The Effect of Auditor Reputation on Stock Returns - The Case of Arthur Andersen

Tenure Audit, Reputasi Auditor dan Kualitas Audit pada Perusahaan Manufaktur : Analisis Kompleksitas Operasi sebagai Pemoderasi

Jurnal Riset Akuntansi & Perpajakan (JRAP) ◽

10.35838/jrap.2018.005.01.1 ◽

2018 ◽

Vol 5 (01) ◽

pp. 1-13

Author(s):

Amirul Hadi Khasani ◽

Amilin Amilin ◽

Choirul Anwar

Keyword(s):

Sampling Method ◽

Audit Quality ◽

Stock Exchange ◽

Peer Group ◽

Jel Classification ◽

Test Results ◽

Manufacturing Companies ◽

Purposive Sampling ◽

Arthur Andersen ◽

Auditor Reputation

ABSTRACT This study examines the influence of audit tenure and auditor reputation on audit quality with operational complexity as a moderating variable. The Enron case involving Arthur Andersen led to the limitation of the audit tenure. Audit quality is measured by current accrual while audit lag is measured by calculating the year in which the same auditor has committed to the auditee, the auditor’s reputation is measured by the peer group amount and the operating complexity is measured using the number of subsidiaries. This study focused on manufacturing companies listed on the Indonesia Stock Exchange 2011 to 2015, using purposive sampling method obtained 225 research samples. Hypothesis testing in this study using multiple regression analysis. Test results show that audit tenure does not affect audit quality, auditor reputation does not affect audit quality while operating complexity affects on tenure audit relationship with audit quality and auditor reputation with audit quality. ABSTRAK Penelitian ini menguji pengaruh tenure audit dan reputasi auditor terhadap kualitas audit dengan kompleksitas operasi sebagai variabel moderasi. Kasus Enron yang melibatkan Arthur Andersen menyebabkan pembatasan tenure audit. Kualitas audit diukur dengan akrual lancar sedangkan tenure audit diukur dengan menghitung tahun dimana auditor yang sama telah melakukan perikatan dengan auditee, reputasi auditor diukur dengan menggunakan kelompok jumlah rekan dan kompleksitas operasi diukur dengan menggunakan jumlah anak perusahaan. Penelitian ini difokuskan pada perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia tahun 2011 sampai dengan 2015, dengan menggunakan motode purposive sampling diperoleh 225 sampel penelitian. Pengujian hipotesis dalam penelitian ini menggunakan analisis regresi berganda. Hasil pengujian menunjukkan bahwa tenure audit tidak berpengaruh terhadap kualitas audit, reputasi auditor tidak berpengaruh pada kualitas audit sedangkan kompleksitas operasi berpengaruh pada hubungan tenure audit dengan kualitas audit dan reputasi Auditor dengan kualitas audit. JEL Classification: M42, M41, G02

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International effects of the Andersen accounting and auditing scandals: Some evidence from the UK, US and Australian stock markets

Corporate Ownership and Control ◽

10.22495/cocv4i3c1p5 ◽

2007 ◽

Vol 4 (3) ◽

pp. 220-232

Author(s):

Morrison Handley-Schachler ◽

Steven Li

Keyword(s):

Stock Returns ◽

Abnormal Returns ◽

Financial Information ◽

Audit Opinion ◽

Study Methodology ◽

Market Perceptions ◽

The Uk ◽

Arthur Andersen ◽

Total Stock ◽

Event Study Methodology

In this paper, we use event study methodology to examine the effect of two highly publicized accounting failures, at Enron and WorldCom both audited by Arthur Andersen, on the total stock returns of some companies in the UK also audited by Arthur Andersen. The results vary substantially between countries. We find no evidence of a significant impact in the UK or US. There is some evidence of negative abnormal returns at the time of the Enron scandal in Australia. However, this reaction was very short-lived and the negative abnormal returns on the stocks of Andersenaudited companies had been fully recovered within a week. Our results suggest that sharing an auditor with a firm that has issued corrections to accounts which have previously received an unqualified audit opinion does not significantly affect market perceptions of firms’ value, which suggests that the choice of auditor has little, if any, impact on market perceptions of the reliability of published financial information.

