A 2026 study
by Nia Afriha and Luke Suciyati Amna from Bandar Lampung University finds that
audit tenure, audit firm size, and audit fees play a crucial role in
strengthening the integrity of financial statements in the banking sector. The
findings highlight the importance of high-quality auditing in maintaining
public trust in financial reporting.
Amid ongoing
issues of financial reporting violations in Indonesia’s banking industry,
including cases involving fictitious loans, the need for transparent and
reliable financial statements has become increasingly urgent. Inaccurate
reports can mislead investors, regulators, and the public in making economic
decisions.
The
researchers applied a quantitative approach by examining 23 banks listed on the
Indonesia Stock Exchange during the 2022–2024 period. Using data from annual
reports, they analyzed 69 firm-year observations through multiple linear
regression after passing standard statistical tests.
Key
Findings
The study
reveals several important insights:
- Audit tenure has a positive and significant effect on financial statement integrity
- Audit firm size, particularly large firms (Big Four), shows the strongest influence
- Audit fees that are proportionate improve the quality and reliability of reports
- All three variables simultaneously have a significant impact on financial reporting integrity
Statistically,
these factors explain 15.6% of the variation in financial statement
integrity, with the remainder influenced by other variables not included in the
model.
Why These
Factors Matter
Nia Afriha
explains that an optimal audit duration allows auditors to understand a
company’s operations without compromising independence. A tenure that is too
short limits insight, while one that is too long may reduce objectivity.
Luke Suciyati
Amna emphasizes the importance of large audit firms. According to her, larger
firms have stronger resources, better quality control systems, and higher
reputational stakes, enabling them to deliver more reliable audits.
Audit fees
also play a key role. Adequate fees allow auditors to allocate sufficient time
and effort, resulting in more thorough audit procedures and reduced risk of
misstatements.
Real-World
Implications
The findings
carry broad implications:
- For banks: improved transparency and investor confidence
- For regulators: evidence to support policies on auditor rotation and audit standards
- For companies: encouragement to engage reputable auditors with adequate fees
- For the public: greater assurance of trustworthy financial information
The study
also reinforces agency theory, which highlights the importance of external
monitoring mechanisms in reducing conflicts of interest between management and
shareholders.
Author
Profiles
- Nia Afriha –Universitas Bandar Lampung
- Luke Suciyati Amna –Universitas Bandar Lampung
Source
Afriha, N.,
& Amna, L. S. (2026). Audit Tenure, KAP Size, and Audit Fees Effects on
Financial Statement Integrity. International Journal of Business and
Applied Economics (IJBAE), Vol. 5 No. 2, 619–630.
DOI: https://doi.org/10.55927/ijbae.v5i2.6
URL: https://journalijbae.my.id/index.php/ijbae
0 Komentar