Influence of Independent Commissioner on Audit fee - Navigasi Berita a -->
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Influence of Independent Commissioner on Audit fee

Navigasi - Based on agency theory (agency theory) expressed by Jensen and Meckling (1976) which in general says, in the company there is a disparity of interests between principals and agents. The contractual relationship between the company and the auditor will be accepted by the independent commissioner.

Influence of Independent Commissioner on Audit fee
Influence of Independent Commissioner on Audit fee


Independent commissioners are the most important members of the organization after the General Meeting of Shareholders (GMS), because they have a very important role in the company. The independent commissioner has the right to make the company's going concern and management decisions in determining the amount of compensation to be given to the auditor in the examination of the financial statements.

Independent Commissioners who are getting stronger are one of the governance structures that tend to require public accountants to produce higher audit quality in order to improve the company's valuation in the eyes of shareholders.

The interest of the independent commissioner is low on the high standard of audit quality, the independent commissioner must see how much detection risk is accepted. Detection risk is evidence that can be collected in finding misstatements beyond a tolerable amount (Arens et al., 2011), if the detection risk is reduced, the auditor must collect more evidence in the audit. More audit work is accepted and takes a long time, meaning that the auditor demands a high audit fee for the services of a public accountant.

Many independent commissioners will lead to good internal control, but there is a lot of input to the board of directors in preparing financial reports in order to produce quality reportsreports

In this case, the larger the size of the independent commissioner, the larger the audit fee that will be paid by the company to the auditor, as the trustee wants good financial reports and asks for more payments for services to be performed.

This means that the presence of relatively many independent commissioners will demand quality and reliable financial reports, so as to ensure that the financial statements are carefully examined, it tends to make the auditor's work more difficult and the auditor will ask for a larger audit fee. This is supported by research by Haryo (2012), that independent commissioners have an effect on external audit fees.
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