The Effect Of Company Risk, Company Size, And Public Accounting Firm Status On Audit Fees In LQ45 Companies Listed On The IDX In 2019-2023

Abstract

In recent years, the public accounting profession in Indonesia has faced serious challenges concerning the low audit fees received by Public Accounting Firms (PAF). The compensation for audit services is considered disproportionate to the responsibilities and complexity of the auditor's work, which may impact audit quality and the sustainability of the profession. In this context, this study aims to examine the factors that influence audit fees among companies listed in the LQ45 index on the Indonesia Stock Exchange during the 2019–2023 period. Three variables are analysed: company risk, company size, and the status of the public accounting firm. This research employs a quantitative approach using secondary data from annual financial reports and applies multiple linear regression analysis. The results reveal that all three variables—company risk, company size, and PAF status—significantly affect audit fees. Each variable is found to have a positive and significant influence on audit fees. These findings reinforce the view that company characteristics and auditor reputation are important determinants in setting external audit fees. This research contributes valuable insights for stakeholders, including corporate management and auditors, in understanding relevant factors for determining audit fees in a fair and professional manner.