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Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute
Asian Institute of Research, Journal Publication, Journal Academics, Education Journal, Asian Institute

Economics and Business

Quarterly Reviews

ISSN 2775-9237 (Online)

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, managemet journal
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open access

Published: 30 August 2024

Institutional Possession, Supervisory Board Size, External Auditor Quality, and Profit Quality

Erna Erna, Etty Murwaningsari, Murtanto Murtanto

Trisakti University, Indonesia

asian institute research, jeb, journal of economics and business, economics journal, accunting journal, business journal, management journal

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doi

10.31014/aior.1992.07.03.603

Pages: 182-190

Keywords: Financial Reporting, Earning Quality, The Big-Four Auditors, Institutional Ownership

Abstract

This study aims to reveal the determinants of profit quality based on governance factors. Specifically, the proposed factors are institutional possession (IP), supervisory board size (SBS), and an external reputable auditor. Besides, this study intends to examine the IP to moderate the relationship between SBS and profit quality. By employing 12 agricultural companies in the Indonesian capital market for ten years, from 2013 to 2022, this study obtains 120 observations and analyzes the data by regression model with polling data. After that, this study demonstrates that IP, the supervisory board size, and reputable external auditor quality positively affect profit quality. The negative interaction effect between IP and supervisory board size (IP*SBS) on profit quality is available: The smaller the SBS, the higher the profit quality, and this tendency happens when institutional possession decreases. In other words, the IP and SBS have substitution roles to crate profit quality.

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