Does Auditor Rotation Increase Auditor Independence?

  • Junaidi Junaidi Universitas Teknologi Yogyakarta
  • Jogiyanto Hartono Universitas Gadjah Mada
  • Eko Suwardi Universitas Gadjah Mada
  • Setiyono Miharjo Universitas Gadjah Mada
  • Bambang Hartadi Universitas Teknologi Yogyakarta
Keywords: Auditor, Indonesia Stock Exchange

Abstract

This study aims to empirically test the effects of auditor rotation and auditor tenure on an auditor’s independence in companies listed on the Indonesia Stock Exchange during the years 2002-2010. This study using logistic regression estimation technique. The results show that, statistically, the auditor’s tenure has significant negative effects on the auditor’s independence, measured by the tendency to give a ‘going concern’ opinion. Furthermore, the results also show significant differences between the effects of short and long term tenures on the auditors’ independence. Auditor rotation has significant positive effects on the auditors’ independence.

Author Biographies

Junaidi Junaidi, Universitas Teknologi Yogyakarta

Lecturer at Faculty of Informatics Technology and Business, Universitas Teknologi Yogyakarta. He got his Doctor (2014) and M.Si (2004) form Universitas Gadjah Mada, and his Bachelor Degree (1998) from Universitas Teknologi Yogyakarta. His research interest include Auditing and Financial Report Analysis. He is also active in various national and international seminars. Several scientific studies have been published in accredited national journals, and international journals in Scopus indexes. In addition to being a lecturer he also researchers, business practitioners, author, and active writer in various social media.

Author contact details: Faculty of Informatics Technology and Business, Universitas Teknologi Yogyakarta, Jl. Ring Road Utara Jombor Sleman Yogyakarta, telp. (+6274) 623310, fax. (0274) 623306, email: masjoen@uty.ac.id, and mobile phone: +62889-1770-777.

Jogiyanto Hartono, Universitas Gadjah Mada

Lecturer at Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada. He earned his Ph.D. from Temple University, United States (1997). His M.B.A. from Western Michigan University, United States (1991), and his Bachelor Degree from Faculty of Economics, Universitas Gadjah Mada (1985). Currently (2016), he is the Doctoral Program Coordinator of Faculty of Economics and Business Universitas Gadjah Mada.

Author contact details: Faculty of Economics and Business Universitas Gadjah Mada, Yogyakarta, Indonesia; phone +62 274 548510; email: jogiyantohm@ gmail.com.

Eko Suwardi, Universitas Gadjah Mada

Lecturer at Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada. He earned his Ph.D. from Queensland University of Technology, Australia (2005). His M.Sc. from California State University, United States (1994), and his Bachelor Degree from Faculty of Economics, Universitas Gadjah Mada (1987). Currently (2016), he is the Dean of Faculty of Economics and Business Universitas Gadjah Mada.

Author contact details: Faculty of Economics and Business Universitas Gadjah Mada, Yogyakarta, Indonesia, phone [+6274]548510, email: e.suwardi@ ugm.ac.id.

Setiyono Miharjo, Universitas Gadjah Mada

Lecturer at Department of Accounting, Faculty of Economics and Business, Universitas Gadjah Mada. He earned his Ph.D. from The Fox School of Business, Temple University, Philadelphia (2007), his M.B.A. from Haworth College of Business, Western Michigan University (1994), and his Bachelor Degree from Faculty of Economics, Universitas Gadjah Mada (1990). His main areas of research include Financial Accounting, Managerial Accounting, and Taxation.

Author contact details: Faculty of Economics and Business Universitas Gadjah Mada, Yogyakarta, Indonesia, phone +62 274 548510; email: jonset@gmail.com.

Bambang Hartadi, Universitas Teknologi Yogyakarta

Lecturer at Faculty of Informatics Technology and Business Universitas Teknologi Yogyakarta. He received his Ph.D (2006) from School of Management USM Malaysia. He took his Master of Management (1996) on Marketing and Accounting Management in Universitas Gadjah Mada. He took his undergraduate program (1982) from Faculty Economics Universitas Gadjah Mada. Currently, he is the rector of Universitas Teknologi Yogyakarta.

Author contact details: at Faculty of Informatics Technology and Business Universitas Teknologi Yogyakarta, Jl. Ring Road Utara Jombor Sleman Yogyakarta, Indonesia; email: bhartadi@yahoo.com.

References

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Published
2016-12-02
How to Cite
Junaidi, J., Hartono, J., Suwardi, E., Miharjo, S., & Hartadi, B. (2016). Does Auditor Rotation Increase Auditor Independence?. Gadjah Mada International Journal of Business, 18(3), 315-336. Retrieved from https://dev.journal.ugm.ac.id/v3/gamaijb/article/view/15561
Issue
Vol 18 No 3 (2016): September-December
Section
Articles

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Gadjah Mada International Journal of Business by Master of Business Administration, Faculty Economics and Business, Universitas Gadjah Mada is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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