Effects of Auditor Quality on Market-based and Accounting-based Financial Statement Quality and Its Impacts on Economic Consequences (A Case on Indonesia Capital Market)
Hasibuan, Abdul Nasser
Lubis, Ade Fatma
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The present research was aimed to describe Effects of Auditor Quality on Market-based and Accounting Financial-based Statement Quality and its Impacts on Economic Consequences in Indonesia Stock Exchange. Samples used were companies incorporated in manufacturing companies listed on Indonesia Stock Exchange(IDX) in the period 2011-2015. The total samples were 100. The sampling method employed probability sampling with proportionate stratified random sampling technique. The analytical model used in this research was SEM (Structural Equation Modeling) where a statistical technique was capable of analyzing the pattern of relationships between latent constructs and the indicators; one latent construct and another; as well as direct error measurement. SEM allows direct analysis between several dependent and independent variables.This research found that auditor quality has significant effects on market-based and accountingbased financial statements. As for auditor quality variable on economic consequences, it has a significant effect. For the intervening effect of auditor quality variable on economic consequences, using market-based and accounting-based financial statement as intervening variables, it has a significant effect; where the contribution of market-based and accounting-based financial statements’ quality is considerably greater than its direct effects.