Badingatus Solikhah, Nicco Della Firmansyah, Kashan Pirzada
The role of board of commissioner in choosing an auditor has increased significantly as a result of 2008 global financial crisis of 2008. This paper examines whether the effectiveness of the BOC (BOC) affects the choice of an auditor. Past research related to the internal mechanisms of Good Corporate Governance (GCG) used the number of commissioners, the proportion of independent commissioners and the number of board meetings as indicators. However, this paper measures the effectiveness of board of commissioners (BOC) by conducting content analysis technique based on the level of independence of the commissioners, board activity, and the number of members, expertise and competence. A sample of 218 companies listed on the Indonesia Stock Exchange between 2013 and 2014 were selected. In this study, descriptive statistics and linear regression models were used for the purpose of revealing the significance of the variables. The results show that companies listed on the Indonesia Stock Exchange have an effective BOC in accordance with related administrative regulations. In addition, the effectiveness of the BOC has a positive effect on the choice of auditor. © Universiti Putra Malaysia Press.
Department of Accounting, Faculty of Economics, Universitas Negeri Semarang, Semarang, Indonesia; Department of Accounting, Faculty of Business and Accountancy, University of Malaya, Kuala Lumpur, Malaysia
