Title : Financial Statement, Geographic Proximity, and Readability Footnotes: The Moderating Effect of the Audit Fee
Authors:
- Harymawan Faith
- Suham Cahyono
- Mohammad Nasih
- Khairul Anuar Kamaruddin
Department : Accounting
Journal Name : Humanities and Social Sciences Letters Kinds of Journal: Q3
Keywords : Audit Fees, Financial Statement Footnotes, Geographic Proximity, Governance, Indonesian Settings, Moderating Effect, Readability.
Abstract:
The paper aims to investigate the relationship between geographic proximity and the readability of financial statements footnotes, which are important sources of information for stakeholders before making decisions about the firm. Our Study Focuss on Examination of the Impact of Distance and Audit Fees on the Dynamics of Auditors Relationship when it comes to generating or evaluating complex complex finance statement footnotes. The sample for this study consists of 1,117 firm-year observations from firms listed on the Indonesia Stock Exchange (IDX) from 2018-2020. We employee fixed-effect regression and selection bias testing to ensure the robustness of the results. The author of find that geographic proximity between auditors and clients has an impact on the readability of financial statements footnotes, particularly when the distance between the clients and auditors is closer, which may make it more challengenging to read financial statements. Additionally, the interaction between audit fees and geographic proximity can make it easier to read financial statement footnotes. Our Finding Suggest That Closer Geographic
Proximity does not provide information advantages regarding hard-to-point financial statements footnotes, and these results are robust to several endogeneity and robustness tests. Our paper contributes to filling the gap between the auditors-client relationships in hard-to-point financial statements footnotes, which are measured by geographic proximity and audit fees, and how auditors and clients can work best in auditing.
For details : https://doi.org/10.18488/73.v11i4.3517
