Case Auditor Change in Indonesia

Abstract

This study aims to analyze the effect of profitability and corporate financial distress on auditor turnover in Indonesia. This study uses descriptive and verification methods with a quantitative approach. The population used in this study are 56 annual financial statements of Manufacturing Companies in the Pharmaceutical Sub-Sector which are listed on the Indonesia Stock Exchange. The results showed that profitability had a significant effect on auditor turnover. This shows that the profitability of a developed company has large funds to replace a better auditor. While the company's financial difficulties have no significant effect on auditor turnover, which means that the change of auditors will ensure the company's financial condition so that auditor changes will not be carried out when the company is in financial difficulty. The impact of this research, manufacturing companies can consider carefully in making decisions to change auditors.