Amilia Zulfa


As a tool to ensure the credibility of financial reports, appointing an external auditor on state-owned enterprises (SOE) is an exciting topic of study since SOE acts as an agent of development that pursues profit only. This study aims to investigate the behavior of Indonesian SOE in the selection of quality auditors by focusing on the determinants of state ownership, size, and complexity. Using a sample of central SOE and local SOE listed on the Indonesia Stock Exchange in 2014-2020, hypothesis testing was carried out using the logistic regression method. The results show that state ownership is negatively correlated with the appointment of Big-4 auditors. Meanwhile, this study reveals that both size and complexity firm variables are positively correlated with the work of Big-4 auditors.

Teks Lengkap:



Alhababsah, S. (2019). Ownership Structure and Audit Quality: An Empirical Analysis Considering Ownership Types in Jordan. Journal of International Accounting, Auditing and Taxation.

Ali, S., & Aulia, M.R. (2015). Audit Firm Size, Auditor Industry Specialization and Audit Quality: An Empirical Study of Indonesian State-Owned Enterprises. Research Journal of Finance and Accounting, 6, 1-14.

Alzeaideen, K. A., & AL-Rawash, S. Z. (2018). The Effect of Ownership Structure and Corporate Debt on Audit Quality: Evidence from Jordan. International Journal of Economics and Financial Issues, 8(3), 51–58.

Ben‐Hassoun, A., Aloui, C., & Ben‐Nasr, H. (2018). Demand for audit quality in newly privatized firms in MENA region: Role of internal corporate governance mechanisms audit. Research in International Business and Finance, 45, 334–348

Carlos, Ann M. (1992). Principal-agent problems in early trading companies: A tale of two firms. The American Economic Review, Vol. 82/2, 140-145.

Chen, L., Huang, J., & Chen, X. (2020). Mixed-ownership reform and auditor choice: evidence from listed state-owned enterprises. China Journal of Accounting Studies, 8(3), 435–469.

Darmadi, S. (2016). Ownership concentration, family control, and auditor choice: Evidence from an emerging market. Asian Review of Accounting, 24(1), 19–42.

De Angelo, L. E. (1981). Auditor size and audit quality. Journal of Accounting and Economics, 3(3), 183–199.

DeFond, M., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2-3), 275–326.

El-Ghoul, S., Guedhami, O., Lennox, C., and Pittman, J. A. (2007), "Ownership structure, agency problems, and auditor choice: evidence from Western European firms", working paper, University of Alberta, Edmonton, August.

Fan, J. P. H. and Wong, T. J. (2005), "Do external auditors perform a corporate governance role in emerging markets? Evidence from East Asia", Journal of Accounting Research, Vol. 43 No. 1, pp. 35-72

Groff, Maja Zaman & Trobec, Domen & Igličar, Aleksander. (2017). Audit fees and the salience of financial crisis: Evidence from Slovenia. Economic Research-Ekonomska Istraživanja. 30. 922-938. 10.1080/1331677X.2017.1311233.

Guedhami, O., Pittman, J. A., & Saffar, W. (2009). Auditor choice in privatized firms: Empirical evidence on the role of state and foreign owners. Journal of Accounting and Economics, 48(2-3), 151–171.

Gul, F. A., Hsu, A. W., & Liu, S. H.-T. (2017). Parent-Subsidiary Investment Layers and Audit Fees. Journal of Accounting, Auditing & Finance, 0148558X1769676.

Habib, Ahsan & Wu, Julia & Bhuiyan, Md. Borhan & Sun, Xuan. (2019). Determinants of auditor choice: Review of the empirical literature. International Journal of Auditing. 23. 10.1111/ijau.12163.

Hoyt, R., & Khang, H. (2000), On the demand for corporate property insurance. Journal of Risk and Insurance, 67, 91-107.

Johnson, S., & Mitton, T. (2003). Cronyism and capital controls: Evidence from Malaysia. Journal of Financial Economics, 67(2), 351–382.

Kinney, J. R. Jr. and L. S. McDaniel, 1989, Characteristics of firms correcting previously reported quarterly earnings, Journal of Accounting and Economics, Vol. 11, No. 1, pp. 71–93.

Knechel, W. & Niemi, Lasse & Sundgren, Stefan. (2008). Determinants of Auditor Choice: Evidence from a Small Client Market. International Journal of Auditing. 12. 65 - 88.

Kostova, T., Nell, P. C., & Hoenen, A. K. (2016). Understanding Agency Problems in Headquarters-Subsidiary Relationships in Multinational Corporations: A Contextualized Model. Journal of Management, 44(7), 2611–2637.

Li, Xintao. (2019). The Effect of State Ownership on Audit quality: Evidence from Chinese Public Listed Firms MSc in Accounting & Financial Management. 10.13140/RG.2.2.20306.09925.

Ngo, M., Tran, T & Ho, K. (2020). Determinants of the choice of a big four auditor in the Vietnamese Stock Market.Accounting, 6(5), 671-680.

Niemi, L. (2005). Audit effort and fees under concentrated client ownership: Evidence from four international audit firms. The International Journal of Accounting, 40(4), 303–323.

Odum, Augustine & Egbunike, Chinedu. (2019). External Auditor Selection Choice: A Multinomial Logistic Regression Approach. Indonesian Journal of Contemporary Accounting Research. 1. 9. 10.33455/ijcar.v1i1.78.

OECD (2018), Ownership and Governance of State-Owned Enterprises: A Compendium of National Practices.

Prakoso, Imam. (2017). State-Owned Company Decision On Choosing Auditor: Evidence From Earning Quality Analysis. Asia Pacific Fraud Journal. 1. 59. 10.21532/apfj.

Radygin, A., Simachev, Y., & Entov, R. (2015). The state-owned company: "State failure" or "market failure"? Russian Journal of Economics, 1(1), 55–80.

Revier, Elke dan Ralph Schroe. Determinants of Auditor Choice. Published Thesis. Universiteit Gent. 2009.

Tauringana, Venancio; Clarke, Steve (2000). The demand for external auditing: managerial share ownership, size, gearing and liquidity influences. Managerial Auditing Journal, 15(4), 160–168.

Zureiget (2011). The Effect of Ownership Structure on Audit Quality: Evidence from Jordan. International Journal of Business and Social Science, 2(10), 38-46

Wang, Q., Wong, T. J., & Xia, L. (2008). State ownership, the institutional environment, and auditor choice: Evidence from China. Journal of Accounting and Economics, 46(1), 112–134.

Watts, R. L., & Zimmerman, J. L. (1983). Agency problems, auditing, and the theory of the firm: Some evidence. The Journal of Law and Economics, 26(3), 613–633.



  • Saat ini tidak ada refbacks.

Anda Pengunjung Ke- Flag Counter