have a significant influence on stock prices

Oct 13, 2025 by windailys.com 148 views

Introduction

The stock market is a complex and dynamic system, influenced by various factors that can impact stock prices. While financial performance, market sentiment, and news are well-known factors, there are other factors that may escape attention, such as the audit of financial statements. This study aims to reveal the effect of audit report lag, earnings per share (EPS), audit opinion, and size of the public accounting firm on stock prices in manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2008-2010 period.

Methodology

This study uses the purposive sampling method by taking a sample of 34 companies from a total of 134 manufacturing companies listed on the IDX. The data used was obtained from the financial statements of each company published through the website www.idx.co.id. Data analysis was carried out using a multiple linear regression model, which had previously been tested with a classic assumption.

Results

The results showed that Audit Report Lag, Audit Opinion, and Size of the Public Accounting Firm did not significantly affect the stock price. However, Earnings per share (EPS) is proven to have a significant positive influence on stock prices. This shows that the higher the EPS, the higher the company's share price.

Simultaneously, audit report lag, earnings per share, audit opinion, and size of the public accounting firm have a significant influence on stock prices. That is, the four factors together play a role in determining stock prices.

Discussion

Audit Report Lag

Audit Report Lag is the time needed by the company to complete the audit process and publish financial statements. The longer the time needed, the longer the investor gets information about company performance. This study found that the Audit Report Lag had no significant effect on stock prices. This may be caused by several factors, such as:

Investors already have access to faster information, such as interim financial statements or company press releases.
The company has provided sufficient and transparent information to investors through other communication channels.

Audit Opinion

Audit opinion is an independent assessment of auditors of financial statements. The opinions given can be in the form of reasonlessness, reasonable with exceptions, or refuse to give opinions. This study found that audit opinion had no significant effect on stock prices. This is probably caused by:

Investors are more focused on company financial performance than audit opinion.
Investors are accustomed to giving various opinions and tend not to care too much.

Size of Public Accounting Firm

The size of a public accounting firm can demonstrate the reputation and independence of a public accounting firm. The greater the size of a public accounting firm, the higher the reputation and the more independent in providing audit opinion. This study found that the size of a public accounting firm had no significant effect on stock prices. This may be due to:

Investors consider audit quality more than the size of a public accounting firm.
The company prefers a public accounting firm that has specific expertise, regardless of its size.

Earnings Per Share (EPS)

Earnings Per Share (EPS) is a net profit of the company divided by the number of outstanding shares. EPS shows the company's profitability and is considered as one of the important factors in determining stock prices. This study proves that EPS has a positive and significant influence on stock prices. This shows that the higher EPS, the higher the company's value in the eyes of investors and its share prices.

Conclusion

In conclusion, this study shows that Earnings Per Share (EPS) is the most significant factor in determining the stock price of manufacturing companies on the IDX. Although audit report lag, audit opinion, and size of the public accounting firm have no partial significant influence, but simultaneously, the four factors have a significant influence on stock prices.

Implications for Investors

For investors, this research provides several important points:

Pay close attention to the EPS company that you want to invest.
Not only relying on financial statements, but also other information such as press releases and interim financial statements.
Understand that audit opinion is only one indicator in determining the quality of financial statements.

Opportunities for Further Research

This research opens opportunities for further research, such as:

Analyzing the effect of audit report lag, audit opinion, and size of a public accounting firm on stock prices in other company sectors on the IDX.
Considering other factors that might affect stock prices, such as business risk, macroeconomic conditions, and market sentiment.

Limitations and Future Research Directions

This study has several limitations, including the sample size and the time period considered. Future research can build on this study by considering a larger sample size and a longer time period. Additionally, future research can consider other factors that might affect stock prices, such as business risk, macroeconomic conditions, and market sentiment.

Conclusion

In conclusion, this study provides new insights into the factors that affect stock prices in manufacturing companies listed on the IDX. The results show that EPS is the most significant factor in determining stock prices, while audit report lag, audit opinion, and size of the public accounting firm have no partial significant influence. However, simultaneously, the four factors have a significant influence on stock prices. This study provides important implications for investors and opens opportunities for further research.

Frequently Asked Questions

Q: What is the purpose of this study?

A: The purpose of this study is to reveal the effect of audit report lag, earnings per share (EPS), audit opinion, and size of the public accounting firm on stock prices in manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2008-2010 period.

Q: What is the methodology used in this study?

A: This study uses the purposive sampling method by taking a sample of 34 companies from a total of 134 manufacturing companies listed on the IDX. The data used was obtained from the financial statements of each company published through the website www.idx.co.id. Data analysis was carried out using a multiple linear regression model, which had previously been tested with a classic assumption.

Q: What are the results of this study?

A: The results showed that Audit Report Lag, Audit Opinion, and Size of the Public Accounting Firm did not significantly affect the stock price. However, Earnings per share (EPS) is proven to have a significant positive influence on stock prices. This shows that the higher the EPS, the higher the company's share price.

Q: What is the significance of this study?

A: This study provides new insights into the factors that affect stock prices in manufacturing companies listed on the IDX. The results show that EPS is the most significant factor in determining stock prices, while audit report lag, audit opinion, and size of the public accounting firm have no partial significant influence. However, simultaneously, the four factors have a significant influence on stock prices.

Q: What are the implications of this study for investors?

A: For investors, this research provides several important points:

Pay close attention to the EPS company that you want to invest.
Not only relying on financial statements, but also other information such as press releases and interim financial statements.
Understand that audit opinion is only one indicator in determining the quality of financial statements.

Q: What are the opportunities for further research?

A: This research opens opportunities for further research, such as:

Analyzing the effect of audit report lag, audit opinion, and size of a public accounting firm on stock prices in other company sectors on the IDX.
Considering other factors that might affect stock prices, such as business risk, macroeconomic conditions, and market sentiment.

Q: What are the limitations of this study?

A: This study has several limitations, including the sample size and the time period considered. Future research can build on this study by considering a larger sample size and a longer time period.

Q: What are the future research directions?

A: Future research can consider other factors that might affect stock prices, such as business risk, macroeconomic conditions, and market sentiment. Additionally, future research can consider a larger sample size and a longer time period.