THE INFLUENCE OF AUDIT QUALITY, AUDIT OPINION, AND SIZE

OF PUBLIC ACCOUNTANT FIRM ON

AUDIT REPORT LAG

(Empirical Study on Manufacturing Companies Listed in Indonesia Stock

Exchange 2014-2016)

By:

Raisa Rindraidah

1113082100002

ACCOUNTING DEPARTEMENT

INTERNATIONAL CLASS PROGRAM

THE FACULTY OF ECONOMICS AND BUSINESS

STATE ISLAMIC UNIVERSITY SYARIF HIDAYATULLAH

JAKARTA

2018

ii

The Influence of Audit Quality, Audit Opinion, and Size of Public

Accountant Firm on Audit Report Lag

(Empirical Study on Manufacturing Company Listed in Indonesia Stock

Exchange 2014-2016)

Bachelor Thesis

Submitted to Faculty of Economics and Business

In Partial Fulfillment of the Requirement for

The Bachelor of Economics in Accounting

By:

Raisa Rindraidah

ID. 1113082100002

Thesis Advisor

Atiqah, SE., MS.AK

ID. 19820120 2009 12 2 004

INTERNATIONAL CLASS PROGRAM

ACCOUNTING DEPARTMENT

FACULTY OF ECONOMICS AND BUSINESS

STATE ISLAMIC UNIVERSITY SYARIF HIDAYATULLAH

JAKARTA

2018

iii

CERTIFICATION OF COMPREHENSIVE EXAM

Today, Friday, July 14th, 2017 we have administered a comprehensive

examination to:

1. Name : Raisa Rindraidah

2. Student ID : 1113082100002

3. Department : Accounting (International Program)

4. Thesis Title : The Influence of Audit Quality, Audit Opinion, and Size of

Public Accountant Firm on Audit Report Lag (Empirical Study on

Manufacturing Company Listed in Indonesia Stock Exchange 2014-2016)

After careful observation and attention appearance and capabilities relevant for

comprehensive exam process, it was decided that above student passed and given

opportunity to continue to thesis as one of requirement to obtain Bachelor of

Economics in the Faculty of Economics and Business State Islamic University

Syarif Hidayatullah Jakarta.

Jakarta, July 14th, 2017

Hepi Prayudiawan, SE.,MM.,Ak.,CA ( )

ID 19720516 200901 1 006 Examiner 1

Zuwesty Eka Putri, M.Ak ( )

ID 19800416 200901 2 006 Examiner 2

iv

CERTIFICATION OF THESIS EXAM

Today, Wednesday, May 23th, 2017 has been conducted on the thesis

examination to:

1. Name : Raisa Rindraidah

2. Student ID : 111308210000

3. Department : Accounting (International Program)

4. Thesis Title : The Influence of Audit Quality, Audit Opinion, and Size of

Public Accountant Firm on Audit Report Lag (Empirical Study on

Manufacturing Company Listed in Indonesia Stock Exchange 2014-2016)

After careful observation and attention appearance and capabilities relevant for

thesis exam process, it was decided that above student passed and the thesis was

accepted as one of requirement to obtain Bachelor of Economics in the Faculty of

Economics and Business State Islamic University Syarif Hidayatullah Jakarta.

Jakarta, May 23th, 2018

Hepi Prayudiawan, SE.,MM.,Ak.,CA ( )

ID 19720516 200901 1 006 Head of Examiner

Atiqah,SE.,MS.AK ( )

ID 19800416 200901 2 006 Secretary

Fitri Damayanti,SE.,M.Si ( )

ID 19810731 200604 2 003 Expert Examiner

v

STATEMENET SHEET OF AUTHENTICITY SCIENTIFIC WORKS

Signatures below:

Name : Raisa Rindradah

Student ID : 1113082100002

Faculty : Economics and Business

Department : Accounting

Hereby declare that in the writing of this thesis, I

1. Do not use other people’s ideas without being able to develop an

accountable

2. Do not do plagiarism of other people’s work manuscript

3. Do not use other people’s work without mentioning the original source or

without the owner’s permission.

4. Own work and able to work responsible for this work

If the future, there is demand from the other side of my work and have been

accountably proved, was found evidence that I have violated the above statement,

then i am ready to be sanction according to rules applicable in the Faculty of

Economics and Business State Islamic University Syarif Hidayatullah Jakarta.

This statement truly made with sincere

Raisa Rindraidah

vi

CURRICULUM VITAE

I. PERSONAL IDENTITY

• Name : Raisa Rindraidah

• Place and Date of Birth : Jakarta, November 8th, 1994

• Address : Bojong Depok Baru DK/5.

Bojonggede-Bogor

• Phone : 0857-7261-6315

• Email : rairindraidah@gmail.com

II. FORMAL EDUCATION

• State Islamic University Syarif Hidayatullah Jakarta (2013-2018)

• SMAN 2 Cibinong (2009-2012)

• SMPN 1 Bojonggede (2006-2009)

• SD Muhammadiyah Bojonggede (2000-2006)

III. INFORMAL EDUCATION

• KAHFI Motivator School (2015)

• Latanza Dorm (2013)

IV. Organization

• Manager of Incoming Program AIESEC UIN Jakarta

V. CONFERENCE AND TRAINING

• Participant of Student Workshop Short Culture, Japan

• Delegate of Asia Pacific Future Leader Conference, Malaysia

vii

• Leadership Training by ESQ Leadership Center

• Seminar by U.S. Embassy Jakarta and FEB UIN Syarif

Hidayatullah Jakarta, “Future Business Opportunities in the Global

Islamic Economy”

• Training “Forensic Audit to Enhance Accountability in the Public

Sector” by The 16th ATV FEB University of Indonesia.

• Basic Training Sharia Banking Program by Center for Islamic

Economics Studies (C.O.I.N.S)

• Seminar by Pusat Pembinaan Profesi Keuangan (PPPK) Sekretariat

Jenderal KementrianKeuangan and FEB UIN Syarif Hidayatullah

Jakarta. “Sosialisasi Perkembangan Terkini Profesi di Bidang

Akuntansi dan Ujian Sertifikasi Akuntan (CA) dan Akuntan Publik

(CPA)”

• Seminar Master of Ceremony “Be a Professional Master of

Ceremony”

VI. FAMILY BACKGROUND

1. Father : Hasbi Indra

2. Mother : Siti Zubaedah

3. Child : 2 from 2 siblings

viii

Pengaruh Kualitas Audit, Opini Audit, dan Ukuran Kantor Akuntan Publik

pada Audit Report Lag (Studi Empirik pada Perusahaan Manufaktur yang

terdaftar pada Bursa Efek Jakarta tahun 2014-2016)

ABSTRAK

Tujuan dari penelitian ini adalah untuk mengetahui pengaruh kualitas audit, opini

audit, dan ukuran kantor akuntan publik pada audit report lag. Penelitian ini

menggunakan kuantitatif dan analisis regresi berganda sebagai metode statistik.

Penelitian ini menggunakan laporan keuangan peusahaan manufaktur tahun 2014-

2016. Variabel bebas kualitas audit diukur dengan menggunakan dengan biaya

audit, audit opini dan ukuran kantor akuntan publik menggunkan variabel dummy,

sedangkan variabel terikat audit report lag menggunakan jumlah hari dari

berakhirnya laporan keuangan sampai auditor mengaudit laporan keuangan. Hasil

dari uji T menunjukkan bahwa kualitas audit dan opini audit berpengaruh pada

audit report lag, sedangkan ukuran kantor akuntan publik tidak berpengaruh pada

audit report lag.

Kata Kunci: Kualitas Audit, Opini Audit, Ukuran Kantor Akuntan Publik,

Audit Report Lag, Perusahaan Manufaktur

ix

The Influence of Audit Quality, Audit Opinion, and Size of Public Accountant

Firm on Audit Report Lag (Empirical Study of Manufacturing Company listed

in Indonesia Stock Exchange 2014-2016)

ABSTRACT

The purpose of this research was to examine the influence of audit quality, audit

opinion, and size of public accountant firm on audit report lag. The research used

a quantitative analysis approach and multiple regression as the statistical method.

It examined manufacturing company listed in Indonesia Stock Exchange period

2014-2016. The independent variables Audit Quality was measured by Audit Fee,

Audit Opinion and Size of Public Accountant Firm by dummy variable while the

dependent variable was measured by the number of days from the financial year-

end to the time when auditor sign the report of the firm. The result of T-test showed

that audit quality and audit opinion influenced audit report lag while the size of

public accountant firm did not influence audit report lag.

Keywords: Audit Quality, Audit Opinion, Size of Public Accountant Firm,

Audit Report Lag, Manufacturing Company

x

PREFACE

Alhamdulillahirobbila’lamin,

All praise and gratitude to Allah SWT, the creator of the universe and

mankind because of His blessing, mercy, and guidance the author finally could

finish the thesis with all the efforts the author has been through. The title of this

bachelor thesis is “The Influence of Audit Quality, Audit Opinion, and Size of

Public Accountant Firm on Audit Report Lag (Empirical Study on Manufacturing

Company listed in Indonesia Stock Exchange 2014-2016). Shalawat and Salaam to

His Messenger, Prophet Muhammad PBUH who has brought the human from the

darkness to the lightness.

The author also feels grateful for every supports and motivation from all

families, lecturers, and friends, thus this research could be completed:

1. My special thanks to my Dad Hasbi Indra and my Mom Siti Zubaedah who

never stop to support and pray me, motivate me morally and financially.

Then, for my older brother Alvin Rindra Fazrie and my sister Maria Ulfa

who disposed to be the proofreader then to make the structure and grammar

in this research better.

2. The author also give great thanks to all lecturers who already shared their

knowledge and inspiration. Especially to Ms. Atiqah as the thesis advisor

who guided the author during the research, to Mr. Hepi Prayudiawan as

Secretary of Accounting Department, to Mrs. Yessi Fitria as Head of

Accounting Program, to Mr, Arif Mufraini as Dean of Economics and

Business Faculty, to Ms. Wilda Farah, Ms. Zuwesty, Ms. Yulianti, Ms.

Husnul, Mrs. Rikawati, Ms. Rini, and all the lecturers that the author cannot

mention all. Thank you for all dedications.

3. Thanks to Mr. Mufid Suryani and Ms. Nida who teach the author about

SPSS and give support and motivation.

4. Thanks to Mr. Bonix and all academic staffs for always helping me

administrative things.

xi

5. Kahfi Motivator School, Especially to Om Tubagus Wahyudi, Mba Wie, Ka

Mamduh, Ka Icha, Ka Milki, Ka Iyang, Ka Munir, and all seniors that the

author cannot mention all. Thank you for the knowledge. Then, thank you

to my second family B16 Eagle Eyes.

6. Thanks to Ka Fanny, Ka Rini, Ka Aida, Ka Acha, Faizah, Shara, and Mery

who always bring happiness and joy to the author’s life. Then, my IKIK

Family: Fadhlur, Jamal, Uyi, Apip, Ka Ucup, Ka Icank, Vino, and Ka Fuad.

7. Thanks to Irma and Syarah, thank you for being my partner in every

situation I faced. Thank you for your kindness, support, and motivate.

8. Thanks to Wiwid, Tami, Tiara, Opi, Tia, Denis, Lulu, and Latanza Family

who cannot the author mention all. Thank you for the beautiful memories,

support, and motivate.

9. Thanks to my Classmate of International Accounting Program, Ulan,

Banan, Melinda, Fita, (almh) Indri, Ryan, Afri, Aji, Panji, Putra, and Risky.

Thank you for four years we have spent together and have struggled from

the zero to hero. See you on the top.

10. Thanks to all people who cannot be mentioned by the author.

Finally, with all modesty, the author realizes that this research has some

limitations. Hence, the constructive critics and comments are welcome to improve

the quality of the next research. However, the author expects this research will be

useful for those who need it as well as to give the contributions in academic

enrichment.

