Table 4 Results of Two-Step Difference...

Table 4

Results of Two-Step Difference GMM Analysis on the relationship between audit quality, specifically Audit Tenure (AT), Audit Fees (AF), and Audit Size (B5), And Financial Statement Fraud (FR)

Variables	Coefficient	p Value
FR L1	−6.338	0.000***
AT	−0.532	0.005***
AF	0.963	0.062*
Big5	−1.735	0.016**
PROF	−4.274	0.032**
LEVE	0.164	0.023**
SIZE	−9.598	0.001***
ROA	5.323	0.000***
Arellano-Bond test (AR (2))		0.662
Hansen Test		0.296

Variables	Coefficient	p Value
FR L1	−6.338	0.000***
AT	−0.532	0.005***
AF	0.963	0.062*
Big5	−1.735	0.016**
PROF	−4.274	0.032**
LEVE	0.164	0.023**
SIZE	−9.598	0.001***
ROA	5.323	0.000***
Arellano-Bond test (AR (2))		0.662
Hansen Test		0.296

Note(s):

${F R}_{i t} = {α F R}_{i t - 1} + β_{1} {A T}_{i t} + B_{2} {A F}_{i t} + B_{3} {B 5}_{i t} + B_{4} {P R O F}_{i t} + B_{5} {L e v}_{i t} + B_{6} {S i z e}_{i t} + B_{7} {R o a}_{i t} + {n_{i} + \in}_{i t}$

Note(s): *, **, *** represent significance at the 10, 5 and 1 percent levels, respectively. FR is Dechow f-value, AT is auditor period; Big5 is five big audit firms (Deloitte, KPMG, Enrst and Young, PWC, BDO); AF is the amount paid for the auditor service; Prof is profitability measured by net profit margin; Lev is a leverage of the company is measured by total assets divided by total liabilities of the company; Size that is measured by the total assets of the company; ROA is return on assets is measured by income continuing operation divided by total assets

Source(s): Table created by authors

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