ABSTRACT
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. © 2022 Conscientia Beam. All Rights Reserved.
ABSTRACT
Purpose: Without a doubt, COVID-19 is a disruptive event that one may not consider before it becomes a global pandemic. This study aims to examine the firm’s risk preference, represented as board characteristics towards COVID-19 exposure in Indonesia. Design/methodology/approach: This study uses the boardroom’s average value of board age and female proportion to represent board characteristics. Fixed-effect regression based on industry (Industry FE) and year (Year FE) analyses 861 firm-year observations of all firms listed on the Indonesian Stock Exchange in 2019–2020. Findings: The result shows a positive relationship between the female board and COVID-19 exposure disclosure. Meanwhile, the age proportion does not offer a significant result. The additional analysis document that the directors mainly drove the result and were only relevant during 2020. These results are robust due to coarsened exact matching tests and Heckman’s two-stage regression. This study enriches COVID-19 literature, especially from a quantitative perspective. Originality/value: The rise of global crises makes the outputs of this study important for non-financial listed firms in Indonesia. © 2022, Emerald Publishing Limited.