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Tenure Audit, Reputasi Auditor dan Kualitas Audit pada Perusahaan Manufaktur : Analisis Kompleksitas Operasi sebagai Pemoderasi

Jurnal Riset Akuntansi & Perpajakan (JRAP) ◽

10.35838/jrap.v5i01.165 ◽

2018 ◽

Vol 5 (01) ◽

pp. 1-13

Author(s):

Amirul Hadi Khasani ◽

Amilin Amilin ◽

Choirul Anwar

Keyword(s):

Sampling Method ◽

Audit Quality ◽

Stock Exchange ◽

Peer Group ◽

Jel Classification ◽

Test Results ◽

Manufacturing Companies ◽

Purposive Sampling ◽

Arthur Andersen ◽

Auditor Reputation

ABSTRACT This study examines the influence of audit tenure and auditor reputation on audit quality with operational complexity as a moderating variable. The Enron case involving Arthur Andersen led to the limitation of the audit tenure. Audit quality is measured by current accrual while audit lag is measured by calculating the year in which the same auditor has committed to the auditee, the auditor’s reputation is measured by the peer group amount and the operating complexity is measured using the number of subsidiaries. This study focused on manufacturing companies listed on the Indonesia Stock Exchange 2011 to 2015, using purposive sampling method obtained 225 research samples. Hypothesis testing in this study using multiple regression analysis. Test results show that audit tenure does not affect audit quality, auditor reputation does not affect audit quality while operating complexity affects on tenure audit relationship with audit quality and auditor reputation with audit quality. ABSTRAK Penelitian ini menguji pengaruh tenure audit dan reputasi auditor terhadap kualitas audit dengan kompleksitas operasi sebagai variabel moderasi. Kasus Enron yang melibatkan Arthur Andersen menyebabkan pembatasan tenure audit. Kualitas audit diukur dengan akrual lancar sedangkan tenure audit diukur dengan menghitung tahun dimana auditor yang sama telah melakukan perikatan dengan auditee, reputasi auditor diukur dengan menggunakan kelompok jumlah rekan dan kompleksitas operasi diukur dengan menggunakan jumlah anak perusahaan. Penelitian ini difokuskan pada perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia tahun 2011 sampai dengan 2015, dengan menggunakan motode purposive sampling diperoleh 225 sampel penelitian. Pengujian hipotesis dalam penelitian ini menggunakan analisis regresi berganda. Hasil pengujian menunjukkan bahwa tenure audit tidak berpengaruh terhadap kualitas audit, reputasi auditor tidak berpengaruh pada kualitas audit sedangkan kompleksitas operasi berpengaruh pada hubungan tenure audit dengan kualitas audit dan reputasi Auditor dengan kualitas audit. JEL Classification: M42, M41, G02

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Freedom Indices and Capital Asset Pricing Model: Some Malaysian Evidence

International Journal of Management, Finance and Accounting ◽

10.33093/ijomfa.2020.1.1.1 ◽

2020 ◽

Vol 1 (1) ◽

pp. 1-21

Author(s):

Ying Tay Lee ◽

Devinaga Rasiah ◽

Ming Ming Lai

Keyword(s):

Human Rights ◽

Asset Pricing ◽

Stock Returns ◽

Firm Size ◽

Explanatory Power ◽

Least Square ◽

Press Freedom ◽

Capital Asset Pricing ◽

Capital Asset ◽

Cross Sectional

Human rights and fundamental freedoms such as economic, political, and press freedoms vary widely from country to country. It creates opportunity and risk in investment decisions. Thus, this study is carried out to examine if the explanatory power of the model for capital asset pricing could be improved when these human rights movement indices are included in the model. The sample for this study comprises of 495 stocks listed in Bursa Malaysia, covering the sampling period from 2003 to 2013. The model applied in this study employed the pooled ordinary least square regression estimation. In addition, the robustness of the model is tested by using firm size as a controlled variable. The findings show that market beta as well as the economic and press freedom indices could explain the cross-sectional stock returns of the Malaysian stock market. By controlling the firm size, it adds marginally to the explanation of the extended CAP model which incorporated economic, political, and press freedom indices.

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