Raisa Rindraidah

xii

TABLE OF CONTENTS

Certification of Thesis Advisor ............................................................................ii

CERTIFICATION OF COMPREHENSIVE EXAM ...................................... iii

CERTIFICATION OF THESIS EXAM ............................................................ iv

STATEMENET SHEET OF AUTHENTICITY SCIENTIFIC WORKS ....... v

CURRICULUM VITAE ...................................................................................... vi

ABSTRAK ............................................................................................................ viii

ABSTRACT .......................................................................................................... ix

PREFACE .............................................................................................................. x

TABLE OF CONTENTS .................................................................................... xii

LIST OF TABLES ............................................................................................. xiv

LIST OF FIGURES ............................................................................................ xv

CHAPTER I INTRODUCTION .......................................................................... 1

A. Background ............................................................................................................. 1

B. Problem Formulation .............................................................................................. 9

C. Purposes and Benefits ........................................................................................... 10

CHAPTER II STUDY LITERATURE ............................................................. 12

A. Literature ............................................................................................................... 12

B. Previous Research ................................................................................................. 27

C. Conceptual Framework ......................................................................................... 30

CHAPTER III RESEARCH METHODOLOGY ............................................ 38

A. Scope of Research ................................................................................................. 38

B. Sampling Method .................................................................................................. 38

C. Collection Data Method ........................................................................................ 39

D. Data Analysis Method ........................................................................................... 40

E. Research Variables Operationalization ................................................................. 47

CHAPTER IV FINDING AND ANALYSIS .................................................... 50

A. General Description of Research Object ............................................................... 50

B. Analysis and Discussion ....................................................................................... 51

CHAPTER V CONCLUSION, IMPLICATION, AND

RECOMMENDATION ...................................................................................... 68

xiii

A. Conclusions ........................................................................................................... 68

B. Implications ........................................................................................................... 69

C. Recommendation .................................................................................................. 70

REFFERENCES ................................................................................................. 71

APPENDIXES ..................................................................................................... 79

xiv

LIST OF TABLES

No. Description Page

Table 1.1 List of Companies Laid Off by IDX ....................................................... 6

Table 2.1 Previous Research ............................................................................... 288

Table 3.1 Variable Operationalization .................................................................. 49

Table 4.1 Detail of Research Sample ……………………………………… …... 50

Table 4 2 Descriptive Statistic Analysis 2014-2016 …………………………... 51

Table 4.3 Kolmogorov-Smirnov Test Result ………………………………….. 54

Table 4.4 Multicollinearity Test Result ………………………………….......... 55

Table 4 5 Run Test Result ………………………………………………… ….. 57

Table 4 6 Coefficient of Determination Result ………………………………... 58

Table 4 7 Simultaneous Significant Test Result ………………………………. 59

Table 4 8 Partial Regression Test Result ……………………………………… 60

xv

LIST OF FIGURES

No. Description Page

Figure 2.1 Research Model ................................................................................... 36

Figure 4.1 Normal P-Plot ………………………………………………………. 53

Figure 4.2 Scatterplot Graphic .............................................................................. 56

1

CHAPTER I

INTRODUCTION

A. Background

The audited financial statement is the most reliable source and

reference to accounting information available to external users. (Alkhatib

and Marji, 2012). As stated by FASB, concept statement 2, financial

information must be both relevant and reliable. To be relevant to economic

value, the financial information contained in the year-end final statement

should be disclosure in a timely manner and delivered to users as soon as

practicable after the fiscal year-end (Al-Ajmi, 2008: Alkatib and Marji,

2012).

Based on Ikatan Akuntansi Indonesia (IAI) requires the financial

statement that can be used by users must be understandability, relevance,

reliability, and comparability. The financial statement as information that

must be relevant to decision-making. One of the indicators to measure the

relevancy is timeliness. Timeliness and accuracy are the two criteria

indicating the usefulness of corporate reports. The usefulness of the

information disclosed in the annual report will decrease if the time taken to

complete the auditing process of financial statements increases (Abdulla,

1996). Financial statements are prepared to provide useful information for

making business and economic decisions (Dogan et al., 2007). The

information of financial statement is beneficial for the users to assess the

2

financial condition and performance of related companies. Because of the

limited availability of financial information beyond the financial statements,

the timely release of these financial statements in an emerging market is

vital to ensure a constant flow of capital. However, as required by laws and

regulations. The financial statements can be released by the company after

verification by the external auditor. Consequently, the speed of financial

statements to be released to the public is significantly determined by the

speed of the audit work (Abidin, 2012).

According to Statement of Financial Accounting Standard in 2017

on Kerangka Konseptual Pelaporan Keuangan paragraph 3.29, if there is

undue delay in reporting, the information generated will lose the relevance.

The relevance of financial statement depends on timeliness to deliver the

information that used to take a decision. The information of financial

statement needed by users can be useful if it presented accurately and on

time and otherwise information will lose its benefits if not presented

accurately and on time.

The timeliness of financial reporting depends highly on the

preparation of accounts by company management, the issuance of the

accounts to independent auditors for auditing and the length of time taken

by auditors to complete the audit assignment. The longer the time auditors

devote to complete the audit, the longer the delay in the issuance of the

audited account (Ahmad, 2015). The general purpose of the audited

financial statement is giving the fairly opinion of financial statement in

3

accordance with accounting principles before using by the users. According

to Generally Accepted Auditing Standard (GAAS), there are 10 standards

of Generally Accepted Auditing Standard. These standards were originally

approved by the member of American Institute of Certified Public

Accounting (AICPA). The 10 GAAS which also identifies the three

categories, these are general standard, standards of field work, and standards

of reporting (Boynton, 2006).

Because of that procedure of audit which is done by the auditor for

fulfilling the standards gives the impact of timeliness on the company to

publish the financial statement. The public companies should submit

periodic financial statements, namely annual reports, and mid financial

statements or quarterly financial report which is in Indonesia is every 4

months (divided into quarterly 1, 2, and 3). The annual financial statement

submitted to Badan Pengawas Pasar Modal dan Lembaga Keuangan

(Bapepam-LK) and should be announced to the public. The financial

statement is a tool to deliver financial information regarding the

management’s responsibility for their performance (Novianti, 2012).

In accordance to the regulation in Indonesia, Badan Pengawas

Pasar Modal dan Lembaga Keuangan (Bapepam-LK) requires that

company that listed in Indonesian Stock Exchange (IDX) should publish the

financial statement on time. Based on Peraturan Badan Pengawas Pasar

Modal dan Lembaga Keuangan (Bapepam-LK) No. KEP-346/BL/2011 and

has been refined No. KEP-431/BL/2012 on submission of the financial

4

statement for the public company that is registered in Indonesian Stock

Exchange (IDX). The company should submit the annual report to

Bapepam-LK at least four months before the book year-end. This regulation

starts on August 1, 2012.

Due to the government regulations from Finance Ministry of

Indonesia No: KEP-346/BL/2012 announced that public company in

Indonesia should report periodic financial statement and annual reports to

Badan Pengawas Pasar Modal (Bapepam) which must be accompanied by

an opinion of public accountants who audited the financial statements.

Auditors with carrying out a series of the audit process, if found any material

misstatement in the financial statement, the auditor have a right to give

justification recommendations. This makes the company requires the

services of a public accountant (auditor).

An auditor provides audit services on the client's financial

statements to provide assurance to users of financial statements that the

financial statements have been prepared in accordance with accounting

standards so that financial statements can be relied upon in making

decisions. The decision makers, of course, expect the best results of the audit

so as to make them believe the decision they should take. Audit services is

a means of monitoring the possibility of the conflict of interest between the

owner and managers and the shareholders with a number of different

ownership and can reduce the information asymmetry between managers

5

and stakeholders of the company to allow outsiders to check the validity of

financial statements (Jensen and Meckling, 1976).

On the other hand, if the company which cannot submit the financial

statement until due date, the company will get the administrative sanction

in accordance with Governance Regulation No. 45 year 1995 on

Implementation of Operation in Capital Market Chapter XII article 63 letter

E. Public company that listed in Indonesian Stock Exchange (IDX) will get

sanction 1.000.000 (one million) IDR for days of delay with the maximum

sanction is 500.000.000 (five hundred million) IDR. To avoid the

administrative sanction, the company need to submit the report before the

due date from Bapepam-LK.

However, many companies in Indonesia cannot fulfill the regulation

of Bapepam-LK. PT Energi Mega Persada Tbk (ENGR) and PT Berau Caol

Energy Tbk (BRAU) have been given a first written warning by the

Indonesian Stock Exchange due to submit an interim financial report as

Mach 31, 2013 have not been audited by the public accountant. Based on

obligation of information delivery the rule number I E, the interim audited

financial statement submitted to Indonesian Stock Exchange (IDX) at least

before than three months after the financial year-end. Then, Provision II.6.2

of Rule Number I – H about sanction that Indonesia Stock Exchange gives

second written warning with the penalty is 50.000.000 (fifty million) IDR if

the company do not publish financial statement from the financial year-end

until three months or more. Previously, The Bakrie Group, PT Bakrie

6

Sumatra Plantation Tbk (UNSP) and Bakrieland Development Tbk (ELTY)

imposed a fine 150 million IDR because of late to publish financial

statement (Harian Ekonomi Neraca, 2013). Meanwhile, there are 52

companies recorded until April 1, 2015 have not submitted the financial

statement period 2014, with seven companies not yet required to submit

because the different of company’s fiscal year (Harian Ekonomi Neraca,

2015). In 2016, IDX had recently suspended or suspended temporary to 14

companies that not fulfill the obligation to submit the interim financial

statement on June 30, 2016 and paid the penalty. One company is suspended

and 13 companies extended their suspension since the first session of the

trade effect by October 31, 2016 (Harian Ekonomi Neraca, 2016). In 2017,

According to Chief of Corporate Assessment Divison I, I Gede Nyoman

Netra, there are 16 companies that had not submitted interim financial report

on March 31, 2017 and have not paid any penalty for delay in submitting

the financial statement (Detikfinance, 2017).

Table 1.1

List of Companies Laid Off by IDX

No Company’s Name

1 PT Borneo Lumbung Energi & Metal Tbk

2 PT Berau Coal Energy Tbk

3 PT Bakrie Telecom Tb

4 PT Energi Muda Persada Tbk

5 PT Eterindo Wahanatama Tbk

6 PT Citra Maharika Nusantara Corpora Tbk

7

7 PT Inovisi Infracom Tbk

8 PT Capitalinc Investment Tbk

9 PT Steady Safe Tbk

10 PT Permata Prima Sakti Tbk

11 PT Skybee Tbk

12 PT Sigmagold Inti Perkasa Tbk

13 PT Evergreen Invesco Tbk

14 PT Garda Tujuh Buana Tbk

15 PT Merck Sharp Dohme Pharma Tbk

16 PT Zebra Nusantara Tbk

finance.detik.com/bursa-dan-valas/d-3580122/bei-suspensi-16-

saham-sekaligus

Due to the obligation, the company should aware of the period to

publish the audited financial statement. There is the number of days from

the accounting year end of a company and the audit report date. As

important information conciliator, the audit report is all the time a focus of

audit firms, companies, regulators and investors and its report lag directly

determines the usefulness of decision making. Inordinate audit report lag

(Dibia, 2013) Delays in reporting financial information will clearly impact

on the effectiveness of reports. The timeliness of audit reports is becoming

an important issue as the timing and delivery of the reports will affect the

relevance of financial statements (Dopuch et al., 1986; Field and Walkins,

1991; Jaggi and Tsui, 1999 in Rusmin 2017). The issue of timeliness of

financial reporting has attracted considerable attention from professional

bodies, researchers, regulatory agencies and users of accounting

8

information as an important qualitative characteristic of financial

accounting information. Timely accounting information will lead to

investor confidence and thus enhance market efficiency (Leventis et al.,

2005).

On the other hand, Nelson and Shukeri (2011) found that the audit

opinion as one of the corporate governance’s characteristic influences audit

delay in Malaysia. Then, Arifa (2013) and Lindasari (2015) explained that

audit opinion influence audit report lag, because companies which get

unqualified opinion can be faster to publish its financial report rather than

qualified opinion. And according to Hariza et al (2010) found an influence

of the size of the public accounting firms on auditing’s quality, the auditor

from Big-4 provides a higher quality than the smaller or non-reputable

auditors do.

Based on those reasons, the researcher conducted a study entitled

“The Influence of Audit Quality, Audit Opinion, and Size of Public

Accountant Firm on Audit Report Lag (Empirical Study on Manufacturing

Company Listed in Indonesia Stock Exchange 2014-2016).”

This research is an extension of the previous research done by Dibia

(2013), Fadoli (2015), and Rusmin (2017). The differences of this study

with the previous research are as follows:

1. The variable used in previous research is audit quality which

is auditor industry specialization and auditor reputation as

the proxy (Rusmin, 2017); Solvency, profitability, liquidity,

9

firm size, firm age, audit opinion, and classification of

industry (Fadoli, 2015); Firm age, Firm Size, Big 4, and Firm

Switch (Dibia, 2013). Whereas in this research uses audit

fee as a proxy of audit quality and the addition of two

variables, there are audit opinion and size of public

accountant firm.

2. The population of this research is Manufacturing Company

Listed in Indonesia Stock Exchange at the period 2014-2016.

Meanwhile, the population before is in Nigeria Company

(Dibia, 2011) and Indonesia (Fadoli, 2015) and Rusmin,

2017).

3. The period of this research is 2014-2016, Meanwhile, the

period before is in the previous before is 2008-2011 (Dibia,

2013), 2008-2013 (Fadoli, 2015), and 2010-2011 (Rusmin,

2017).

B. Problem Formulation

From the background above, the problem formulation that will

identify in this research are:

1. Does audit quality influence audit report lag?

2. Does audit opinion influence audit report lag?

3. Does the size of public accountant firm influence audit report

lag?

