Can Size of Client Company Effect to Audit Quality, Litigation and Company Value?

This study aims to examine and provide empirical evidence of the effect of client company size on audit quality as well as the effect of audit quality on litigation and company value of both audit quality-detecting misstatement and audit quality-reporting misstatement and analyzing based on auditor-auditee factors in the perspective of regulation theory and signal theory. This type of research is quantitative-causality conducted by survey method. The population in this study is an accountant who works as an external auditor who is in Indonesia with a sample of accountants who work as an external auditor at the KAP located in the Jakarta area. The number of samples used as much as 168 respondents. Withdrawal technique/sampling is done by purposive sampling based on certain considerations (judgment sampling). The type of data used is primary data and data collection techniques using questionnaires (questionnaires) that researchers directly to the respondent or sent via the post office. The scale used is the interval scale by providing 6 choices of answers. Furthermore, to test the hypothesis in this study used path analysis. The results showed that: 1) The size of the client company had a significant positive effect on the audit quality-detecting misstatement but had no significant effect on the audit quality-reporting misstatement; 2) Audit quality-detecting misstatement and quality audit-reporting misstatement have a significant negative effect on litigation; 3) Audit quality-detecting misstatement and audit quality- reporting misstatement have a significant positive effect on company value. The results of this study also shows that not only auditor factors that affect audit quality but auditee factors also affect to audit quality.