scholarly journals Determinants of Audit Quality in Indonesia Supreme Audit Institution: A Conceptual Study

2020 ◽  
Vol 12 (2(I)) ◽  
pp. 38-41
Author(s):  
Khoirul Aswar ◽  
Fahmi Givari Akbar ◽  
Noegrahini Lastiningsih
Keyword(s):  
Attribution Theory ◽  
Audit Quality ◽  
Public Institution ◽  
Audit Process ◽  
Internal Auditor ◽  
Internal Auditors ◽  
Audit Failure ◽  
The Public ◽  
Audit Firms

This research is based on the problem of poor audit practices by the Big Four audit firms and the mid-tier audit firms in UK in 2018/2019 cycle, which is indicated as audit failure. This resulted in sanctions and fines that increased significantly from the previous year. Problems related to audit quality are also experienced by government internal auditors in Indonesia. This is due to several factors such as the quality of government internal auditor resources that are still below the lowest service standards as a public institution, lack of available apparatus and low competency, and limited budget. The purposes of this study are to determine the extent of audit quality produced by government internal auditors at the Principal Inspectorate of Indonesia’s Supreme Audit Institution. Based on attribution theory, this study has several objectives, namely to determine the effect of competence, independence, and motivation on audit quality. Therefore, the contribution of this research can be the object of consideration and evaluation for Indonesia’s Supreme Audit Institution auditors regarding the audit process and audit results in the public or government sector, an information for Principal Inspectorate of Indonesia’s Supreme Audit Institution as an effort to maintain and improve the quality of government internal audits, and an information for the public in overseeing the audit quality of the management and responsibility of state finances.

scholarly journals Kompensasi, Independensi, Profesionalisme dan Etika Profesi Internal Auditor terhadap Kualitas Audit di Inspektorat Jenderal Kementerian Ketenagakerjaan

1970 ◽  
Vol 3 (02) ◽  
pp. 199-210
Author(s):  
Aulia Saputra ◽  
Dwi Setiawan Susanto
Keyword(s):  
Regression Analysis ◽  
Professional Ethics ◽  
Audit Quality ◽  
Jel Classification ◽  
Primary Data ◽  
Coefficient Of Determination ◽  
Test Results ◽  
Internal Auditor ◽  
Internal Auditors

A B S T R A C T The purpose of this study was to determine and analyze the influence of competence, independence, professionalism and professional ethics of internal auditors to audit the quality of the Inspectorate General of Ministry of Manpower. The data used in this study are primary data obtained through questionnaires distributed to 60 auditors at the Inspectorate I until IV . Tests carried out by the analysis of data using SPSS regression. Based on the test results coefficient of determination, it is known that the competence, independence, professionalism and ethics of auditors affect audit quality by 84,6 %, while the remaining 15,4% is influenced by other factors. Meanwhile, regression analysis and hypothesis testing showed that the competence, independence, professionalism and ethics of the profession have a significant effect on audit quality either partially or simultaneously. A B S T R A K Tujuan dari penelitian ini adalah untuk mengetahui dan menganalisis bagaimana pengaruh kompetensi, independensi, profesionalisme dan etika profesi internal auditor terhadap kualitas audit pada Inspektorat Jenderal Kementerian Ketenagakerjaan RI. Data yang digunakan dalam penelitian ini adalah data primer yang diperoleh melalui kuisioner yang disebarkan kepada 60 auditor pada Inspektorat I s.d. IV. Pengujian data dilakukan dengan analsis regresi menggunakan aplikasi SPSS. Berdasarkan hasil uji koefesien determinasi, diketahui bahwa kompetensi, independensi, profesionalisme dan etika auditor mempengaruhi kualitas audit sebesar 84,6%, sedangkan sisanya sebesar 15,4% dipengaruhi oleh faktor lain. Sementara itu, Hasil analisis regresi dan uji hipotesis menunjukkan bahwa kompetensi, independensi, profesionalisme dan etika profesi memiliki pengaruh yang signifikan terhadap kualitas audit baik secara parsial maupun secara simultan. JEL Classification: H83

Implications of the Audit Oversight Board: External Auditors’ Perspective

2015 ◽  
Vol 2 (3) ◽  
pp. 1-4
Author(s):  
Mazlina Mustapha ◽  
Foong Sook Hwa
Keyword(s):  
Internal Audit ◽  
Financial Statements ◽  
Internal Auditors ◽  
Face To Face ◽  
External Auditors ◽  
The Public ◽  
Training Costs ◽  
Audit Firms ◽  
And Training

