The purpose of this paper is to evaluate the effect between audit quality and risk taking on value creation.,Population under study is companies on the Jakarta Stock Exchange from 2004 to 2015. Considering the limitations, 145 companies studied in this research, which made a sample containing 1,740 company-years. This study is based on the panel data and multivariate regression method. This research uses fixed and random effects to estimate the regression. In this paper, five components of audit quality, including auditor specialization, tenure, audit firm size, ownership concentration and the percentage of unbounded members of the board, are studied.,The results of this study indicate that among these five components as well as the risk factor, only tenure and ownership concentration have a significant effect on value creation of companies. In other words, both ownership concentration and tenure are positively effective in value creation and other variables have no significant effect on value creation. Besides, none of them could affect the risk taking on value creation.,The outcomes of the current study help audit market and capital market in developing nations.

The relationship between audit quality and risk taking toward value creation in Indonesia

Institutional owners possess a large portion of the company stocks. Regarding the separation of the ownership from the management in a firm, the pivotal role of these owners in controlling and monitoring the management of the firms becomes more prominent. Since, audit fees is an important issue both for the managers and independent auditors, so this study aims at investigating the relationship between institutional ownership and audit fees in 50 firms listed in Tehran Stack Exchange. Time span for this study has been specified between 2008 to 2012. The analysis of the data is carried out by using Eviews software. At the end, it was found that there is no a meaningful relationship between institutional ownership and audit fees..

Esfandyar Mohammadi

Papers

Investigating the Relationship between Institutional Ownership and Audit Fees