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

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

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



Article Info

Publish Date
30 Nov 2023

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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Journal Info

Abbrev

wsaf

Publisher

Subject

Economics, Econometrics & Finance

Description

Journal of Accounting & Finance is a scientific publication published by Westscience Press, which aims to be a creative forum for academics, professionals, researchers, and students in the fields of Accounting and Finance including the fields of Auditing, Accounting Information Systems, Corporate ...