Client Pressures, Audit Tenure to Audit Quality: Moderation of Auditor Independence

Muslim Muslim,Muhammad Faisal Arpelu,Hamzah Ahmad,Syamsuri Rahim

doi:10.21107/jaffa.v8i2.8349

Muslim Muslim, Muhammad Faisal Arpelu + Show 2 more

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https://doi.org/10.21107/jaffa.v8i2.8349

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Abstract

This study aims to examine the effect of client pressure and audit tenure on audit quality with auditor independence as a moderating variable in the Public Accounting Firm (KAP) in Makassar. The data in this study were obtained from each KAP in Makassar City who were willing to become respondents. This study uses primary data by conducting direct research in the field by providing questionnaires/question sheets to 45 respondents. The data analysis method used is moderated regression analysis (MRA). The results showed that client pressure had a positive and significant effect on audit quality. While the audit tenure variable has a negative and significant effect on audit quality. Auditor independence variable is a moderating variable that affects client pressure and audit quality

Highlights

Financial statements presented by the company's management are a reflection of the company's financial condition as well as a form of accountability report on the performance of the company's management work as a manager to the owner of the company (Muslim et al, 2018)
The level of respondents used started from senior auditors, supervisors, managers, senior managers and partners who had worked at public accounting firms (KAP)
The tolerance number of 3 independent variables (Client Pressure, Audit Tenure, and Auditor Independence) has a tolerance value of more than 0.10 and the calculation result of the Variance Inflation Factor (VIF) value calculation shows the same result, none of the independent variables have a VIF value of more than 10 so it can be concluded that this regression model does not occur multicollinearity

Summary

Introduction

Financial statements presented by the company's management are a reflection of the company's financial condition as well as a form of accountability report on the performance of the company's management work as a manager to the owner of the company (Muslim et al, 2018). The interest between the owner and the management of the company to maximize his/her personal interests has the potential to trigger information contained in the financial statements incompatible with the company's actual condition. Stakeholders as decision makers certainly expect quality information without the influence of the personal interests of the company owner and the management of the company as the manager. The role of public accountants to mediate such different interests as an independent party is heavily important (Lee, 1993; Abdillah & Sabeni, 2013) which is to give an assessment and statement of opinion on the fairness of the financial statements presented. An independent auditor is one of the deciding factors to produce a fair assessment of financial statements good quality. Different conditions are felt by public accounting firms that have few clients because they are very vulnerable to pressure from clients

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