THE EFFECT OF AUDIT QUALITY AND AUDIT COMMITTEE ON FINANCIAL STATEMENT QUALITY (an Empirical Study of Hotel Companies Listed on the Indonesia Stock Exchange from 2019-2023)

MADU, DHANDY HERMAWAN (2026) THE EFFECT OF AUDIT QUALITY AND AUDIT COMMITTEE ON FINANCIAL STATEMENT QUALITY (an Empirical Study of Hotel Companies Listed on the Indonesia Stock Exchange from 2019-2023). Thesis thesis, Universitas Sangga Buana.

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Abstract

THE EFFECT OF AUDIT QUALITY AND AUDIT COMMITTEE ON FINANCIAL STATEMENT QUALITY (an Empirical Study of Hotel Companies Listed on the Indonesia Stock Exchange from 2019-2023) 3 DHANDY HERMAWAN MADU (1212221009) Pembimbing 1 : Dr. Nunung Nuryani, M.Si,Ak.,CA Pembimbing 2 : Dr. Zaenal Arifin, Ir., M.Si ABSTRACT The dynamic development of the business world and the global economy has created business process complexities that demand stricter oversight over all organizational activities. Business processes executed without adequate monitoring mechanisms have the potential to lead to abuse of authority and fraudulent practices that harm various interested parties. This phenomenon indicates a structural weakness in the corporate governance system that can threaten the credibility of financial information. Transparency and accountability are the core pillars of sound financial management, particularly for organizations with high public exposure, such as hotels listed on the Indonesia Stock Exchange (IDX). Based on this background, the problem formulation in this study is to determine the conditions of audit quality, the audit committee, and financial statement quality, as well as to analyze the extent of the partial and simultaneous effects of audit quality and the audit committee on financial statement quality in hotel companies listed on the Indonesia Stock Exchange (IDX) for the 2019-2023 period. This quantitative study utilized secondary data consisting of financial statements and annual reports of hotel sector issuers listed on the Indonesia Stock Exchange (IDX). By employing a purposive sampling technique, a final sample of 210 observation data was obtained over a 5-year observation period (2019-2023). The data analysis techniques applied to test this model included classical assumption tests, multiple linear regression analysis, partial test (t-test), simultaneous test (F-test), and coefficient of determination ($R^2$) processed via IBM SPSS Statistics software. The t-test results demonstrated that audit quality (proxied by Big Four CPA firm reputation and audit opinion) exerted a positive and significant effect on financial statement quality. Conversely, audit committee characteristics (size, independence, and financial expertise) showed no significant effect on financial statement quality. However, the F-test results confirmed that audit quality and the audit committee collectively exerted a significant effect, with an Adjusted R Square value of 9.6%. Consequently, financial statement quality in the Indonesian hotel sector is predominantly determined by external monitoring from independent auditors rather than the formal attributes of internal oversight by the audit committee, which tends to reflect symbolic compliance with regulations. Keywords: Audit Quality, Audit Committee, Financial Statement Quality, Hotel Sector.

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