and risk taking toward value creation in Indonesia

Mangesti Sri and Solimun Solimun

Journal of Accounting in Emerging Economies, 2019, vol. 9, issue 2, 251-267

Abstract: Purpose - The purpose of this paper is to evaluate the effect between audit quality and risk taking on value creation. Design/methodology/approach - Population under study is companies on the Jakarta Stock Exchange from 2004 to 2015. Considering the limitations, 145 companies studied in this research, which made a sample containing 1,740 company-years. This study is based on the panel data and multivariate regression method. This research uses fixed and random effects to estimate the regression. In this paper, five components of audit quality, including auditor specialization, tenure, audit firm size, ownership concentration and the percentage of unbounded members of the board, are studied. Findings - The results of this study indicate that among these five components as well as the risk factor, only tenure and ownership concentration have a significant effect on value creation of companies. In other words, both ownership concentration and tenure are positively effective in value creation and other variables have no significant effect on value creation. Besides, none of them could affect the risk taking on value creation. Originality/value - The outcomes of the current study help audit market and capital market in developing nations.

Keywords: Value creation; Audit quality; Risk taking (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jaeepp:jaee-11-2017-0110

DOI: 10.1108/JAEE-11-2017-0110

Access Statistics for this article

Journal of Accounting in Emerging Economies is currently edited by Dr Shahzad Uddin

More articles in Journal of Accounting in Emerging Economies from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().