Journal of Management Research and Review (JMRR)

Firm Size, Firm Complexity, And Audit Fees in Financial Statement Restatement: The Moderating Role of Auditor Industry Specialization

Putri, Djihan Kania, Tan, Andreas, Supriono

6 October 2026 · Vol. 2, Issue 10, pp. 817-825

DOI: 10.65150/EP-jmrr/V2E10/2026-03

Abstract

This study examines whether firm size, firm complexity, and audit fees are associated with financial statement restatement, and whether auditor industry specialization moderates the relationship between firm complexity and restatement. The study uses public companies in the industrial and infrastructure sectors listed on the Indonesia Stock Exchange during 2020–2024. Using purposive sampling, 73 firms were selected, producing 365 firm-year observations. Financial statement restatement is measured as a binary outcome, while firm size is measured by the natural logarithm of total assets, firm complexity by the number of subsidiaries, audit fees by the natural logarithm of disclosed audit fees, and auditor industry specialization by a market-share approach. Binary logistic regression is employed to test the hypotheses. The results show that firm size is significantly associated with financial statement restatement (B = 0.003; p = 0.018), as is firm complexity (B = 0.047; p = 0.033). Audit fees are not significantly associated with restatement (B = −0.002; p = 0.353). The interaction between firm complexity and auditor industry specialization is negative and statistically significant (B = −0.059; p = 0.011), indicating that higher levels of auditor industry specialization weaken the positive association between firm complexity and financial statement restatement. The findings suggest that the relationship between firm complexity and financial statement restatement varies with the level of auditor industry specialization, highlighting the relevance of industry-specific audit expertise in addressing risks associated with complex firms.

Keywords: Financial Statement Restatement, Firm Complexity, Firm Size, Audit Fees, Auditor Industry Specialization

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Putri, Djihan Kania, Tan, Andreas, & Supriono (2026). Firm Size, Firm Complexity, And Audit Fees in Financial Statement Restatement: The Moderating Role of Auditor Industry Specialization. Journal of Management Research and Review, 2(10), 817-825. https://doi.org/10.65150/EP-jmrr/V2E10/2026-03

@article{Putri2026,
  title   = {Firm Size, Firm Complexity, And Audit Fees in Financial Statement Restatement: The Moderating Role of Auditor Industry Specialization},
  author  = {Putri and Djihan Kania and Tan and Andreas and Supriono},
  journal = {Journal of Management Research and Review},
  year    = {2026},
  volume  = {2},
  number  = {10},
  pages   = {817-825},
  doi     = {10.65150/EP-jmrr/V2E10/2026-03},
  url     = {https://doi.org/10.65150/EP-jmrr/V2E10/2026-03}
}

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