The purpose of Audit Oversight Board (AOB) is to oversee the external auditors who audit the listed companies. Its establishment is expected to improve the quality of the audited financial statements and to increase the confidence of the public on the quality of the services provided by the auditors. This study explores how the establishment of audit oversight board affects the auditors in Malaysia. As the study is exploratory in nature with limited studies being carried out on AOB, face-to-face interviews were conducted with the external auditors. The findings show that the establishment of AOB affects the job of external auditors, especially on the documentation and training costs, which vary across audit firms of different sizes. There are opinions that the increased pressure on the external auditors is not solely due to the establishment of AOB, but it is also due to the revised accounting standards and other regulations. The study also finds that the external auditors’ reliance on the internal auditors is not affected by the establishment of AOB. In addition, regardless of whether the internal audit department is in-house or outsourced, it will not affect the reliance of external auditors on the internal auditors work.

Internal audit quality: perceptions of Tunisian internal auditors an explanatory research

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aida Krichene ◽  
Emna Baklouti
Keyword(s):  
Audit Quality ◽  
Internal Audit ◽  
Access To Information ◽  
Quality Model ◽  
Internal Auditor ◽  
Content Type ◽  
Internal Auditors ◽  
External Auditor ◽  
The Relationship

Purpose The purpose of this study is to understand how internal auditors perceive the internal audit quality and to highlight the different profiles of internal auditors based on their perception of internal audit quality determinants. Design/methodology/approach The authors’ methodological approach is based on the submission of a self-administered questionnaire. The final sample consists of 104 internal auditors. The first stage of the study is in the lead of a certified public accountants (CPA), which highlights seven factors of the internal audit quality. The second step is a confirmatory factor analysis (CFA) that allowed the authors to validate the model proposed by the CPA. Finally, the authors carry out a typological analysis of the auditors according to their way of perceiving the factors extracted by the CPA. Findings The authors’ model, validated by the CFA, shows that the knowledge of the internal auditor, the independence of reporting, compliance with professional standards of internal audit, the relationship with the external auditor, the personal relationship of the internal auditor, the access to information and the field of intervention of the internal auditor have a positive association with the internal audit quality but with a different degree of significance. For example, the field of intervention of the internal auditor and the access to information explain better the internal audit quality. However, the knowledge of the internal auditor and the relationship with the external auditor are not significant to explain the internal audit quality. From the hierarchical cluster analysis, four groups of internal auditors emerged: the autonomous, the perfectionists, the rigorous ones and the objectives. Originality/value In offering these findings, the paper contributes to the existing internal audit literature by introducing evidence from an emerging country, namely, Tunisia, of the internal audit quality model. In addition, the authors proposed a new measure to the internal audit quality model which is the use of the work of the internal auditor by the external auditor. This study is also interesting to managers and professional internal audit organizations in recognizing the characteristics of the quality of the internal audit and advance reflections on the effectiveness of internal audit practices. The authors’ study proposes a typology of certified internal auditors through their perceptions of the quality of the internal audit while taking into account the specificities of the Tunisian audit market. This provides insights to managers and audit committees on the measures necessary to ensure the relevance of the internal audit work within their companies.

scholarly journals Pengaruh Kompetensi, Independensi, dan Profesionalisme Auditor Internal Terhadap Kualitas Audit

2018 ◽  
Vol 16 (2) ◽  
pp. 171
Author(s):  
Naomi Olivia Haryanto ◽  
Clara Susilawati
Keyword(s):  
Decision Making ◽  
Sampling Method ◽  
Audit Quality ◽  
Corporate Sustainability ◽  
Financial Statements ◽  
Internal Controls ◽  
Internal Auditor ◽  
Purposive Sampling ◽  
Internal Auditors

The financial statements are used as consideration in decision making for the management of the company. Internal auditor's role is important for corporate sustainability. This is because internal audits are required as internal controls. Then the quality of the resulting audit depends on the competence, independence and also the auditor's own professionalism. The purpose of this study is to test empirically the influence of competence, independence and professionalisme internal auditors on audit quality in Semarang manufacturing company. Sampling method used is purposive sampling. The results showed that there is influence of competence, independence and professionalism on audit quality. Abstrak Laporan keuangan digunakan sebagai pertimbangan dalam pengambilan keputusan untuk pihak manajemen perusahaan. Peran internal auditor penting bagi keberlanjutan perusahaan. Hal tersebut dikarenakan audit internal diperlukan sebagai pengendalian internal.Maka kualitas audit yang dihasilkan bergantung dari kompetensi, independensi dan juga profesionalisme auditor itu sendiri. Tujuan penelitian ini adalah untuk menguji secara empiris pengaruh kompetensi, independensi dan profesioanlisme auditor internal terhadap kualitas audit di perusahaan manufaktur Semarang. Metoda penentuan sampel yang digunakan adalah purposive sampling. Hasil penelitian menunjukkan bahwa terdapat pengaruh kompetensi, independensi dan profesionalisme terhadap kualitas audit

scholarly journals MODEL PENGUKURAN KUALITAS AUDIT INTERNAL

2017 ◽  
Vol 17 (3) ◽  
pp. 299
Author(s):  
Ida Rosnidah
Keyword(s):  
Audit Quality ◽  
Internal Audit ◽  
Measurement Model ◽  
Primary Data ◽  
Private Companies ◽  
Internal Auditor ◽  
Internal Auditors ◽  
State Enterprises

