Examining the Independent Audit Committee, Managerial Ownership, Independent Board Member and Audit Quality in Listed Banks

  • Hisar Pangaribuan Adventist University of Indonesia, Indonesia
  • Jenny Sihombing Adventist University of Indonesia, Indonesia
  • Oluwatoyin Muse Johnson Popoola Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia
Keywords: Managerial Ownership, Independent Board Member, Independent Audit Committee, Audit Quality, Banking Sector


This research examines the effects of the independent audit committee on the relationship between managerial ownership and independent board member on audit quality in the Indonesian listed banks. Primarily, the study examines the direct relationship of managerial ownership, independent board member and independent audit committee on the audit quality of listed banks in the Indonesian Stock Exchange. Also, the current study explores the mediating effect, indirect effect, of the independent audit committee on the relationship between managerial ownership, independent board member, and audit quality in the listed banks in Indonesia. The results show that the independent board member has a significant impact on the independent audit committee and the audit quality. The study reveals that managerial ownership does not influence audit quality. The adoption of the independent audit committee with a long tenure of years can be potentially risky and less creative. As a result, their oversight functions may be in jeopardy, impaired or reduced performances. The research findings reveal no significant indirect effects of the independent audit committee on the relationship between managerial ownership, independent board member and audit quality in the banks listed in IDX. Independent board members need to renew the appointment of the independent audit committee members to improve the quality of the oversight functions undertaken by the audit committee, and hence, enhance audit quality.


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How to Cite
Pangaribuan, H., Sihombing, J., & Popoola, O. M. J. (2018). Examining the Independent Audit Committee, Managerial Ownership, Independent Board Member and Audit Quality in Listed Banks. Indian-Pacific Journal of Accounting and Finance, 2(2), 4-23. Retrieved from http://ipjaf.omjpalpha.com/index.php/ipjaf/article/view/45
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