10

4. Does audit quality, audit opinion, and size of public

accountant firm simultaneously influence audit report lag?

C. Purposes and Benefits

1. Purposes of Research

Based on the problems formulation above, the purposes of

the research are:

a. To analyze the influence of audit quality on audit

report lag.

b. To analyze the influence of audit opinion on audit

report lag.

c. To analyze the influence of the size of public

accountant firm on audit report lag.

d. To analyze the simultaneous influence of audit

quality, audit opinion, and size of public accountant

firm on audit report lag.

2. Benefits of Research

a. Theoretical Contributions

1) Student Accounting Department, this study is used as

reference material for future research and

comparative increase knowledge.

2) Society, as information facilities about the audit

quality, audit opinion, and size of public accountant

11

firm and also as the addition of knowledge about

auditing which may be useful in the future.

3) Subsequent researchers, as a reference for those

parties who will carry out further research on this

topic.

b. Practical contribution

1) Auditor and Public Accountant Firm, provide

information in order to be able to plan the field work

as well as in order to minimize delays in audited

financial report and improving the accuracy of the

audited financial report.

2) Public, as information about auditing, in particular,

the audit report lag to provide empirical evidence the

influence of audit quality, audit opinion, and size of

accountant firm on audit report lag.

12

CHAPTER II

STUDY LITERATURE

A. Literature

1. Agency Theory

Agency theory is the relationship between shareholder as a

principle and manager as an agency. It holds a central role in the

corporate governance literature. Describing fundamental conflict

between self-interested managers and owners, when the formers

have the control of the firm but the latter bear most of the wealth

effects (Laiho, 2011). Jensen and Meckling (1976) described how

lower managerial stakes lead to increases in non-pecuniary spending

by the managers as they do not fully internalize the costs. Agency

problems of this kind generate agency costs.

Jensen’s and Meckling’s insight had also lead to models,

where the ownership structure matters not only in the sense how

much the company insiders own but also in the sense how

concentrated the holdings of the outside shareholders are. Large

shareholders were argued to monitor the management better than

small shareholders as they internalized larger part of the monitoring

costs and had sufficient voting power to influence corporate

decisions. In addition, a range of other mechanisms that either align

the interests of the managers and owners or limit managerial

13

discretion have been suggested to reduce agency costs (Laiho,

2011).

The model the relationship between owners and managers

similar to one between a principal and an agent was the key insight

of Jensen and Meckling (1976). The owners contract the managers

to perform the controlling tasks of a firm, and as both seek to

maximize their own utility and are self-interested a conflict of

interest arises. Then, Jensen and Meckling (1976) define the costs

caused by the divergence of interests between owners and managers

as agency costs consisting of 1) the monitoring expenditures by the

principal, 2) bonding expenditures by the agent and 3) the residual

loss, on which we will be especially focusing on.

Agency costs arise in any situation involving a cooperative

effort by two or more people even though there is no clear-cut

principal-agent relationship. Viewed in this light it is clear that our

definition of agency costs and their importance to the theory of the

firm bears a close relationship to the problem of shirking and

monitoring of team production. Since the relationship between the

stockholders and the managers of a corporation fits the definition of

a pure agency relationship, it should come as no surprise to discover

that the issues associated with the “separation of ownership and

control” in the modern diffuse ownership corporation are intimately

14

associated with the general problem of agency (Jensen & Meckling,

1976).

To control and observe management decisions, principals

(owners) tend to pay monitoring costs which may include, among

others, the costs of preparing and auditing accounting statements and

reports. Thus, the provision of audited financial statements is

monitoring mechanisms that help narrow information gap between

the principals (owners) and the agent (management) and assure

shareholders that financial statements prepared by management are

free from material misstatements (Watts and Zimmerman, 1986).

The usefulness of accounting information to diverse financial

statement users depends on the completeness, accuracy, reliability,

and timeliness of this information. Hence, timely reporting might be

viewed as one of the main determinants of financial reporting quality

that enhances the decision-making quality (Hasan, 2006).

2. Auditing

Auditing is an examination of a company’s financial

statement by a firm of independent public accountants. The audit

consists of a searching investigation of the accounting records and

other evidence supporting those financial statements. Through the

study and evaluation of the internal control company’s system, and

by the documents, asset observation, the making of inquiries within

and outside the company, and by other auditing procedures. The

15

auditor will gather the evidence necessary to determine whether the

financial statement provides a fair and reasonably complete picture

of the company’s financial position and its activities during the

period being audited (Meigs et al, 1982). Boyton and Johnson (2006)

provide a definition of auditing as a systematic process to obtain and

evaluate evidence objectively about assertions and economic event,

in order to determine the degree of correspondence between

assertions with predetermined criteria and delivery of the result to

the parties. There are several attributes of auditing:

(i) A systematic process connotes a logical, structured, and organized

series of steps or procedures,

(ii) Objectively obtaining and evaluating evidence means examining

the bases for the assertions and judiciously evaluating the results

without bias or prejudice either for or against the individual (or

entity) making the assertions.

(iii) Assertions about economic actions and events are the

representations made by the entity or individual. They comprise the

subject matter of auditing. Assertions include information contained

in financial statements, internal operating report, and tax returns.

(iv) Degree of correspondence refers to the closeness with which the

assertions can be identified with establish criteria. The expression of

correspondence may be quantified, such as the amount of a shortage

16

in petty cash fund, or it may be qualitative, such as the fairness of

financial statements.

(v) Established criteria are the standard against which the assertions

or representations are judged. Criteria may be specified rules

prescribed by a legislative body, budgets and other measures of

performance set by management. Or generally accepted accounting

principles (GAAP) established by the Financial Accounting

Standards Board (PASB) and other authoritative bodies.

(vi) Communicating the result is achieved through a written report

that indicates the degree of correspondence between the assertions

and established criteria.

(vii) Interested users are individuals who use (rely on) the auditor’s

findings. In a business environment, they include stockholder,

management, creditors, governmental agencies, and the public.

a. Auditing Standards

Standards are authoritative rules for measuring the

quality of performance. The existence of generally accepted

auditing standards is evidence that auditors are much concern

Auditing standard determine the quality of performance and

the whole purpose is to be achieved in an audit of financial

statements (Boyton and Johnson, 2006).

17

1. General standard

a. The examination is to be performed by a

person or persons having adequate technical

training and proficiency as an auditor

b. In all matters relating to the assignment,

independence in mental attitude is to be

maintained by the auditor or auditors.

c. Due professional care is to be exercised I the

performance of the must be maintained by the

auditor.

2. Standard of Field Work

a. Works must be planned well and assistants

should be properly supervised.

b. Sufficient understanding on internal control

should be obtained to plan the audit and

determine the nature, timing, and extent of

testing.

c. Sufficient competent audit evidence should

be obtain through audit procedures.

3. Standard of Reporting Work

a. The audit report must state whether the

financial statements are prepared in

18

accordance with generally accepted

accounting principles in Indonesia.

b. The audit report should indicate or declare, if

there are inconsistencies in the application of

accounting principles in the preparation of the

financial statements of the current period

compared with the application of the

accounting principles in the previous period.

c. Informative disclosure in the financial

statements should be considered sufficient,

unless otherwise stated in the audit report.

d. The audit report must include a statement of

opinion on the financial statements as a

whole, or an assertion that such a statement

cannot be given if the overall opinion cannot

be given. The reason must be stated.

The 10 standards set forth by the American Institute of

Certified Public Accountants includes such intangible and

subjective terms of measurement as adequate planning, proper

evaluation of internal control, sufficient competent evidential

matter, and adequate disclosure (Meigs et al, 1982).

19

3. Audit Quality

DeAngelo (1981) defined quality audit as the probability that

an auditor discovered and reported about the existence of a breach

in the accounting system of its clients. Qualified auditors should

provide proper information, not only wore a higher fee so the choice

was reflected the information contained in the company. Malihi et

al. (2012) provided the further explanation that audit quality could

be a function of the auditor’s ability to detect material misstatements

and reporting the errors. Together with other similar definitions, they

all emphasize on two of the most important aspects of audit quality,

namely auditor ability or auditor effort, and auditor independence.

Therefore, this stream of definitions is mainly about the auditors’

quality. Another stream of defining audit quality focuses on the

accuracy of the information reported by the auditors.

Audit quality is measured by two formative indicators,

namely: (a) auditor's reputation showed that reputation is public

perceptions about auditor past performance regarding to audit

quality and standards of professional conduct that are consistent in

auditing process and (b) industry specialist auditors stated that

auditors are that often assigned to specific industries become very

adept to identify and address the problems of specific industry audit,

resulting in a high-quality audit (Halim et al, 2014). The audit

process is considered a key important element in the structure of

20

financial statements because it tests whether the financial

information is in an independent and objective form, in order to

increase the credibility of this information. The most important

factor of audit quality is the ability of an auditor to detect errors and

other significant misstatements and reducing the level of accounting

information inconsistency between shareholders and management

(Almomani, 2015). On the other hand, the term auditing quality has

different meanings depending on the viewpoint of the recipient or

the provider of the audit service. Users of financial statements state

that good quality auditing occurs when the auditor can give

assurances that there are no material misstatements in the financial

statement. While the auditors’ views are that high-quality auditing

occurs when the auditors work in accordance with the existing

professional standards, are able to assess the audited businesses’

risks with the aim of minimizing the risk of litigation, and to avoid

to the ruin of the auditors’ reputations. Therefore, auditing quality is

an important thing for an auditor during the auditing process (c).

To be able to perform their obligations, there are three

components that must be possessed by auditors, namely

competence, independence and due professional care. In carrying

out their functions, an auditor often experiences conflicts of interest

with the company management. The management might want the

company's operating results, or its performance, to appear to be more

21

successful by depicting using better data, with the intention of

getting an award (e.g. bonus). To achieve these objectives, the

company’s management often compels the auditor to produce

audited financial statements in accordance with their wishes. An

auditor has a strategic position for both the management and the

financial statement’s users. Besides, the users of financial statements

put a lot of faith in the work of auditors. This faith in the audited

financial statements, by their users and in the service that is provided

by the auditors, requires that the auditors pay attention to the quality

of the auditing they conduct (Junaidi, et al, 2016).

According to Deis and Giroux (1992) conducted a study of

four aspects that are considered to have a relationship with an audit’s

quality, namely: (1) Tenure, implying that the longer an auditor

works for the same client, the lower the quality of his/her audits

become, (2) number of clients, hinting at the idea that the greater the

number of clients an auditor has, the better the auditing quality will

be, since an auditor with a large number of clients will try to

maintain his/her good reputation, (3) the financial health of the

client, meaning that the healthier the financial condition of the client

is, the bigger the tendency will be to press the auditor to not follow

the standard procedures and (4) a review by a third party, implying

that the quality of the audit will increase if the auditor knows that

his/her service is going to be reviewed by someone else.

22

Moreover, there are a lot of proxies’ uses to measure the

audit quality. Which is Ahmed (2012) in Almomani (2015) used

audit fees, audit office size, client's retention period, association with

international audit fees and professional qualification of audit office

employees, as features of audit quality. The features of audit quality

that used by Hamdan (2012) in Nawaiseh (2016) include audit office

size, audit fees, client's retention period, audit office specialization

with the industry of the client, and the association between audit

office and the international offices of auditing.

4. Audit Opinion

According to Rena (2016), the opinion of the independent

audit has significant importance in decreasing the information risk

and increasing the reliability of the information submitted in the

financial tables that form the basis of the decisions reached by

financial information users. The end product of an audit of a

business enterprise is a report expressing the auditor’s opinion on

the client’s financial statements. The standard of auditor’s report

consists of only two short paragraphs. The first paragraph is a

concise statement of the scope of the examination and the second

paragraph is an equally concise statement of the auditor’s opinion

base on the examination (Meige, 1982). Auditor’s opinion is very

important for the company or other parties because the auditor’

23

report can add the credibility of the financial statement, thereby

increasing the confidence of investor to invest.

The audit opinion published by the auditor is divided into

five main types, namely:

1. unqualified opinion report

Unqualified opinions are given by the auditor

if the financial statement that presents fairly, in the

financial statement, results of operations, and cash

flow.

2. unqualified opinion reports with explanatory

language

The condition that auditor should add an

explanatory paragraph in the audit report because

there is a certain condition that requires an

explanatory language, but the financial statement still

present fairly.

3. qualified opinion reports

This opinion will be given by the auditor if

the auditor finds:

a. There is insufficient evidence or limitations

to the scope of the material audit.

24

b. There is the aberration in the financial

statements of the applicable accounting

principles that affect the material.

4. adverse opinion reports

The financial statements do not present fairly

of the results of operations and cash flows in

accordance with accounting principles. The auditor

should explain the supporting explanation, the

unreasonable opinion, and the main impact of the

thing that causes the opinion to be given to the

financial statements.