Internal auditor’s independence is sometimes in doubt. This makes sense because the internal auditor is an integrated part of the organization. As a part of the organization, the internal auditor has a role to audited financial statements, give some suggestions and recommendations that can be used as the basis for making some decisions in the future. The lower of internal auditor’s independence has an impact audit quality, that can make the role of internal auditor degrade. So, the quality of internal auditor still becomes an important issue until  now. The purpose of this study is to establish a measurement model of internal audit quality based on the influencing factors not only independence, but also competence, professionalism and motivation. This study uses primary data by distributing questionnaires spread to 60 internal auditors who work  in  inspectorate, private companies, state enterprises (BUMN) and local government enterprises (BUMD) in Cirebon District and Municipalities. Data analysis method used is single stage multivariate model among variables/pathway analysis. The results show that the competence, independence, professionalism and motivation affect the quality of internal audit either partially or simultaneously, and competence contributes the most to the quality of the internal audit. Thus, this research model can be used to measure the quality of internal audit.

scholarly journals An analysis of auditors’ perceptions towards artificial intelligence and its contribution to audit quality

Accounting ◽  
2021 ◽  
pp. 755-762 ◽  
Author(s):  
Ibrahim Albawwat ◽  
Yaser Al Frijat
Keyword(s):  
Artificial Intelligence ◽  
Audit Quality ◽  
Descriptive Study ◽  
Ease Of Use ◽  
Perceived Ease Of Use ◽  
Audit Process ◽  
Online Questionnaire ◽  
Audit Firms ◽  
Significant Difference

Artificial intelligence (AI) systems have significantly changed the audit process; nevertheless, the AI revolution opponents view this growth as a step-back as many auditors will fail to adapt to this new environment and will drop behind. Our descriptive study examines the perceived ease of use, usefulness, and contribution to the audit quality of different AI’s types. To address local audit firms concerns about their readiness to use AI systems in auditing processes and to advance auditing research, we examine whether perceived ease of use, usefulness, and contribution to audit quality vary by AI systems type (Assisted, Augmented, and Autonomous). An online questionnaire was used to collect data from 124 auditors representing local audit firms in Jordan. Our results indicate that auditors perceive Assisted and Augmented AI systems as ease of use in auditing while perceiving Autonomous AI systems as complicated to use. Besides, Auditors are underestimating Autonomous AI systems’ capabilities and perceived it as not useful for auditing. The results also reveal a significant difference between the perceived contribution to audit quality by the three AI systems types. This study contributes to the existing literature on AI and auditing by developing and testing a measure for AI systems’ perceived contribution to audit quality. This study also provides empirical evidence on how Jordan local firms auditors perceive AI use in auditing.

scholarly journals PERANAN KOMITMEN PROFESI AKUNTAN DALAM MEMODERASI PENGARUH CLIENT IMPORTANCE PADA KUALITAS AUDIT

2019 ◽  
Vol 4 (1) ◽  
Author(s):  
Sunitha Devi ◽  
Luh Gede Kusuma Dewi ◽  
Putu Eka Dianita Marvilianti Dewi
Keyword(s):  
Sampling Method ◽  
Audit Quality ◽  
Code Of Ethics ◽  
Sample Selection ◽  
Primary Data ◽  
Audit Process ◽  
Accounting Profession ◽  
Accounting Firm ◽  
The Public

This research was done in purpose of finding out empirical evidences about theeffects of client importance towards the audit quality, dan the commitment ability of the accounting profession in weakening the influence of client importance on audit quality. The research sample that returned the results of questionnaires is 36 auditors from a total of 65 auditors working in the Public Accounting Firm (KAP) in 2018. The sample selection was done using the purposive sampling method. The data sources used in this study are primary data. Primary data is obtained by using a questionnaire that has been structured in order to collect information from the auditor as the respondent in this study. MRA model analysis was applied to analyze the data. The data analysis support the hypothesis: (1) client importance has negative dan significant effect towards the audit quality, dan (2) commitment of the accounting profession was able to moderate the influence of client importance on audit quality. The results of this study can be used as reference material for KAP leaders in evaluating dan performing more strict supervision on the implementation of professional commitment of auditors when conducting audit process, because the existence of KAP depends on the quality of audits that can affect public trust. Regulators can also make very strict rules dan sanctions related to violations of the accounting code of ethics dan violations of the audit process so that they can cause deterrent effects for the perpetrators dan can be used as learning for other auditors so as not to violate these rules.

