Title: Chief Risk Officer and Audit Fee: An Investigation from Financial Industries in Indonesia
Authors:
- Vina Kusuma Andriani
- Iman Harymawan
- Suhaily Hasnan
Department: Akuntansi
Journal Name: Jurnal Ekonomi dan Bisnis
Kinds of Journal: Sinta 2
Keywords: Audit fee, CRO, ERM, firm risk, governance
Abstract:
The appointment of a CRO (Chief Risk Officer) influences the implementation of ERM (Enterprise Risk Management), which reduces risk and lowers audit costs. Financial Services Authority Regulation No.17/2014 in Indonesia requires companies to have an RMC (Risk Management Committee), which is different from a CRO equivalent to a C-Level. This study examines the impact of a CRO on external audit costs. The data consists of financial companies listed on the Indonesia Stock Exchange (IDX) from 2011 to 2020. The results show that companies using a CRO have lower risk, thereby reducing audit costs. Additionally, the expertise of a CRO also impacts a higher ERM, which in turn affects the reduction of audit costs. This study contributes to the practical world by supporting the appointment of a CRO to reduce company risk. Thus, the company can deliver better performance.
For details: https://ejournal.uksw.edu/jeb/article/view/9322