5. disclaimer of opinion reports

This statement is given by the auditor if there

is a limitation of the scope of the audit in material,

either by the client or due to certain conditions. Thus,

it makes the auditor not independent of the client.

5. Size of Public Accountant Firm

The classified of auditor into two different groups, namely

auditors who are affiliated with the big four firms and auditors who

are not affiliated with the big four. When an auditor claims to be an

auditor of good standing, because he/she has connections to the big

four, he/she will strive to maintain his/her good name and avoid

actions that lower his/her standing (Fanny & Saputra, 2005 in Juandi

25

et al, 2016). Big Four auditors affiliated with local firms in Indonesia

include:

1. Auditing Firm of Purwantono, Sarwoko, and

Sandjaja affiliated with Ernest and Young (EY).

2. Auditing Firm of Osman Bing Satrio and Partners

affiliated with Deloitte Touche Tohmatsu (Deloitte).

3. Auditing Firm of Siddharta and Widjaja affiliated

with Klynveld Peat Marwick Goerdeler (KPMG).

4. Auditing Firm of Haryanto Sahari and Partners

affiliated with Pricewaterhouse Coopers (PwC).

According to the rules of the Indonesian Institute of Certified

Public Accountants, foreign auditors are allowed to perform service

activities in Indonesia by affiliating with local auditors. For that, the

measurement of the auditor’s reputation is separated into two,

namely auditors affiliated with the big four and those not affiliated

with the big four. Auditors are responsible for providing high-

quality information that is useful for making decisions.

According to Fanny and Saputra (2005) in Juandi et al, 2016

state that the client usually perceives that accountants coming from

the large firms of auditors, who have affiliations with international

auditors, are of a higher quality because the auditors have

characteristics that can be associated with quality, such as training,

international recognition, and experience, as well as their peer’s

26

respect. Auditors who have a good reputation and name can provide

a better quality of audit, in order to maintain their reputation.

6. Audit Report Lag

The auditor report is an independent examination and

expression of opinion on the financial statements of company's

annual reports. The objective of an audit is to independently verify

the contents and the preparation of the company's financial

statements according to the standards, regulations, and

requirements. The timeliness of audited company annual reports is

regarded as to a significant aspect influencing the usefulness of

information available to external users for decision-making process

(Al-Ajmi, 2008)

According to Hossain and Taylor (1998), the delay in the

publication of the company’s financial statement because the

financial statement must be audited prior to publication. The

independent auditor requires a certain amount of time to complete

the audit work resulting in an audit report lag. Audit report lag is

therefore defined as the number of days from the accounting year

end of a company and the audit report date. As important

information conciliator, the audit report is all the time a focus of

audit firms, companies, regulators and investors and its report lag

directly determines the usefulness of decision making. The

inordinate audit, the quality of financial reporting by not providing

27

timely information to investors and prospective investors (Dibia,

2013).

the ARL is important because: (i) the ARL affects the

timeliness of both audit and earnings information and (ii) a better

understanding of what factors drive the ARL is likely to provide

more insights into audit efficiency. As the audit report contains the

auditor’s opinion regarding the credibility of the financial

statements, investors prefer to see the audit report released within a

short period following the end of the fiscal year. Based on previous

research by Dyer and McHugh (1975), the type of reporting lags can

be classified as three: (i) Audit Lag- interval days between the

balance sheet closing date and the signed date of auditor’s report

stated in the corporate annual, (ii) Preliminary lag- interval between

the balance sheet closing date and the date companies are required

to submit their audited financial report to Stock Exchange, (iii) Total

lag- interval of days between the balance sheet closing date and the

date audited financial report distributed to shareholders in General

meeting to shareholder.

B. Previous Research

Below are the results from several researches from several

researchers which became the references of this study. The results can be

seen in Table.2.1 below

28

Table 2.1

Previous Research

No Title

(Researcher,

year)

Research Methodology Research

Results Differentiation Similarities

1 Audit Quality

and Audit Report

Lag: Case of

Listed

Companies

(Rusmin and

Evans, 2017)

Proxy on audit

quality. The

addition of two

independent

variables, namely:

audit opinion and

size of public

accountant firm

The object of

research and

variable of audit

report lag

The negative

significant

between audit

industry

specialization and

audit report

timeliness as a

proxy of audit

quality. Then, Big-

4 auditors perform

significantly faster

than nonBig-4

2 The Influence of

Internal and

External on

Audit Report Lag

Empirical Study

on

Manufacturing

and Banking

Listed in IDX

period 2008-

2013

(Imam Fadoli,

2015)

Independent

variables: audit

quality and size

Variable of audit

opinion. Using

purposive

Solvency

influences audit

report lag, while

profitability,

liquidity, firm size,

firm age,

classification of

industry company,

and audit opinion

do not influence

audit report lag

3 The Effect of

Subsidiaries,

Audit

Complexity, and

Audit Opinion on

Audit Report Lag

(Lindasari, Retno

Yuni NS, and

Grace Andani,

2015)

Independent

variables: audit

quality and size of

public accountant

firm. Object of

research

Variable of audit

opinion. Using

purposive

sampling and

regression model

The Subsidiaries,

Audit Complexity,

and Audit

Opinion’s variable

have influence on

audit report lag

4 The Influence

Factors toward

Audit Reposr

Lag on

Manufacturing

Company Listed

Variables of audit

quality and size of

public accountant

firm. The object of

research

Variable of audit

report lag.

Regression model

The company,

leverage, and

auditor industry

specialization

effect on audit

report lag

Continues to the next page

29

No Title

(Researcher,

year)

Research Methodology Research

Results Differentiation Similarities

In IDX 2008-2012

(Alvyra Nesia

Indah Putri, Indira

Januarti, 2014)

5 Characteristics of

the Audit

Committee and

Audit Report Lag

(Nigar Sultana, et

al, 2014)

Variables of audit

quality and size of

public accountant

firm.

Variable of audit

report lag

Audit committee

with financial

expertise

associated with

shorter audit report

lag

6 The Influence

Factors toward

Audit Report Lag in

IDX

(Ivena Tiono and

Julius Jogi, 2013)

Variables of audit

quality and size of

accountant firm.

Variable of audit

opinion. Using

purposive

sampling

Profitability, audit

opinion, type of

firm, size of public

accountant firm,

and audit

reputation effect

on audit report lag.

7 Audit Tenure,

Auditor

Specialization, and

Audit Report Lag

(Mai Dao and

Trung Pham, 2011)

Variables of audit

quality and size of

accountant firm.

Variable of audit

report lag. Using

regression

model.

The auditor

industry

specialization

(regardless of city-

level, national-

level and joint

city- and national-

level industry

specialization)

weakens the

positive

association

between ARL

audit firm tenure.

8 Audit Firm Industry

specialization and

Audit Report Lag

(Ahsan Habib and

Md. Borhan Uddin

Bhuiyan, 2011)

Variables of audit

quality and audit

opinion. The

object of research

Variable of audit

report lag. Using

regression

model.

The company that

audited by auditor

specialization has

shorter lag.

9 Corporate

Governance and

Audit Report

Timeliness:

Evidence from

Malaysia

Variables of audit

quality and size of

public accountant

firm. The object

of research

Variable of audit

report lag. Using

regression

model.

Audit Report

Timeliness is

influenced by audit

committee size,

type of auditor,

opinion audit

opinion, and

profitability.

Continues to the next page

30

No Title

(Researcher,

year)

Research Methodology Research

Results

(Sherliza Puat

Nelson dan Siti

Norwahida Shukeri,

2011)

However, no

association was

found between

board

independence,

audit committee

meetings, audit

committee

members’

qualifications and

audit timeliness

10 The Influence

Factors toward

Audit Report Lag in

IDX

(Meylisa Iskandar

and Estralita

Trisnawati Januar,

2010)

Variable of audit

quality. The

object of research

Variable of audit

opinion and size

of public

accountant firm.

Using purposive

sampling.

Industry

classification,

current year

income (loss), and

size of KAP have

an effect on audit

report lag. But

total assets, audit

opinion, and debt

proportional have

no effect.

C. Conceptual Framework

1. Variable Interrelation

a. Audit Quality and Audit Report Lag

According to DeAngelo (1981), Auditing quality

was defined as the possibility that the auditor will detect

and report material misstatements. The term ‘auditing

quality’ has different meanings depending on the

viewpoint of the recipient or the provider of the audit

service. Users of financial statements state that good

quality auditing occurs when the auditor can give

assurances that there are no material misstatements in the

31

financial statement. While the auditors’ views are that

high-quality auditing occurs when the auditors work in

accordance with the existing professional standards, are

able to assess the audited businesses’ risks with the aim

of minimizing the risk of litigation, and to avoid to the

ruin of the auditors’ reputations. Therefore, auditing

quality is an important thing for an auditor during the

auditing process (Junaidi et al, 2016).

Based on Hay and Davis (2002) audit fee is one

of the factors that influence audit quality besides

reputation of public accountant firm and professionalism

of public accountant firm. Kurniasih and Rohman (2014)

explained that higher costs will improve audit quality,

due to the audit fees gained within a year and the

estimated operational costs required to carry out the

audit process can improve the audit quality. Arisinta

(2013), the audit fee influenced on audit quality because

the high audit fee will produce the high of the audit fee.

Based on the previous research, the researcher uses audit

fee as a proxy of audit quality to determine the influence

of audit quality on audit report lag. Rusmin (2017) have

determined the audit quality and audit report lag. Thus,

the hypothesis is:

32

H1 = audit quality influences audit report lag

b. Audit Opinion and Audit Report Lag

Audit opinion was given the opinion from the auditor

to the company as a result of assessment financial statement.

The auditor’s opinion is the importance of the company or

other parties who need the result of audited financial

statement because it gives the credibility of the financial

statement.

According to Nelson and Shukeri (2011) indicated

that the audit report lag was influenced by the type of auditor,

audit opinion, and profitability. Then, Arifa (2013), and

Lindasari et al (2015), and Hapsari et al (2016) explained that

auditor opinion influences audit report lag. If the company

get unqualified opinion will give the good news for the

company. Thus, the company can publish the financial

statement before the due date.

Based on the explanation above, the auditor opinion

influences audit report lag. If the company receives an

unqualified opinion would be more trustworthy due to the

credibility of the financial statement. Thus, the hypothesis is

as follow:

H2 = audit opinion influences audit report lag

33

c. Size of Public Accountant Firm and Audit Report Lag

According to Afify (2009) and Cohen & Leventis

(2013) postulate that Big 4 accounting firms tend to have a

stronger incentive to finish their audit work more quickly in

order to maintain their reputation or brand name. Likewise,

international affiliated audit firms have more incentives to be

more aggressive by providing a faster service in order to

increase their audit market share (Leventis et al., 2005). In

addition, it is argued that Big 4 audit firms have more

resources (Palmrose, 1986), higher quality and better-trained

staffs (Chan et al., 1993) and advanced audit technology

(William and Dirsmith, 1988) and are able to conduct audit

more efficiently and timely (Gilling, 1977; Hassan, 2016).

The Big 4 audit firms may provide higher audit

quality than those non-Big 4 (DeAngelo, 1981; Watts and

Zimmerman, 1986; Becker et al., 1998; Caneghem, 2004) as

they have strong incentives to provide or maintain a high

audit quality level due to the fact that they have: (1) more

qualified staff, (2) a greater number of clients, (3) more

opportunity to deploy significant resources to auditing

(recruitment, training and technology), and (4) more at risk,

for example, termination of clients and loss of reputation

(Chan et al., 1993 and Chung et al., 2005). Leventis et al.

34

(2005) find that as a result of the use of better qualified and

trained staff together with the use of superior audit

technology, Big 4 accounting firms take less time to conduct

audit engagements. (Rusmin, 2017).

According to Rachmawati (2008) explained the size

of public accountant firm significantly influence audit report

lag, it is also supported by Iskandar and Trisnawati (2010)

explained size of public accountant firm influence audit

report lag. Then the hypothesis is as follow:

H3 = size of public accountant firm influences audit

report lag

d. Audit Quality, Audit Opinion, and Size of Public

Accountant Firm and Audit Report Lag

Some research that has been done by many

researchers proved that the audit quality, audit opinion, and

size of public accountant firm influence audit report lag. And

that is also many researchs that done (many of) which. Then

in the opinion of the researcher that maybe there is some

measurement that will be done in this research that can be

proved that audit quality, audit opinion, and size of public

accountant have simultaneous significant on audit report lag.

According to Nelson and Shukei (2011) indicated

that the audit report lag was influenced by the type of auditor,

35

audit opinion, and profitability. Then, Arifa (2013),

Lindasari et al (2015) and Hapsari (2016) explained that

auditor opinion influences audit report lag.