Risky Business: Assessing the Generalizability of the PCAOB's Risk-Based Inspection Reports for Annually Inspected Audit Firms

2020 ◽  
Vol 39 (2) ◽  
pp. 117-138
Author(s):  
Jared Eutsler
Keyword(s):  
Audit Quality ◽  
Selection Model ◽  
Data Availability ◽  
Relevant Feedback ◽  
The Public ◽  
Audit Firms ◽  
Incremental Information ◽  
Inspection Process ◽  
Risky Business

SUMMARY Existing research has found that the PCAOB inspection results of small (triennially inspected) audit firms provide incremental information about audit quality, but research has not documented a similar finding for large (annually inspected) firms. I examine the generalizability of annually inspected firms' inspection findings to audit quality by investigating the association between account-specific findings and account-specific audit quality while controlling for the PCAOB's risk-based program. First, I create a selection model to approximate the risk-based inspection process. I then use its outputs to control for selection risk while examining the association between revenue-specific deficiencies and the audit quality of revenues. I find that after controlling for selection risk, revenue-specific deficiencies are generalizable to the audit quality of revenues for clients that are more likely to be inspected. These results provide some evidence that the PCAOB's inspection program is meeting its objective of providing relevant feedback to stakeholders about audit quality. Data Availability: Data are available from the public sources described in this text.

scholarly journals What do You Know About Audit Quality in Malaysian Small and Medium Audit Firms?

2021 ◽  
Vol 16 (3) ◽  
pp. 383-407
Author(s):  
Nur Amira Rodzi ◽  
◽  
Aida Hazlin Ismail ◽  
Keyword(s):  
Attribution Theory ◽  
Audit Quality ◽  
Primary Data ◽  
Management Support ◽  
External Auditors ◽  
Top Management Support ◽  
The Public ◽  
Audit Firms ◽  
Klang Valley ◽  
The Relationship

Audit quality has been addressed and is being discussed globally, throughout the years. The Enron Corporation and WorldCom cases have affected the reputation of the audit profession. The credibility of auditors also has become more questionable as the auditors' function in identifying mistakes and fraud is being debated by the public. However, the issue of audit quality has only focused on big firms only. There is shortage of studies that focussed on audit quality in small and medium audit firms. In line with this issue, this study aimed to investigate the relationship between top management support, auditor’s experience and auditor’s accountability on audit quality amongst small-medium audit firms in Malaysia. By employing the Attribution Theory, the study utilised purposive sampling. The data used in this study was primary data obtained through questionnaires from external auditors in small and medium sized audit firms around Klang Valley. A total of 100 questionnaires were distributed and the number of usable questionnaires was 81. Findings indicate that auditor’s experience and auditor’s accountability have a significant effect on audit quality. This research thus contributes to standard setters, regulators, policymakers and other audit firms by providing evidence with regard to the determinants of audit quality judgment in Malaysian small and medium audit firms. Keywords: audit quality, small and medium audit firms, audit judgments, accountability, audit experience

The Impact of PCAOB Auditing Standard No. 5, the PCAOB Inspection Regime, and the Great Recession on Audit Fees and Audit Quality

2020 ◽  
pp. 0148558X2098220
Author(s):  
Elizabeth S. Johnson ◽  
Kenneth J. Reichelt ◽  
Jared S. Soileau
Keyword(s):  
Great Recession ◽  
Audit Quality ◽  
Audit Fees ◽  
The Public ◽  
The Great Recession ◽  
Audit Firms ◽  
Public Company ◽  
Audit Approach ◽  
The Impact

We investigate the coinciding effects of the implementation of Auditing Standard No. 5 (AS5), the change in the Public Company Accounting Oversight Board’s (PCAOB) inspection regime, and the Great Recession on the audit fees and audit quality of accelerated filers. AS5 took effect in November 2007 and promulgated a top-down, risk-based audit approach to SOX 404(b) audits of accelerated filers. Concurrently, the PCAOB adopted a stricter approach to its inspections of audit firms, which encouraged them to improve audit quality and reduce audit fees. Moreover, the Great Recession pressured audit firms to reduce fees. We find that, following the three events, audit fees decreased and quality increased for accelerated filers. We also find that audit fees and audit quality increased for non-accelerated filers, although these filers were not directly affected by AS5.

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