III. RESEARCH METHOD
This research uses 2,240 company-year observations which were consistently listed
on the Indonesian Stock Exchange from 2007 to 2013. Table 3.1 shows that the number of
company-year observations consistently listed were 2,240 observations, which are about
75,12 per cent of total company-year observations from 2007 to 2013 (2,982 observations).
This research uses multiple linear regression1 to investigate the effect of (external) audit
characteristics on firm’s value. Audit characteristics are measured by audit tenure, audit firm
size, and audit opinion while firm’s value is measured by P/E, P/B, and Tobin’s Q. In
addition to independent and dependent variables, this research introduces two control
variables, which is firm size and firm age