The Effect of Audit Quality, Auditor Independence, and Financial Reporting Transparency on Internal Control Effectiveness: A Case Study of a Public Company in Indonesia

Authors

  • Trinandari Prasetyo Nugrahanti IKPIA Perbanas Institute Jakarta
  • Eko Sudarmanto Universitas Muhammadiyah Tangerang
  • Mega Andani STIE Nasional Banjarmasin
  • Loso Judijanto IPOSS Jakarta, Indonesia

DOI:

https://doi.org/10.58812/wsaf.v1i03.370

Keywords:

Audit Quality, Auditor Independence, Financial Reporting Transparency, Internal Control, Public Company

Abstract

This study investigates the intricate dynamics of corporate governance in publicly traded companies in Indonesia, focusing particularly on the interaction of Audit Quality, Auditor Independence, Financial Reporting Transparency, and Internal Control Effectiveness. The present study showcases the development of a comprehensive measurement model, hence offering empirical support for the reliability and validity of the chosen constructs. The utilization of structural equation modeling reveals statistically significant positive correlations, indicating that heightened levels of Audit Quality, Auditor Independence, and Financial Reporting Transparency are associated with enhanced Internal Control Effectiveness. The model fit assessment confirms the adequacy of the proposed structural equation model in capturing the observed covariance structure. The explained variance in Internal Control Effectiveness highlights the substantial impact of these governance elements. These findings offer valuable insights for stakeholders and policymakers seeking to fortify corporate governance practices in the Indonesian business landscape.

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Published

2023-11-30

How to Cite

Nugrahanti, T. P., Sudarmanto, E., Andani, M., & Judijanto, L. (2023). The Effect of Audit Quality, Auditor Independence, and Financial Reporting Transparency on Internal Control Effectiveness: A Case Study of a Public Company in Indonesia. West Science Accounting and Finance, 1(03), 108–118. https://doi.org/10.58812/wsaf.v1i03.370

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Vol. 1 No. 03 (2023): West Science Accounting and Finance

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Articles

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Copyright (c) 2023 Trinandari Prasetyo Nugrahanti, Eko Sudarmanto, Mega Andani, Loso Judijanto

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