According to Herawaty (2011), services provided by

public accountants consist of assurance services and non-

assurance services. For public accountants, the fee is a source

of income for them. The fee is the cost charged for a given

service, professional payments applied to accounting, taxes

and official employment based on a time / hour. The issue of

the fee is a dilemma problem because the auditor gets a fee

from the company (client) that is audited where in one side

of the auditor should independently furnish his opinion but

on the other hand the auditor also earns rewards from the

client for the work he does.

Then, Chan et al., (1993); Chung et al., (2005);

Leventis et al. (2005) find that as a result of the use of better

qualified and trained staff together with the use of superior

audit technology, Big 4 accounting firms take less time to

conduct audit engagements. Based on Rachmawati (2008)

explained the size of public accountant firm significantly

influence audit report lag, It is also supported by Iskandar

and Trisnawati (2010) explained size of public accountant

36

firm influence audit report lag. Therefore, the hypothesis is

as follows:

H4 = audit quality, audit opinion, and size of public

accountant firm simultaneously influence on audit report lag.

2. Research Model

Figure 2.1

Research Model

Several Factors which influence the delay

Analysis Method: Regression

Multiple Regression

Many Companies get suspension because of

late to submit audited financial statement

Independent Variable

Dependent Variable

Audit Quality (X1)

Audit Opinion (X2)

Audit Report Lag

(Y)

Size of Public Accountant

Firm (X3)

Supporting Theory: Agency Theory

37

Analysis

Conclusion

Multiple Regression

38

CHAPTER III

RESEARCH METHODOLOGY

A. Scope of Research

The purposes of this research to analyze the causality relation

between independent variable, audit quality, audit opinion, and size of

public accountant firm toward dependent variable, audit report lag. The

population of this research is Manufacturing Company listed in Indonesia

Stock Exchange (IDX) 2014-2016.

B. Sampling Method

The method that used in the selection of research sample is the

selection of the sample aiming (purposive sampling), using Slovin

Formulation (Sugiyono, 2013 in Pradana, 2016). The samples of this

research are the audited financial report of the manufacturing company

listed in Indonesia Stock Exchange (IDX) in period of time 2014-2016. The

criteria of samples for this research are as follows:

1. The manufacturing company is listed on the Indonesia Stock

Exchange.

2. The sample is selected by Slovin’s Formulation

n = 𝑁

1+ 𝑁𝑒2

Explanation:

n = Size of sample

N = Size of population

39

e = leniency due to error (10%)

3. The sample is the company that report financial statements

and annual reports on the time period 2014, 2015, and 2016.

4. The sample fulfill all the criteria

5. The financial statements used are financial statements

audited by independent auditor.

6. The financial statements used are expressed in Rupiahs.

7. The completeness of data needed in a row of 2014-2016.

C. Collection Data Method

In obtaining the data in this study, the researcher used two ways,

library research and documentations research (Kothari, 2004).

1. Library Research

Library Research is conducted by processing the data

that available from previous research, journals, case studies,

library record, online data, company website, and other written

media related to the topic of discussion of this study. The data

obtained in this study are gathered from annual report of

manufacturing company issued in the period of 2014-2016.

2. Documentation Research

The method of data collection by collecting secondary

data used is called Documentation Research. The main data of

this research is secondary data. The data is obtained from the

Indonesia Stock Exchange. This research, which becomes the

subject of research, is the annual report and audited financial

40

statement. This data is obtained by downloading financial

statement on the website www.idx.co.id.

D. Data Analysis Method

The analytical tool used in this research is multiple linear regressions

using SPSS, where the regression equation contains elements of interaction

(Multiplication of two or more independent variables). The variables are

tested by using Descriptive Analysis, Classical Assumption Test, and

Hypothesis Test. To process the data, the researcher uses Statistical Package

the Social Sciences (SPSS) 22.

1. Descriptive Statistic

The descriptive statistic is the statistic used for analyzing

sample data in the way to describe or depict the data already

collected. The descriptive statistic obtains a picture or describes data

from the calculation of sum, minimum, maximum, mean, and

standard deviation (Priyatno, 2017). Descriptive statistic is based on

data that has been collected and then analyzed. This analysis is used

to provide a description of the research variables (audit quality, audit

opinion, and size of public accountant firm, and audit report lag)

which can be seen from the amount of data, maximum, minimum,

average number, range, and standard deviation.

2. Classic Assumption Test

The Classical assumption test aims to determine the

relationship between the variables in the data. Before conducting

41

regression analysis. The classical assumption needs to determine

whether there is a relationship between the variables. There are four

kinds of classical assumption test; normality, multicollinearity,

heteroscedasticity, and autocorrelation test.

a. Normality Test

The test will be conducted to audit quality, audit

opinion, size of public accountant firm, and audit report lag.

According to Priyatno (2017) normality is the essensial

requirement to fulfiil in the parametric analysis. The purpose

of the normality test is to determine whether the regression

model variables are normally distributed or not. The

normality test conducted to determine whether the inferential

statistics to be used is a parametric or nonparametric statistic.

There is two ways to test, the graph analysis and statistical

test.

1. Graph Analysis

If using the graph analysis, the normality test

can be done by looking the spread of the data (dots)

on the diagonal axis of the graph or by looking at the

histogram from the residual.

a. If the dots spread around the diagonal line and

follow the direction of the diagonal line, the

assumption for the regression model is normal

42

b. If the dots spread away from the diagonal line or

do not follow the direction of the diagonal line, the

assumption for the regression model is not normal.

2. Statistical Test

K-S test done by looking the probability

number under the condition:

1) The distribution is not normal if the

Significant value or probability value is <

0.05.

2) The distribution is normal if the Significant

value or probability value is > 0.05.

b. Multicollinearity Test

The multicollinearity test aims to test whether the

regression model found a linear relation between

independent variables. Good regression model should not

occur correlation between independent variable (Priyatno,

2017)

To test the multicollinearity, can be done by using

Variance Inflation Factor (VIF) test. The Basic for the

decision-making as follow:

1) If VIF (variance inflation factor) is > 10 or

Tolerance < 0.1, there is multicollinearity

43

2) If VIF (variance inflation factor) is < 10 or

Tolerance > 0.1, there is no multicollinearity.

c. Heteroscedasticity Test

The purpose of heteroscedasticity test is to test the

variance disparity from residual observation to another

observation in a regression model. A good regression model

shows there is no heteroscedasticity. Heteroscedasticity test

can be viewed by using the chart Scatterplot between the

predicted value of the dependent variable (ZPRED) and

residual (SRESID). Y-axis becomes the axis that has been

predicated and the X-axis is the residual (Y predicted – Y

actually) that has been in the student zed. Basic for the

decision-making as follow:

1) There is heteroscedasticity if there is a

certain pattern that dots are forming a regular

pattern.

2) There is no heteroscedasticity if there is no

clear pattern that dots spread above and

below zero (0) on the Y-axis.

d. Autocorrelation Test

Autocorrelation test aims to determine whether there

is a correlation between samples members were sorted by

time. A good regression model is the regression that does not

44

have autocorrelation (Priyatno, 2017). The autocorrelation

test is done by using Run Test. The decision-making as

follow:

1) If the value of Asymp. Sig (2-tailed) less than

(<) 0.05. There is autocorrelation.

2) If the value of Asymp. Sig (2-tailed) less than

(>) 0.05. There is no autocorrelation.

3. Coefficient of Determination Test

To test to measure how far the ability of independent

variables (AUQ, OPINI, and SIZE) can contributes toward

dependent variable (ARL). The greater adjusted R² of

independent variable, so the more dominant influence of

independent variable on dependent variable.

The adjusted R² value is between zero and up to one. The R²

value which is close to one means the ability of independent

variables give almost all the information needed to predict the

dependent variable. Then, the value of adjusted R² means

showing the contribution of independent variables’s influence

toward dependent variable.

4. Hypothesis Test

In accordance with the data, the appropriate approach in this

study is a quantitative approach, the approach that emphasizes the

figures in the research. From the data that has been obtained, the

45

number is expected to provide the appropriate conclusions. This

study used samples which are the manufacturing company listed in

Indonesia Stock Exchange that report the audited financial statement

and annual report and published it at Indonesia Stock Exchange In

the period of time 2014-2016.

If a dependent variable depends on more than one

independent variable, the relation between both variable is called

multiple regression analysis. The test results will provide result from

rejection or acceptance of research hypothesis.

Multiple regression method is the analysis method used in

this research. The researcher uses multiple linear regression method

because there are three independent variables and one dependent

variable which means the researcher wants to show that three

variables are through to be systematically by a linear relationship.

According to Kothari (2004) thera are two or more independent

variables, the analysis concerning relationship iss known as multiple

correlation and the equation describing such relationship as the

multiple regerssion. This research uses three independent variables

and one dependent variable. The independent variables are audit

quality, audit opinion, and size of public accountant public while the

dependent variable is audit report lag. The regression is one of

simplest tools and multiple regression is a model with more than one

independent variables. Priyatno (2017) explains about the equation

46

for expressing the functional relationship by a linear equation. The

equation is as follow:

ARL = α + β1AUQ + β2OPINI + β3SIZE + e

Where:

ARL = Audit Report Lag

α = Constant

β1, β2, β3 = each variable coefficient

AUQ = Audit quality

OPINI = Audit Opinion

SIZE = Size of Public Accountant Firm

e = error

a. Simultaneous Significant Test (F-test)

The test used to find out the impact of all

independents variables (AUQ, OPINI, and SIZE) toward

dependent variable (ARL). The level significant is 5 %, the

decision-making:

1. If the significant F is more than 0.05 means the all

variables do not have simultaneously influence.

2. If the significant F is less than 0.05 means the all

variables have simultaneously influence.

47

b. Partial Regression Test (T-test)

The test is to examine the individual influence of

independent variables (AUQ, OPINI, and SIZE) toward

dependent variable (ARL). The level of significant is 5 %,

the decision-making:

1. If the significant T is more than 0.05 means the

independent variable do not influence the dependent

variable.

2. If the significant T is less than 0.05 means the

independent influences the dependent variable.

E. Research Variables Operationalization

In this section will describe the definition of each variable used

along with operations and measures.

1. Audit Report Lag (Dependent Variable)

Using the number of day from the financial year-end

to the time when auditor sign the report of firm (Rusmin,

2017)

2. Audit Quality (Independent Variable)

This variable uses audit fee as the proxy. Audit fee is

the fee received by the auditor of payment by management

(Hartadi, 2012). This research refers to research conducted

by Kurniasih (2013) that data on audit fees proxied by

48

professional fees account contained in the financial

statements at companies listed on the Indonesia Stock

Exchange. This variable is measured using natural logarithm

from the data on the professional fees account.

3. Audit Opinion (Independent Variable)

This variable is measured by dummy variable. The

company which gets unqualified opinion from the auditor

will be given 1. If the opinion is not unqualified will be given

0

4. Size of Public Accountant Firm (Independent Variable)

This variable is measured by dummy variable. The

company that use public accountant from Big-4 will be given

1. If the company that do not use public accountant from Big-

4 will be give 0. Below is the variable operationalization of

this study:

49

Table 3.1

Variable Operationalization

No Variable Type of

Variable

Indicator Measurem

ent Scale

1 Audit Report Lag

(Y)

(Rusmin, 2017)

Dependent The number of day

from the financial

year-end to the time

when auditor sign the

report of firm

Ratio

2 Audit Quality

using audit fee

(X1)

(Kurniasih and

Rohman, 2013),

(Hartadi, 2009)

Independent LN Professional Fee Ratio

3

Audit Opinion

(X2)

(Iskandar, 2010)

Independent Using variable dummy.

The indicator variable

score one (1) if the

auditor opinion is

unqualified; otherwise

score zero (0)

Nominal

4 Size of Public

Accountant Firm

(X3)

(Suginam, 2016)

Independent Using variable dummy.

The indicator variable

score one (1) if the public

accountant firm is form

Big-4; otherwise score

zero (0)

Nominal

50

CHAPTER IV

FINDING AND ANALYSIS

A. General Description of Research Object

1. Research Object Description

The population of this research is manufacturing company

listed in Indonesia Stock Exchange (IDX) 2014-2016.

Manufacturing industry is chosen because in Indonesia,

manufacturing sector is very developing either in construction,

transportations, etc.

Table 4.1

Detail of Research Sample

Manufacturing Companies 144

Manufacturing Companies is selected by Slovin Formulation 60

The amount of companies which is being sample (fulfill the

criteria)

30

The study period (2014-2016) 3

Total company during the study period 90

Sample which identify as outlier (7)

Total sample of observation 83

Source: Processed Data

The table above is present the amount of research sample

which appropriate with predefined criteria. The number of service

companies that being sampled in this research are 30 companies. The

company being sample in this research has been met with predefined

criteria before in previous chapter of this research. The length of the

study period is 3 years, i.e. from 2014-2016. Thus, the total of

sample in this research is 90 sample observations. The focus of this

51

research is to see the influence of audit quality, audit opinion, and

size of public accountant firm on audit report lag on manufacturing

industry. But, the sample used is 83 data and 7 and indicates as

outliers.

