Open Access Article SciPap-1110
Role of Auditor Specialization in Moderating Corporate Governance and Quality of Audit Reporting in Indonesian Manufacturing Companies
by Ewing Yuvisa Ibrani 1,* iD icon and Yenny Dwi Handayani 2,* iD icon

1 Accounting, Economic and Business Faculty, Sultan Ageng Tirtayasa University, Jl. Raya Jakarta Km.04 Pakupatan, Serang 42122, Indonesia

2 Accounting, , Economic and Business Faculty, Mercu Buana University, Meruya selatan No.1., Jakarta 34788., Andorra

* Authors to whom correspondence should be addressed.

Abstract: This study aims to examine the effect of corporate governance mechanisms on audit reporting. Whereas the specific purpose of this study was to investigate the impact of the number of audit committees, the role of independent (non-executive) board members, institutional ownership, and ownership concentration on the quality of audit reporting. Besides, this study also examines whether the role of the external auditor's reputation can moderate the relationship of corporate governance mechanisms to the quality of audit reporting. The results of testing of 189 units of analysis of manufacturing companies in Indonesia, obtained evidence that the size of the board of commissioners, the proportion of independent commissioners, institutional ownership influential and significant effect on the quality of audit reporting. Meanwhile, the audit committee, auditor industry specialization, ownership concentration proved not to affect the quality of audit reporting. For testing the external auditor's moderating variable reputation proxied by industry specialization, it turns out that only the relationship between the size of the board of commissioners and ownership concentration on audit reporting quality is proven to be moderated by the auditor industry specialization.

Keywords: Audit Committee, Ownership Concentration, Institutional Ownership, Auditor Industry Specialization, Indonesia, Independent Commissioners

JEL classification:   M12 - Personnel Management • Executives; Executive Compensation,   M21 - Business Economics,   M42 - Auditing,   M48 - Government Policy and Regulation

SciPap 2021, 29(2), 1110;

Received: 29 June 2020 / Revised: 5 October 2020 / Accepted: 16 February 2021 / Published: 22 April 2021