Geographic Proximity and Audit Outcomes in Cases of COVID–19 Pandemic: Evidence from Indonesia
Authors
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Iman Harymawan
Department of Accountancy, Faculty of Economic and Business, Airlangga University, Indonesia.
https://orcid.org/0000-0001-7621-6252
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Raden Roro Widya Ningtyas Soeprajitno
Department of Accountancy, Faculty of Economic and Business, Airlangga University, Indonesia.
https://orcid.org/0000-0001-5003-1030
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Mohammad Nasih
Department of Accountancy, Faculty of Economic and Business, Airlangga University, Indonesia.
https://orcid.org/0000-0002-7945-7593
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Khairul Anuar Kamarudin
Department of Accountancy, Faculty of Business, Finance, and Management, University of Wollongong, Dubai, United Arab Emirates.
https://orcid.org/0000-0003-3620-9466
DOI:
https://doi.org/10.18488/73.v10i4.3192Abstract
The geographic proximity has faced challenges with the existence of COVID-19 pandemic since 2019. This study aimed to scrutinize the effect of geographic proximity and audit quality by using COVID-19 pandemic as a moderating variable to compare before and after the situation. The samples of this study were Indonesian listed companies from 2018 to 2020 in Indonesia Stock Exchange. This study overcame self-potential selection bias and analyzed using Coarsened Exact Matching and Heckman's 2-Stage Least Square (Heckman 2-SLS). This study found that geographic proximity is significantly associated with the post-pandemic period, whereas geographic proximity did not cause problems before the pandemic. We also provided sufficient evidence of (Coarsened Exact Matching) CEM and Heckman 2-Stage Least Square which found that there were significant and appropriate results of our initial testing. The study implications relate to the auditor to consider pandemic as a factor that has effect on the audit fee.
