Factors affecting audit quality and good corporate governance and its implication to accounting information quality (survey on trusted company awardees listed in Indonesia stock exchange 2011 - 2016)

Abstract

Information is valued by users if it is relevant and faithfully represented. Information possesses quality when it meets the expectation of each user. Accounting information quality is what the stakeholders are expecting in making decision. This paper aims to explore the factors affecting audit quality and good corporate governance and its implication to accounting information quality. Factors affecting audit quality are audit firm's age and audit firm tenure while factors affecting good corporate governance are audit committee, board of directors, and institutional ownership. Audit quality and good corporate governance have implication on accounting information quality. The findings showed that audit firm's age and audit tenure has significant effect on audit quality. On the other hand, audit committee and board of director has significant effect on good corporate governance, while institutional ownership has no. significant effect on good corporate governance. Auditor's specialization is the proxy for audit quality, and the findings showed that it has no significant effect on accounting information quality, yet good corporate governance has significant effect on accounting information quality. A well equipped auditor renders assurance services with quality, and well governed and regulated company provides relevant and faithfully represented information to all users.