B. Analysis and Discussion

1. Descriptive Statistics Analysis

The independent variables used in this study are audit

quality, audit opinion, and size of public accountant firm, while the

dependent variable is the audit report lag. The descriptive statistics

defines the minimum, maximum, mean, and standard deviation for

each variable. It is showed in the table 4.2

Table 4.2

Descriptive Statistic Analysis 2014-2016

Sources Data Process

Based on the Table 4.2, it appears that the manufacturing

companies in Indonesia have relatively long-term process of audit

settlement, which spends approximately 67 to 99 days. According to

N Minimum Maximum Mean Std.

Deviation

Audit Report

Lag

Audit Quality

Opinion

Size

Valid N

(listwise)

83

83

83

83

83

67

17

0

0

99

27.3

1

1

80.96

20.92

.73

.43

6.344

2.141

.444

.499

52

Bapepam-LK, the audit of Financial Statement for one-year

financial period -from January to December- must be published no

later than three months – or 90 days- from the latest month of the

financial period. Although some companies exceed this deadline, the

majority of companies studied in this research have complied with

Bapepam regulation. It is shown that the average of companies’

report lag is around 81 days, less than the maximum days -90 days-

enforced by Bapepam. Meanwhile, the average of Audit Quality

reached 20.92; Audit Opinion is 0.73 or 73%; while, size of pulic

accountant firm is 0.43 or 43%.

2. Classic Assumption Test Result

a. Normality Test Result

The normality test is aimed to examine the regression model

of independent variables and dependent variable and to determine

whether the variables have normal distribution or no (Priyatno,

2013). In this regard, the data can be considered a good model of

regression if the data has normal distribution or close to normal.

This research applies the Normal Probability Plot (P-Plot) to

prove the normal distribution of data. It is showed in figure 4.1

53

Figure 4.1

Normal P-Plot

Source: SPSS Output

According to figure 4.1 the the dissemination of data re

around the diagonal line and follow the direction of a diagonal

spread which indicates that the regression model has the

assumption of normality for the distribution of data that tends to

approach the diagonal line.

On the other hand, the normality test also can be analyzed by

Kolmogorov-Smirnov test (KS). Kolmogorov-Smirnov is the

normality test that examines the alingment of data for each

variable in purpose to discover the normal distribution of data

sampling (Priyatno, 2017). Here is the formulation of the

hypothesis to test the normality by Kosmogorov-Smirnov:

54

1) If the Asymp. Sig > 0.05, the data is normal

distribution.

2) If the Asymp. Sig < 0,05, the data is not normal

distribution.

Table 4.3

Kolmogorov-Smirnov Test Result

Unstandardized

Residual

N 83

Normal Parametersa,b

Mean ,0000000

Std.

Deviation 5,85283180

Most Extreme

Differences

Absolute ,094

Positive ,052

Negative -,094

Test Statistic ,094

Asymp. Sig. (2-tailed) ,064c

Source: SPSS Output

Based on table 4.3, the result of Asymp. Sig (2-tailed) on

Kolmogorov-Smirnov test is 0,064 which is greater than 0.05.

Thus, the distribution of data in this research is normal.

b. Multicollinearity Test Results

The multicollinearity test is aimed to examine the correlation

between independent variables. Multicollinearity test is done by

55

using Tolerance value or Variance Inflation Factor (VIF). If the

value of Variance Inflation Factor (VIF) is less than 10 and value

of tolerance is more than 0.1, it can be said to be free of

multicollinearity, and the other way around. General Cut Off

value use to show the existence of multicollinearity is tolerance

value < 0.10 or equal to VIF value > 10. If tolerance value is under

0.10 or VIF value above 10 then there is a multicollinearity.

Multicollinearity test result is on the table below.

Table 4.4

Multicollinearity Test Result

Model Collinearity

Statistics

Tolerance VIF

1 (Constant)

Audit Quality

Opinion

Size

.689

.939

.663

1.451

1.066

1.507

Source: SPSS Output

Based on the Table 4.6 above, the result of tolerance value

for each variable, audit quality, audit opinion, and size of public

accountant firm’s variables were 0.689; 0.939; 0.663, while the

value generated for the variable VIF audit quality, audit opinion,

and size of the firm is 1.451; 1.066; and 1.507. All independent

variables have tolerance value more than 0.10 or tolerance value

> 0.10 and all independent variable have VIF value less than 10

or VIF < 10. Thus, it can be concluded that there is no symptom

multicollinearity.

56

c. Heteroscedasticity Test Result

The heteroscedasticity aims to examine whether in

regression model there is an inequality variance of the residual of

one observation to others. This test is conducted through

observing certain chart patterns of scatterplot, if there are points

that spread above and below 0 on the Y-axis and do not constitute

the pattern, this means that heteroscedasticity is not appear.

Scatterplot graphs is showed in figure 4.2

Figure 4.2

Scatterplot Graphic

Source: SPSS Output

From the scatterplot graph above, it can be seen that there

are the points spread randomly distributed either above or below

57

0 (zero) on Y axis and do not form certain pattern dominantly.

This result shows the regression model is not heteroscedasticity.

d. Autocorrelation Test Result

Autocorrelation test is used to determine and detect the

presence of autocorrelation. The autocorrelation test aims to test

whether in the linear regression model there is a correlation

between confounding error in period t and period t-1 (previous

year). A good model is a regression model that is free from

autocorrelation (Priyatno, 2017). Autocorrelation in this research

is using Run Test to see there is an autocorrelation between

residuals.

From the run test result below shows that Asymp. Sig. (2-

tailed) is 0,225 which is more than 0.05. Its means that regression

model in this research is free from autocorrelation problem or the

other words, there is no autocorrelation. (Janie, 2014).

Table 4.5

Run Test Result

Unstandardiz

ed Residual

Test Valuea ,79721

Cases < Test Value 41

Cases >= Test Value 42

Total Cases 83

Number of Runs 37

Z -1,214

Asymp. Sig. (2-tailed) ,225

Source: SPSS Output

58

3. Hypothesis Test Result

a. Coefficient of Determination Test Result

The coefficient of determination (R²) essentially measures

how far the model’s ability to explain the variation of dependent

variable. The value of coefficient of determination is between

zero and one. The R² value which is close to one means the

ability of independent variables give almost all the information

needed to predict the dependent variable. Then, the value of

adjusted R² means showing the contribution of independent

variables’s influence toward dependent variable.

Table 4.6

Coefficient of Determination Result

Source: SPSS Output

The table above is known Adjusted R square value is 0.116,

this means 11.6%. This indicates that the variable quality audit,

audit opinion, and size of the firm is 11.6%, while the remaining

0.884 or 88.4% (100%-11.6%) is explained by other factors that

are not included in this research model, such as profitability

(Fadoli, 2015) and (Nelson and Shukeri, 2011); investment

Model Summaryb

Model R R Square

Adjusted R

Square

Std. Error of

the Estimate

1 ,386a ,149 ,116 5,963

a. Predictors: (Constant), Size, Opinion, Audit Quality

b. Dependent Variable: Audit Report Lag

59

opportunities set (Dao and Brown, 2014); Characteristics of the

Audit Committee (Sultana, et al, 2014); Corporate Governance

(Nelson and Shukeri, 2011).

b. Simultaneous Significant Test (F-Test) Result

F test is used to determine the influence of independent

variables which are included in the regression model together on

the dependent variable that is tested at the 0.05 level. If the

probability of F value more than 0.05, the data is not

simultaneous, and the other way around.

Table 4.7

Simultaneous Significant Test Result

The result from Table 4.7 shows the results of F-test with a

significance level of 0.005. The significance level less than 0.05.

ANOVAa

Model

Sum of

Squares Df Mean Square F Sig.

1 Regression 491,062 3 163,687 4,604 ,005b

Residual 2808,962 79 35,556

Total 3300,024 82

a. Dependent Variable: Audit Report Lag

b. Predictors: (Constant), Size, Opinion, Audit Quality

Source: SPSS Output

60

Thus, it can be said that the audit quality, audit opinion, and size

of public accountant firm simultaneously influence the audit

report lag.

c. Partial Regression Test (T-test) Result

T-test uses to indicate the level of significance of each

independent variables on dependent variable tested at the 0.05

level. If the probability of T value is more than 0.05, the data is

not significant, and the other way around.

Table 4.8

Partial Regression Test Result

Source: SPSS Output

Coefficientsa

Model

Unstandardized Coefficients

Standardized

Coefficients

T Sig. B Std. Error Beta

1 (Constant) 64,396 /7,666 8,400 ,000

Audit

Quality ,959 ,370 ,324 2,588 ,011

Opinion -3,068 1,531 -,215 -2,004 ,048

Size -3,125 1,622 -,246 -1,927 ,058

a. Dependent Variable: Audit Report Lag

61

1) Influence of Audit Quality on Audit Report Lag

Source: SPSS Output

According to table 4.8, the first hypothesis test results

defines that audit quality variable is significant. The result of

significant number is 0.11 (p-value <0.05) and the regression

coefficients with the positive direction of 2.588. That means that

the first hypothesis is accepted so that it can be said that the audit

opinion in a positive significant influence on audit report lag. Due

to the audit quality variable has a significant level of less than

0.05.

This result is supported by Rusmin’s research (2107) which

significantly influences audit quality to the audit report lag.

However, the Rusmin’s research (2017) explain that audit quality

negatively influenced by the auditor industry specialization as a

proxy while in this research uses proxy audit fee. According to

research conducted by Kurniasih and Rohman (2014) the high

cost that company spends will improve the quality of audit

because the cost of an audit which earns in one year and estimates

operational cost needed for processing audit can improve the

Model

Unstandardized

Coeffients

Standardized

Coefficients T Sig

B Std.

Error

Beta

(Constant)

Audit Quality

64.396

.959

7.666

.370

.324

8.400

2.588

.000

.011

62

quality of the audit. Then, based on Hartadi (2009) and Tarigan

(2013), the higher of auditor's audit cost will influence the higher

of audit quality.

Based on the explanation above, it can be concluded that

increasing audit quality, it can influence the issuance of the audit

report of a company. If the company can be much faster to

publish an annual report that has done audited at a specific time

is not more than 90 days, the company can avoid penalties for

late and suspension of Bapepam-LK. It can be a good news for

the company because the company has a good reputation.

2) Influence of Audit Opinion on Audit Report Lag

Model

Unstandardized

Coefficients

Standardized

Coefficients T Sig

B Std.

Error

Beta

(Constant)

Opinion

64.396

-3.068

7.666

1.531

-.215

8.400

-2.004

.000

.048

Source: SPSS Output

Based on table 4.8, the second hypothesis test results the audit

opinion variable has a significance level of 0.048 (p-value <0.05)

and the regression coefficient of -2,004 negative directions. It

means that the second hypothesis is accepted, and it can be said

that the audit opinion has a negative significant influence on the

audit report lag with the variable level of significance audit

opinion is less than 0.05.

63

It supports with the results of research conducted by Shukeri

Nelson (2011), Arifa (2013), Lindrianasari et al (2015), and

Hapsari et al (2016) who found a significant influence between

audit opinion and audit report lag. It means that the company that

does not receive an unqualified opinion will occur a delay of audit

or audit report lag because company thinks that is bad opinion

and it can affect the company slowly to publish the financial

report. Moreover, the opinion indicates the conflict between the

auditor and the company. The provision of an unqualified opinion

in addition to potentially involving the negotiation process with

the client, consulting with senior audit partner or the technical

staff and the expansion of the scope of the audit will take some

more time (Kartika, 2011).

However, this result is not supported by the opinion of Fadoli

(2015), Rustiarini and Sugiarti (2013) and Tiono and Jogi (2013)

explained that the auditor opinion does not influence the audit

report lag because the opinion that given by auditors did not affect

the length of time to complete the audit. In addition, to determine

the reasonableness and issued an unqualified opinion, the auditor

would have to collect the complete evidence and its accuracy.

Thus, the process of auditing financial statement’s client would

need more time.

64

Based on the explanation above, it can be concluded that the

audit opinion significant influences to the audit report lag because

if the company received an unqualified opinion from the auditor

is a good signal from the company to the public, especially for the

investors. It can show that the company has been operating the

business activity well and disclose financial information is

credible and comprehensive. Thus, the company can be faster to

publish audited financial statements to the public. In contrary, if

the company does not receive unqualified opinions, it indicates

that the company operates limit the scope of the audit to the

auditor that the auditor was unable to obtain pieces of evidence

that are sufficient. Indications of getting beside unqualified

opinion, companies tend to negotiate with the auditors. Because

of that, to publish the audited financial statements need more

time.

Moreover, a good audit opinion should argue that audited

financial statements are in accordance with the provisions of

financial accounting standards and there is no material deviation

that may affect the decisionmaking. Audit opinion is also used as

a basis for consideration of decision making by the users of

financial statements both external parties and internal parties

(Arifuddin et al, 2017).

