Determinant of Audit Quality: The Role of Key Audit Matters, Audit Tenure, Audit Fees and Firm Size (Evidence From Basic Materials and Industrial Companies 2022–2024)

Abstract

This study examines the effects of key audit matters (KAM), auditor tenure, audit fees, and firm size on audit quality in basic material and industrial companies listed on the Indonesia Stock Exchange (IDX) from 2022 to 2024. Using a quantitative approach with purposive sampling, the study analysis 207 firm-year observations from 69 companies through logistic regression analysis. The results indicate that audit fees have a significant positive effect on audit quality, while firm size has a significant negative effect. In contrast, KAM disclosure and auditor tenure do not significantly influence audit quality. These findings show that audit pricing mechanism play a more critical role in enhancing audit quality. From a policy perspective, these findings suggest the need to re-evaluate the implementation of Key Audit Matters (KAM) disclosures to ensure they provide entity-specific, decision-useful information rather than repetitive, boilerplate narratives that are merely replicated across reporting periods.