THE INFLUENCE OF POLITICAL CONNECTIONS ON AUDIT FEES: THE EFFECTIVENESS OF AUDIT COMMITTEES AND INDEPENDENT BOARDS OF COMMISSIONERS AS MODERATION VARIABLES

Title: THE INFLUENCE OF POLITICAL CONNECTIONS ON AUDIT FEES: THE EFFECTIVENESS OF AUDIT COMMITTEES AND INDEPENDENT BOARDS OF COMMISSIONERS AS MODERATION VARIABLES

Author: FITRI NURJANAH

Affiliations: Masters Program in Accounting, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia

Publisher: Universitas Airlangga

Abstract

The aim of this research is to prove the influence of political connections on audit fees by moderating the effectiveness of the audit committee and independent board of commissioners. The data analysis method used is descriptive statistics and hypothesis testing using multiple linear regression analysis and moderated regression analysis using the SPSS 20 application. The population in this research is all companies listed on the Indonesia Stock Exchange during 2015-2018. This research uses a sample size as many as 584 companies. Audit fees are measured using the natural logarithm of audit fees, political connections are measured using politically exposed persons in Indonesian banking regulations, effectiveness is measured using a composite index, while the independent board of commissioners is measured using the ratio of the independent board of commissioners. Based on the results of the analysis and discussion previously explained, the research results show that (1) political connections have a significant positive effect on audit fees, (2) the effectiveness of the audit committee weakens the influence of political connections on audit fees, (3) an independent board of commissioners weakens the influence of political connections towards audit fees.

Keywords: audit fees, independent board of commissioners, audit committee effectiveness, political connections

Sources: http://repository.unair.ac.id/92611/