65

3) Influence of Size of Public Accountant Firm on Audit

Report Lag

Model

Unstandardized

Coefficients

Standardized

Coefficients T Sig

B Std.

Error

Beta

(Constant)

Size

64.396

-3.125

7.666

1.622

-.246

8.400

-1.927

.000

.058

Source: SPSS Output

According to table 4.8, the third hypothesis test results the

size of public accountant firm has a significance level of 0.058

(p-value <0.05) and the regression coefficient of -1.927 negative

direction. This means that the third hypothesis is rejected. Thus,

it can be said that the size of public accountant firm does not

influence the audit report lag due to the variable level of

significance size of public accountant firm is greater than 0.05.

This research is supported by the result of research

conducted by Suginam (2016) and Hossain and Taylor (1998)

explained the size of public accountant firm has no significant

effect on audit report lag because it was external factor that did

not affect the audit report lag and the high quality of audit firm is

shown by the high quality of service result, which in turn will

impact on audit completion period. Timeliness is one way that

audit firm to maintain its reputation. In contrary, this result is not

supported with the results of research by Iskandar and Trisnawati

66

(2010) and Subekti and Widiyanti (2004) explained the size of

public accountant firm influenced the audit report lag because the

auditor who has a good reputation will provide the quality of audit

work effectively and efficiently. The Big-4 firm obtains a higher

incentive to complete the audit work faster than another public

accountant firm. It is also supported by the quality and quantity

of human resources.

Based on the explanation above, it can be concluded the size

of public accountant firm do not influence the audit report lag

because not only Big 4 but also non-Big 4 (second tier) that can

provide the good performance. It is supported by Boone (2010)

found weak evidence that the Big 4 have a higher propensity to

issue going concern audit opinions for distressed companies.

However, the level of performance-adjusted abnormal accruals

for Big 4 and Second-tier audit firm clients appears to be similar.

Collectively, second-tier auditors can as an alternative to the Big

4. It means accountant firm which not include of Big-4 still shows

the good performance of the auditor. On the other hand, the

choice between Big 4 and second-tier auditors is not primarily a

quality based but by cost. From the perspective of public policy,

the ability to choose between Big 4 and Second-tier audit firms is

beneficial because it allows firms to enhance economic efficiency

(by matching marginal costs and benefits) while still obtaining

67

largely similar audit quality. Then, the competition between

public accountant firms are really massive. Thus, every public

accountant firm should keep its performance well to keep its

existence.

68

CHAPTER V

CONCLUSION, IMPLICATION, AND RECOMMENDATION

A. Conclusions

This research aims to know the influence of audit quality, audit opinion,

and size of public accountant firm on manufacturing company listed in

Indonesia Stock Exchange (IDX) period 2014-2016. Based on collected

data and tests that have been done to the problems by using multiple

regression. Thus, can be concluded as follows:

1. Audit quality influences audit report lag. This result is supported by

previous research by Rusmin (2017) that audit quality influences the

audit report lag. This research used audit fee as a proxy.

2. Audit opinion influences audit report lag. This result is supported by

Nelson and Shukeri (2011), Arifa (2013), and Lindrianasari et al

(2015) found that audit opinion influence audit report lag. In

contrary, this result is no correlation with the previous research by

Fadoli (2105), Rustiarini and Sugiarti (2013), and Tiono and Jodi

(2013) found that audit opinion does not influence audit report lag.

3. Size of public accountant firm does not influence. This result is

supported by Suginam (2016) explained the size of public

accountant firm does not influence audit report lag and Boone

(2010) found weak evidence that the Big 4 have a higher propensity

to issue going concern audit opinions for distressed companies. In

contrary, the result is no correlation with the results of research

69

Iskandar and Trisnawati (2010) and Subekti and Widiyanti (2004)

explained that the size of public accountant firm influences the audit

report lag.

4. Audit Quality, Audit Opinion, and Size of Public Accountant Firm

simultaneously influence on Audit Report Lag.

B. Implications

Therefore, these things need to be a concern for all parties, namely:

1. For the company, audit report lag is one of commitment for the

company to obey publishing its financial statement appropriate with

the time that arranges by BAPEPAM-LK and the audit opinion

influence the audit report lag for the company.

2. For auditors, they should improve their professional skill and

provide the quality of audit work effectively and efficiently. The

company will choose the accountant firm which provides the

capability to audit financial report faster. Thus, the company can

avoid the suspension from BAPEPAM-LK.

3. For external parties, such as shareholder and investors, audit report

lag is one of the criteria for the investor to choose the company.

Companies that publish their financial report before the due date, it

has a good reputation.

70

C. Recommendation

1. For future research, it is expected to add research variables such as

Characteristics of the Audit Committee, Corporate Governance,

audit firm industry specialization, etc.

2. For future research, it is expected to add the period of observation,

using another company such as service, construction, transportation,

etc. And, using another model of analysis such as PLS.

71

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79

APPENDIXES

A. Sample Description

1. Details of Sample

Manufacturing Companies 144

Manufacturing Companies is selected by slovin formulation 60

The amount of companies which is being sample (fulfill the

criteria)

30

The study period (2014-2016) 3

Total company during the study period 90

Sample which identify as outlier (7)

Total sample of observation 83

2. Research Sample Name

No Company Name Code

1 Akasha Wira International Tbk ADES

2 Alakasa Industrindo Tbk ALKA

3 Betonjaya Manunggal Tbk BTON

4 Charoen Pokphand Tbk CPIN

5 Daya Varia LaboratoriaTbk DVLA

6 Ekadharma International Tbk EKAD

7 Gudang Garam Tbk GGRM

8 Hanjaya Mandala Sampoerna Tbk HMSP

9 Champion Pacific Indonesia Tbk IGAR

10 Indomobil Sukses Internasional Tbk IMAS

11 Intan Wijaya Internasional Tbk INCI

12 Indofood Sukses Makmur Tbk INDF

13 Jembo Cable Company Tbk JECC

14 Kabelindo Murni Tbk KBLM

15 Kertas Basuki Rachmat Tbk KBRI

16 Kedaung Indah CAN Tbk KICI

17 Lion Metal Works Tbk LION

18 Lionmesh Prima Tbk LMSH

19 Nippon Indosari Corpindo Tbk ROTI

20 Industri Jamu dan Farmasi Sido Muncul Tbk SIDO

21 Sierad Produce Tbk SIPD

22 Holcim Indonesia Tbk SMCB

23 Semen Indonesia Tbk SMGR

24 Selamat Sempurna Tbk SMSM

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80

25 Suparma Tbk SPMA

26 Indo Acidatama Tbk SRSN

27 Tirta Mahakam Resources Tbk TIRT

28 Surya Toto Indonesia Tbk TOTO

29 Trias Sentosa Tbk TRST

30 Tempo Scan Pacific Tbk TSPC

B. Raw Data Description

1. Audit Quality (X1)

Code 2013 2014 2015

LNFEE LNFEE LNFEE

ADES 18,6 19,5 20,0

ALKA 21,4 20,4 20,2

BTON 18,7 18,6 19,3

CPIN 23,7 24,1 24,4

DVLA 20,2 22,6 22,6

EKAD 20,7 21,2 21,2

GGRM 24,9 27,3 25,2

HMSP 22,6 25,6 22,9

IGAR 19,9 20,5 21,7

IMAS 22,5 22,6 22,5

INCI 19,3 19,3 18,9

INDF 19,7 25,2 18,1

JECC 21,0 19.8 21,0

KBLM 19,5 19,4 20,3

KBRI 18,5 18,7 25,1

KICI 18,8 19,3 19,4

LION 19,1 19,2 18,3

LMSH 20,5 20,3 20,3

ROTI 17,1 23,2 17,6

SIDO 19,3 19,9 20,7

SIPD 20,8 21,9 21,8

SMCB 23,4 22,8 22,9

SMGR 17,0 23,0 24,0

SMSM 21,3 22,3 22,3

SPMA 19,2 22,2 22,8

SRSN 18,7 18,5 18,5

TIRT 20,4 20,0 19,7

TOTO 20,6 20,7 20,7

TRST 21,4 21,5 21,3

TSPC 22,2 22,9 23,1

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2. Audit Opinion (X2)

Code Year Name of Company Explanation Code ADES 2014 Akasha Wira International Tbk MUO 0

ALKA 2014 Alakasa Industrindo Tbk UO 1

BTON 2014 Betonjaya Manunggal Tbk UO 1

CPIN 2014 Charoen Pokphand Tbk UO 1

DVLA 2014 Daya Varia LaboratoriaTbk UO 1

EKAD 2014 Ekadharma International Tbk UO 1

GGRM 2014 Gudang Garam Tbk UO 1

HMSP 2014 Hanjaya Mandala Sampoerna Tbk UO 1

IGAR 2014 Champion Pacific Indonesia Tbk MUO 0

IMAS 2014 Indomobil Sukses Internasional Tbk UO 1

INCI 2014 Intan Wijaya Internasional Tbk UO 1

INDF 2014 Indofood Sukses Makmur Tbk UO 1

JECC 2014 Jembo Cable Company Tbk MUO 0

KBLM 2014 Kabelindo Murni Tbk UO 1

KBRI 2014 Kertas Basuki Rachmat Tbk MUO 0

KICI 2014 Kedaung Indah CAN Tbk UO 1

LION 2014 Lion Metal Works Tbk UO 1

LMSH 2014 Lionmesh Prima Tbk UO 1

ROTI 2014 Nippon Indosari Corpindo Tbk UO 1

SIDO 2014 Industri Jamu dan Farmasi Sido Muncul Tbk MUO 0

SIPD 2014 Sierad Produce Tbk UO 1

SMCB 2014 Holcim Indonesia Tbk MUO 0

SMGR 2014 Semen Indonesia Tbk UO 1

SMSM 2014 Selamat Sempurna Tbk MUO 0

SPMA 2014 Suparma Tbk UO 1

SRSN 2014 Indo Acidatama Tbk UO 1

TIRT 2014 Tirta Mahakam Resources Tbk UO 1

TOTO 2014 Surya Toto Indonesia Tbk UO 1

TRST 2014 Trias Sentosa Tbk UO 1

TSPC 2014 Tempo Scan Pacific Tbk UO 1

ADES 2015 Akasha Wira International Tbk UO 1

ALKA 2015 Alakasa Industrindo Tbk UO 1

BTON 2015 Betonjaya Manunggal Tbk MUO 0

CPIN 2015 Charoen Pokphand Tbk UO 1

DVLA 2015 Daya Varia LaboratoriaTbk UO 1

EKAD 2015 Ekadharma International Tbk MUO 0

GGRM 2015 Gudang Garam Tbk UO 1

HMSP 2015 Hanjaya Mandala Sampoerna Tbk UO 1

IGAR 2015 Champion Pacific Indonesia Tbk MUO 0

IMAS 2015 Indomobil Sukses Internasional Tbk UO 1

INCI 2015 Intan Wijaya Internasional Tbk MUO 0

INDF 2015 Indofood Sukses Makmur Tbk UO 1

JECC 2015 Jembo Cable Company Tbk MUO 0

KBLM 2015 Kabelindo Murni Tbk UO 1

KBRI 2015 Kertas Basuki Rachmat Tbk MUO 0

KICI 2015 Kedaung Indah CAN Tbk MUO 0

LION 2015 Lion Metal Works Tbk UO 1

Continue on the next page

82

Code Year Name of Company Explanation Code LMSH 2015 Lionmesh Prima Tbk UO 1

ROTI 2015 Nippon Indosari Corpindo Tbk UO 1

SIDO

2015 Industri Jamu dan Farmasi Sido Muncul

Tbk MUO 0

SIPD 2015 Sierad Produce Tbk UO 1

SMCB 2015 Holcim Indonesia Tbk MUO 0

SMGR 2015 Semen Indonesia Tbk MUO 0

SMSM 2015 Selamat Sempurna Tbk MUO 0

SPMA 2015 Suparma Tbk MUO 0

SRSN 2015 Indo Acidatama Tbk UO 1

TIRT 2015 Tirta Mahakam Resources Tbk UO 1

TOTO 2015 Surya Toto Indonesia Tbk UO 1

TRST 2015 Trias Sentosa Tbk UO 1

TSPC 2015 Tempo Scan Pacific Tbk UO 1

ADES 2016 Akasha Wira International Tbk UO 1

ALKA 2016 Alakasa Industrindo Tbk UO 1

BTON 2016 Betonjaya Manunggal Tbk UO 1

CPIN 2016 Charoen Pokphand Tbk MUO 0

DVLA 2016 Daya Varia LaboratoriaTbk UO 1

EKAD 2016 Ekadharma International Tbk MUO 0

GGRM 2016 Gudang Garam Tbk UO 1

HMSP 2016 Hanjaya Mandala Sampoerna Tbk UO 1

IGAR 2016 Champion Pacific Indonesia Tbk MUO 0

IMAS 2016 Indomobil Sukses Internasional Tbk UO 1

INCI 2016 Intan Wijaya Internasional Tbk UO 1

INDF 2016 Indofood Sukses Makmur Tbk UO 1

JECC 2016 Jembo Cable Company Tbk MUO 0

KBLM 2016 Kabelindo Murni Tbk MUO 0

KBRI 2016 Kertas Basuki Rachmat Tbk MUO 0

KICI 2016 Kedaung Indah CAN Tbk UO 1

LION 2016 Lion Metal Works Tbk MUO 0

LMSH 2016 Lionmesh Prima Tbk UO 1

ROTI 2016 Nippon Indosari Corpindo Tbk UO 1

SIDO

2016 Industri Jamu dan Farmasi Sido Muncul

Tbk UO 1

SIPD 2016 Sierad Produce Tbk UO 1

SMCB 2016 Holcim Indonesia Tbk MUO 0

SMGR 2016 Semen Indonesia Tbk UO 1

SMSM 2016 Selamat Sempurna Tbk UO 1

SPMA 2016 Suparma Tbk MUO 0

SRSN 2016 Indo Acidatama Tbk UO 1

TIRT 2016 Tirta Mahakam Resources Tbk MUO 0

TOTO 2016 Surya Toto Indonesia Tbk UO 1

TRST 2016 Trias Sentosa Tbk UO 1

TSPC 2016 Tempo Scan Pacific Tbk UO 1

83

3. Size of Public Accountant Firm

Code Year Public Accountant Firm Code ADES 2014 Tanubrata Sutanto Fahmi & Rekan 0

