Abstract
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.
Highlights
Public sector or government audit is a form of accountability for the government to the public regarding the management of state finances and as a guarantee for the implementation of good governance
Performance Report of Financial and Development Supervisory Agency (FDSA) 2017/2018 revealed that the quality of the government's internal auditor resources is still below the lowest service standard as a public institution with the following details: 33.6% are still at level 1, 43.1% are at level 2, and only 23.3% are at level 3
This paper focuses on a conceptual model which will form the basis of un-coming studies in exploring audit quality with a focus on government internal auditor at the Principal Inspectorate of Indonesia’s Supreme Audit Institution
Summary
Public sector or government audit is a form of accountability for the government to the public regarding the management of state finances and as a guarantee for the implementation of good governance. The audited financial statements can be an information for the public in overseeing the audit quality of the, management and responsibility of state finances. In Indonesia, there are a number of cases involved Indonesia’s Supreme Audit Institution auditors. The case of bribery to the Indonesia’s Supreme Audit Institution auditors for Examination with Specific Purposes to change the amounts of financial findings of PT Jasa Marga in 2016, which was initially around Rp 13 billion to Rp 842.9 million. Indonesia’s Supreme Audit Institution auditors and Village Ministry officials including the Inspector General who are involved in bribery cases to provide an unqualified opinion on the 2016 financial statements (Tirto.id, 2019). Performance Report of Financial and Development Supervisory Agency (FDSA) 2017/2018 revealed that the quality of the government's internal auditor resources is still below the lowest service standard as a public institution with the following details: 33.6% are still at level 1, 43.1% are at level 2, and only 23.3% are at level 3
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