ANALYSIS OF FACTORS AFFECTING THE AUDITOR SWITCHING ON BANKING COMPANIES LISTED IN INDONESIA STOCK EXCHANGE PERIOD 2008 – 2014

Abstract

Auditor switching is a process of public accountant firm replacement done by the company. There are two types of auditor switching in Indonesia: voluntarily and obligatory. Voluntarily auditor switching has brought a suspicion for stakeholder. This research is proposed to discover the influence of auditor opinion, public accountant firm size, management changes, and financial distress towards auditor switching in banking companies since manufacturing companies research are many to find. Population conducted in this research is banking companies that are respectively listed in Indonesia Stock Exchange during 2008 – 2014. Sampling method performed is purposive sampling where criteria are set as a benchmark of sample compatibility which resulting in 28 banking companies. This research is exercising secondary data and documentation technique. The data is analyzed by using descriptive statistic and logistic regression as research method with α 0.05. Independent variables in this research are Auditor Opinion, Public Accountant Firm Size, Management Changes, and Financial Distress while the dependent variable is Auditor Switching. The result of this research exhibits: auditor opinion, public accountant firm size, management changes, and financial distress are simultaneously influencing auditor switching. In hypothesis test, public accountant firm size hypothesis is supported with a significant value 0.005 which is lower than α while the other variables are not. For future researcher, the addition of some variables to attest might be proper. Moreover, the computation of financial distress shall be attested by another method and model.