The Impact of Managerial Ownership and Independent Board Member on Independent Audit Committee and Its Implication on Audit Quality in the Banking Companies Listed in Indonesia Stock Exchange

This research aims to investigate the impact of managerial ownership and independent board member on the independent audit committee. Furthermore, it aims to examine the impact of managerial ownership, the independent board member and independent audit committee on audit quality. The unit of analysis represents banking companies listed on the Indonesia stock exchange (IDX) from 2010 to 2015. This study is an explanatory research that uses the partial least squared statistic for hypothesis testing. The results showed that the independent board member has a significant impact on the independent audit committee. It is found that managerial ownership and the independent board member have an impact on audit quality. It is necessary to conduct further research on the ideal level of managerial ownership and number of an independent board member to produce a good audit quality on banks in Indonesia.