Financial Determinants of Audit Quality: Longitudinal Evidence from a Single Non-Public Firm
DOI:
https://doi.org/10.20527/jwm.v14i2.494Keywords:
Audit Quality, Profitability, Firm Size, Leverage, Audit FeeAbstract
Audit quality is essential for maintaining the credibility of financial reporting. This study examines the effects of profitability, firm size, leverage, and audit fee on audit quality in a single non-public manufacturing compa-ny, PT Decorindo Inti Alam Wood, using longitudinal data from 2013–2024 and multiple linear regression estimated through the Ordinary Least Squares (OLS) method. The results indicate that audit fee positively influences audit quality, whereas profitability and leverage exhibit negative effects, and firm size shows a posi-tive but inconsistent association. These findings suggest that audit engagement characteristics are more deci-sive than internal financial performance factors in shaping audit quality within a privately held corporate en-vironment. Theoretically, this study provides firm-level longitudinal evidence from a single non-listed compa-ny, thereby extending audit quality literature beyond the dominant focus on publicly listed firms. Practically, the findings emphasize the importance of audit fee structuring and engagement governance in strengthening audit quality in contexts characterized by limited external monitoring mechanisms.
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