ALKA 2014 Johannes Juara & Rekan 0

BTON 2014 Aryanto, Amir Jusuf, Mawar & Saptoto 0

CPIN 2014 Purwantono, Suherman, & Surja (E&Y) 1

DVLA 2014 Purwantono, Suherman, & Surja (E&Y) 1

EKAD 2014 Teramiharja,Pradhono, &Chandra 0

GGRM 2014 Siddharta & Widjaja (KPMG) 1

HMSP 2014 Tanudiredja, Wibisana & Rekan (PWC) 1

IGAR 2014 Hertanto, Grace, Karunawa 0

IMAS 2014 Purwantono, Suherman, & Surja (E&Y) 1

INCI 2014 Hananta Budianto & Rekan 0

INDF 2014 Purwantono, Suherman, & Surja (E&Y) 1

JECC 2014 Tanubrata Sutanto Fahmi & Rekan 0

KBLM 2014 Doli, Bambang, Sulistiyanto, Dadang, Ali 0

KBRI 2014 Tanubrata Sutanto Fahmi & Rekan 0

KICI 2014 Paul Hadiwinata & Rekan (PKF) 0

LION 2014 Kosasih, Nurdiyaman, Tjahjo & Rekan 0

LMSH 2014 Kosasih, Nurdiyaman, Tjahjo & Rekan 0

ROTI 2014 Purwantono, Suherman, & Surja (E&Y) 1

SIDO 2014 Anwar, Sugiharto, & Rekan 0

SIPD 2014 Tanubrata Sutanto Fahmi & Rekan 0

SMCB 2014 Purwantono, Suherman, & Surja (E&Y) 1

SMGR 2014 Osman Bing Satrio & Eny (Deloitte) 1

SMSM 2014 Purwantono, Suherman, & Surja (E&Y) 1

SPMA 2014 Hadori Sugiarto Adi & Rekan 0

SRSN 2014 Aryanto, Amir Jusuf, Mawar & Saptoto 0

TIRT 2014 Pieter, Uways & Rekan 0

TOTO 2014 Purwantono, Suherman, & Surja (E&Y) 1

TRST 2014 Purwantono, Suherman, & Surja (E&Y) 1

TSPC 2014 Tanubrata Sutanto Fahmi & Rekan 0

ADES 2015 Tanubrata Sutanto Fahmi & Rekan 0

ALKA 2015 Johannes Juara & Rekan 0

BTON 2015 Amir Jusuf, Aryanto, Mawar & Rekan 0

CPIN 2015 Purwantono, Suherman, & Surja (E&Y) 1

DVLA 2015 Purwantono, Suherman, & Surja (E&Y) 1

EKAD 2015 Budiman,Wawan, Pamudji &Rekan 0

GGRM 2015 Siddharta & Widjaja (KPMG) 1

HMSP 2015 Tanudiredja, Wibisana & Rekan (PWC) 1

IGAR 2015 Hertanto, Grace, Karunawa 0

IMAS 2015 Purwantono, Suherman, & Surja (E&Y) 1

INCI 2015 Hendrawinata Eddy Siddharta & Tanzil 0

INDF 2015 Purwantono, Suherman, & Surja (E&Y) 1

JECC 2015 Tanubrata Sutanto Fahmi & Rekan 0

KBLM 2015 Doli, Bambang, Sulistiyanto, Dadang, Ali 0

KBRI 2015 Hendrawinata Eddy Siddharta & Tanzil 0

KICI 2015 Paul Hadiwinata & Rekan (PKF) 0

LION 2015 Kosasih, Nurdiyaman, Tjahjo & Rekan 0

LMSH 2015 Kosasih, Nurdiyaman, Tjahjo & Rekan 0

84

ROTI 2015 Purwantono, Suherman, & Surja (E&Y) 1

Continue on the next page

Code Year Audit Accountant Firm Code SIDO 2015 Anwar & Rekan 0

SIPD 2015 Tanubrata Sutanto Fahmi & Rekan 0

SMCB 2015 Purwantono, Suherman, & Surja (E&Y) 1

SMGR 2015 Osman Bing Satrio & Eny (Deloitte) 1

SMSM 2015 Purwantono, Suherman, & Surja (E&Y) 1

SPMA 2015 Paul Hadiwinata & Rekan (PKF) 0

SRSN 2015 Amir Jusuf, Aryanto, Mawar & Rekan 0

TIRT 2015 Pieter, Uways & Rekan 0

TOTO 2015 Purwantono, Suherman, & Surja (E&Y) 1

TRST 2015 Purwantono, Suherman, & Surja (E&Y) 1

TSPC 2015 Tanubrata Sutanto Fahmi & Rekan 0

ADES 2016 Tanubrata Sutanto Fahmi & Rekan 0

ALKA 2016 Johannes Juara & Rekan 0

BTON 2016 Amir Jusuf, Aryanto, Mawar & Rekan 0

CPIN 2016 Purwantono, Suherman, & Surja (E&Y) 1

DVLA 2016 Purwantono, Suherman, & Surja (E&Y) 1

EKAD 2016 Hendrawinata, Eddy Siddharta & Tanzil 0

GGRM 2016 Siddharta & Widjaja (KPMG) 1

HMSP 2016 Tanudiredja, Wibisana & Rekan (PWC) 1

IGAR 2016 Hertanto, Grace, Karunawa 0

IMAS 2016 Purwantono, Suherman, & Surja (E&Y) 1

INCI 2016 Hendrawinata Eddy Siddharta & Tanzil 0

INDF 2016 Purwantono, Suherman, & Surja (E&Y) 1

JECC 2016 Tanubrata Sutanto Fahmi & Rekan 0

KBLM 2016 Anwar & Rekan 0

KBRI 2016 Hendrawinata Eddy Siddharta & Tanzil 0

KICI 2016 Paul Hadiwinata & Rekan (PKF) 0

LION 2016 Kosasih, Nurdiyaman, Tjahjo & Rekan 0

LMSH 2016 Kosasih, Nurdiyaman, Tjahjo & Rekan 0

ROTI 2016 Purwantono, Suherman, & Surja (E&Y) 1

SIDO 2016 Anwar & Rekan 0

SIPD 2016 Tanubrata Sutanto Fahmi & Rekan 0

SMCB 2016 Purwantono, Suherman, & Surja (E&Y) 1

SMGR 2016 Osman Bing Satrio & Eny (Deloitte) 1

SMSM 2016 Purwantono, Suherman, & Surja (E&Y) 1

SPMA 2016 Hadori Sugiarto Adi & Rekan 0

SRSN 2016 Amir Jusuf, Aryanto, Mawar & Rekan 0

TIRT 2016 S.Mannan,Ardiansyah & Rekan 0

TOTO 2016 Purwantono, Suherman, & Surja (E&Y) 1

TRST 2016 Purwantono, Suherman, & Surja (E&Y) 1

TSPC 2016 Tanubrata Sutanto Fahmi & Rekan 0

85

4. Audit Report Lag (Y)

Code

Company Audit Report Lag

2014 2015 2016 ADES Akasha Wira International Tbk 83 89 88

ALKA Alakasa Industrindo Tbk 86 87 87

BTON Betonjaya Manunggal Tbk 84 83 83

CPIN Charoen Pokphand Tbk 86 88 89

DVLA Daya Varia LaboratoriaTbk 77 67 69

EKAD Ekadharma International Tbk 79 77 77

GGRM Gudang Garam Tbk 83 77 82

HMSP Hanjaya Mandala Sampoerna Tbk 77 99 69

IGAR Champion Pacific Indonesia Tbk 76 78 86

IMAS Indomobil Sukses Internasional Tbk 82 83 83

INCI Intan Wijaya Internasional Tbk 83 70 84

INDF Indofood Sukses Makmur Tbk 71 82 80

JECC Jembo Cable Company Tbk 83 83 87

KBLM Kabelindo Murni Tbk 86 87 84

KBRI Kertas Basuki Rachmat Tbk 82 87 90

KICI Kedaung Indah CAN Tbk 77 87 69

LION Lion Metal Works Tbk 75 73 75

LMSH Lionmesh Prima Tbk 70 73 75

ROTI Nippon Indosari Corpindo Tbk 79 83 68

SIDO Industri Jamu dan Farmasi Sido Muncul Tbk 90 82 73

SIPD Sierad Produce Tbk 82 85 77

SMCB Holcim Indonesia Tbk 78 81 80

SMGR Semen Indonesia Tbk 79 83 78

SMSM Selamat Sempurna Tbk 84 88 89

SPMA Suparma Tbk 89 86 89

SRSN Indo Acidatama Tbk 86 70 77

TIRT Tirta Mahakam Resources Tbk 84 82 83

TOTO Surya Toto Indonesia Tbk 84 88 87

TRST Trias Sentosa Tbk 75 73 77

TSPC Tempo Scan Pacific Tbk 78 77 75

86

C. Results of Research

Normality Test Result using K-S Test

Normality Test using Histogram Graphic

One-Sample Kolmogorov-Smirnov Test

Unstandardiz

ed Residual

N 83

Normal Parametersa,b Mean ,0000000

Std.

Deviation 5,85283180

Most Extreme

Differences

Absolute ,094

Positive ,052

Negative -,094

Test Statistic ,094

Asymp. Sig. (2-tailed) ,064c

a. Test distribution is Normal.

b. Calculated from data.

c. Lilliefors Significance Correction.

87

Normality Test using P-Plot Graphic

Multicollonearity Test Result

Coefficientsa

Model

Unstandardized

Coefficients

Standardized

Coefficients

t Sig.

Collinearity

Statistics

B Std. Error Beta

Toleranc

e VIF

1 (Constant) 64,396 7,666 8,400 ,000

Audit

Quality ,959 ,370 ,324 2,588 ,011 ,689 1,451

Opini -3,068 1,531 -,215 -2,004 ,048 ,939 1,066

Size -3,125 1,622 -,246 -1,927 ,058 ,663 1,507

a. Dependent Variable: Audit Report Lag

88

Heterocedasticity Test

Autocorrelation Test using Run

Test

Runs Test

Unstandardiz

ed Residual

Test Valuea ,79721

Cases < Test Value 41

Cases >= Test Value 42

Total Cases 83

Number of Runs 37

Z -1,214

Asymp. Sig. (2-

tailed) ,225

a. Median

89

Coefficient of Determination Test Results

Model Summaryb

Model R R Square

Adjusted R

Square

Std. Error of the

Estimate

1 ,386a ,149 ,116 5,963

a. Predictors: (Constant), Size, Opinion, Audit Quality

Simultaneous Significant Test

ANOVAa

Model Sum of Squares Df Mean Square F Sig.

1 Regression 491,062 3 163,687 4,604 ,005b

Residual 2808,962 79 35,556

Total 3300,024 82

a. Dependent Variable: Audit Report Lag

b. Predictors: (Constant), Size, Opinion, Audit Quality

90

Partial Regression Test Result

Coefficientsa

Unstandardized Coefficients

Standardized

Coefficients

T Sig. B Std. Error Beta

1 (Constant) 64,396 7,666 8,400 ,000

Audit Quality ,959 ,370 ,324 2,588 ,011

Opinion -3,068 1,531 -,215 -2,004 ,048

Size -3,125 1,622 -,246 -1,927 ,058

a. Dependent Variable: Audit Report Lag