IMPACT OF AUDIT QUALITY ON QUALITY OF FINANCIAL STATEMENTS IN BANKING COMPANIES LISTED ON IDX

Abstract

The goal of this study was to ascertain whether the quality of financial statements impacted by the audit quality. The samples used in this study amounted to 45 samples, which focused on a banking company that was listed on the Indonesia Stock Exchange. Purposive sampling procedures were employed to obtain the samples, and outlier data was subtracted. The study's secondary data was obtained from the Indonesia Stock Exchange which is then processed. Audit quality variable in this study were measured using dummy variables, where big four public accountants were assigned a value of one whereas non-big four public accountants were assigned a value of zero. The ratio of return on equity serves as a proxy for the quality of financial reporting variable. The normality, heteroscedasticity, autocorrelation, and outlier tests are the classic assumption tests used in this study. Simple linear regression was utilized to evaluate the premise of this study. According to the findings of the tests that were conducted, the quality of the audit has an impact on the quality of the financial statements.