Purpose

A company needs to use auditing procedures to ensure the reliability of financial statements while also providing transparency to stakeholders. The extent of risk associated with the company depends on the directors’ involvement in its daily operations. This paper aims to study the relationship between busy chief executive officers (CEOs) and audit fees.

Design/methodology/approach

This study uses 1,037 data samples from companies listed on the Indonesia Stock Exchange from 2010 until 2018. It adopts the ordinary least squares method to test the hypothesis. Furthermore, this study performs robustness tests, such as propensity score matching (PSM) and Heckman’s two-stage least square tests (Heckman, 1979), to address the endogeneity issues.

Findings

This study finds that the appearance of a busy CEO in a company will significantly increase the audit fee. It also concludes that a long tenure of a busy CEO will substantially weaken the positive relationship between the CEO and the audit fee. However, this study discovers that, in a company with a busy CEO, a monitoring mechanism through the independent commissioner and risk management committee will only help to maximize the firm’s practical risk evaluation a little. This result is robust because the PSM and Heckman tests display consistent results, so it is free from endogeneity issues.

Practical implications

This study is valuable for theoretical and practical development in Indonesia. Due to the minimum regulation about multiple positions on boards in Indonesia, the shareholders must be aware of the need to choose a board with more skill and commitment to improve the position of the company. This result also warns the C-level of the company to pay more attention to its risk-monitoring process to make it more effective and efficient.

Originality/value

Indonesia is one of the countries that have implemented the two-tier governance system. With the minimum regulation about multiple directorships in Indonesia, this study offers new insights into how a busy CEO will be related to the audit outcomes.

中文翻译：

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忙碌的首席执行官和审计费用：来自印度尼西亚的证据

目的

公司需要使用审计程序来确保财务报表的可靠性，同时向利益相关者提供透明度。与公司相关的风险程度取决于董事对其日常运营的参与程度。本文旨在研究忙碌的首席执行官（CEO）与审计费用之间的关系。

设计/方法论/途径

本研究使用了2010年至2018年印尼证券交易所上市公司的1,037个数据样本，采用普通最小二乘法来检验假设。此外，本研究还进行了稳健性检验，例如倾向得分匹配（PSM）和赫克曼的两阶段最小二乘检验（Heckman，1979），以解决内生性问题。

发现

这项研究发现，公司中出现忙碌的CEO会显着增加审计费用。它还得出结论，忙碌的首席执行官的长期任职将大大削弱首席执行官与审计费用之间的积极关系。然而，本研究发现，在首席执行官忙碌的公司中，通过独立专员和风险管理委员会的监督机制只能帮助公司最大化实际风险评估一点点。这个结果是稳健的，因为 PSM 和 Heckman 检验显示了一致的结果，因此它不存在内生性问题。

实际影响

这项研究对于印度尼西亚的理论和实践发展具有重要意义。由于印度尼西亚对董事会多个职位的最低监管，股东必须意识到需要选择一个更有技能和承诺的董事会来提高公司的地位。这一结果也警示公司的C级要更加关注其风险监控流程，使其更加有效和高效。

原创性/价值

印度尼西亚是实行两级治理体系的国家之一。由于印度尼西亚对担任多个董事的最低监管，这项研究为忙碌的首席执行官如何与审计结果相关提供了新的见解。