Influence of Financial Distress, Management Turnover and Audit Opinion to Auditor Switching (Empirical Study on Manufacturing Companies Listed on The BEI During 2011-2013 Period)

Abstract

This study aims to examine the influence of financial distress, management turnover and audit opinion to auditor switching. The variables used in this study are auditor switching, financial distress, management turnover and audit opinion. The samples used in this study are manufacturing companies listed on Indonesia Stock Exchange (BEI) during 2011-2013 period. Companies whichbecome samplesin this study are the companies those contain information including all operational definition of research, namely: financial distress,management turnover, and audit opinion. Data were analyzed withmultiple regression method using Statistical Product and Service Solution (SPSS) version 17.0.The result showed that the financial distress and management turnover influence companies to dosuch auditor switching, while audit opinion does not influence companies to do such auditor switching. The result showed that financial distress has significance level 0.040 (p < 0.05), indicating H1 is accepted that financial distress influences auditor switching. Management turnover variable has significance level 0.000 (p < 0.5), indicating H2 is accepted that management turnover influences auditor switching. Audit opinion variable has significance level 0.952 (p > 0.05), indicating H3 is unacceptable, so that audit opinion doesn’t influence auditor switching.

Keywords: financial distress,management turnover, audit opinion and auditor switching.