Factors Influencing Audit Quality of Banking Business Sector in Indonesia

Improved audit quality is needed to increase investor’s confidence in a company's financial statements. Competence and independence are requirements to produce a quality audit. This study is a quantitative study that aimed to analyze the effect of audit tenure, time budget pressure, firm size, and auditor specialization on audit quality. The population and data in this study comprised banking companies listed in the Indonesia Stock Exchange (IDX) in 2015-2019 and were obtained using the purposive sampling method. Earnings surprise benchmark was used as a measure of audit quality in this study with logistic regression analysis method as the analysis method. The results of the study indicated that audit tenure and time budget pressure did not provide an increase in audit quality. While the size of the company had an effect on the decline in audit quality significantly, the auditor specialization greatly improved audit quality. The implication of this research proves that to maintain audit quality, auditors must always maintain and improve their professional qualifications and plan more mature audits on audit work in larger companies.