Title: CONNECTION OF CORPORATE POLITICS AND AUDITOR SELECTION DECISIONS WITH PROFIT MANAGEMENT AS A MODERATION VARIABLE
Author: PUTRI ARMADIYANTI
Affiliations: Master of Accounting Study Program, Faculty of Economics and Business, Universitas Airlangga Surabaya
Publisher: Universitas Airlangga
Abstract
Indonesia offers interesting conditions for exploring research on political connections, as it is an emerging market country with a history of strong political connections in business. This research aims to empirically test the influence of political connections held by people within the company on auditor selection decisions and whether the influence between political connections and auditor selection is moderated by earnings management behavior. This research uses a sample of all companies from all sectors listed on the Indonesia Stock Exchange (BEI) in 2015 except 405 companies in the financial and insurance industry sector. The analysis techniques used are logistic regression analysis and moderated regression analysis. The results of the research reveal that companies with politically connected boards of commissioners and directors have a significant positive influence on auditor selection decisions, meaning that companies with political connections tend to choose industry specialist auditors as the company's external auditors. The results also reveal that earnings management does not moderate the influence of a company's political connections on auditor selection decisions. This research provides new insights into the use of political connections in the business environment, especially in auditor selection decisions in Indonesia.
Keywords: Political Connection, Earning Management, Auditor Choice
Sources: http://repository.unair.ac.id/81497/
