Audit Profession Research Articles

The Effect of Auditor Experience, Client Business Understanding, and Auditor Professional Skepticism on Fraud Detection Ability

The Effect of Auditor Experience, Client Business Understanding, and Auditor Professional Skepticism on Fraud Detection Ability

The Influence of Labor Market Power in the Audit Profession

ABSTRACT This paper examines the influence of labor market power in the audit profession. Using a dataset of online job postings, we confirm that audit offices in more concentrated labor markets have greater labor market power and exercise it in the form of higher skill requirements and greater required effort from their auditors, at similar or slightly lower wages. We then show that client firms of audit offices in more concentrated labor markets are less likely to restate their earnings and have lower absolute discretionary accruals. These findings are only present when employees have lower mobility across professions and geographies, consistent with audit offices’ power in the local labor market explaining the results. Collectively, our findings highlight the importance of labor market power in understanding audit quality. Data Availability: Data are available from the sources cited in the text. JEL Classifications: J31; J40; J42; M42; M55.

The impact of remote auditing on audit quality: the moderating role of technology readiness

PurposeThis study aims to investigate the impact of remote auditing on audit quality and explore the moderating role of both the client’s and the audit firm’s technology readiness in this interaction.Design/methodology/approachData was collected through a questionnaire survey distributed to 360 audit professionals in Jordan, resulting in 208 valid responses. The data was analysed using SmartPLS – structural equation modelling.FindingsThe results showed that remote auditing significantly and positively affect audit quality. This study found that the technology readiness of both the audit firm and the client greatly influences audit quality. Notably, the technology readiness of the client positively enhances the relationship between remote auditing and audit quality, while the technology readiness of the audit firm does not play such a role.Practical implicationsThe findings are of value to policymakers in terms of the positive impact of remote auditing on audit quality, and the role of technology readiness in this regard. In particular, they allow policymakers and regulators of audit profession to make informed and relevant decisions pertaining to the adoption of remote auditing. The findings also indicate the significance for audit firms and business institutions to pay special attention to developing their technology capabilities to keep abreast of rapid technology advancements, ensuring the maximum benefits for auditing profession, thereby enhancing their efficiency and effectiveness.Originality/valueThe importance of this study lies in its unique contribution to bridging the research gap related to understanding the pivotal role of technology readiness in enhancing the relationship between the use of remote auditing and the achievement of high audit quality.

Determinants of job satisfaction among employees at the Ministry of Religious Affairs Office in Palembang

Purpose: The purpose of this resource is to determine The Influence of Competence, Independence, and Professionalism of Government Internal Auditors on Audit Quality at the Representative Offices of the Financial and Development Supervisory Agency (BPKP) of South Sulawesi Province. Research methodology: The variables in this study are competence (X1), independence (X2), professionalism (X3), and Audit Quality (Y). The study sample comprised of 40 respondents. The research carried out in this study was quantitative, using primary data. The data collection technique used in this study was a questionnaire. The study population included all internal auditors at the Representative Office of the Financial and Development Supervisory Agency (BPKP) of South Sulawesi Province. The samples used in this study were selected using random sampling. Data analysis was conducted using descriptive statistical analysis, normality test, linearity test, multicollinearity test, heteroscedasticity test, multiple regression analysis test, R Square test, t statistical test, and F statistical test. Results: The results of the research partially show that competence and professionalism have positive and significant effects on audit quality, while independence has positive and insignificant effects on audit quality. Simultaneously, the competence, independence, and professionalism of government internal auditors have a positive and significant effect on audit quality at the Representative Offices of the Financial and Development Supervisory Agency (BPKP) of South Sulawesi Province.

Audit firms’ corporate social responsibility activities and auditor reputation

Professional audit firms increasingly engage in Corporate Social Responsibility (CSR) activities. This paper examines the effect of audit firms' CSR activities on auditors’ reputation. We find that audit firms that engage in CSR experience an increase in the size of their client base compared to audit firms that do not engage in CSR. The effect is stronger for audit firms without existing reputation from a Big 4 brand name or industry specialization. We also find that clients that value CSR are more likely to hire audit firms that engage in CSR. Overall, our results suggest that CSR is an effective tool for audit firms to build their reputation in the marketplace.

Pengaruh Profesionalisme dan Akuntabilitas terhadap Kualitas Audit (Studi Literature Review)

The objective of this study is to examine how auditor professionalism and accountability impact audit quality through a literature review employing a qualitative methodology. Data were gathered from five national journals sourced from Google Scholar and scrutinized for data processing. The analytical process aimed to derive conclusions from the test outcomes to assess the influence of professionalism and accountability on audit quality. In general, most research findings support a positive correlation between auditor professionalism and audit quality, though several studies suggest variations indicating that professionalism may not consistently enhance audit quality. It is widely recognized that accountability generally contributes positively to audit quality, despite discrepancies found in certain studies.

Faktor-faktor yang mempengaruhi Kinerja Auditor: Profesionalisme, Kompetensi Auditor dan Independensi Auditor

Good audit performance will enable the accounting firm to achieve its objectives and meet the financial reporting needs of stakeholders. Auditors must be skilled to maintain the trust of clients and other users of the audit financial statements. Auditor training improves the auditor's ability to carry out his work during the audit process.The central questions of this article are: (1) Whether auditor ability, auditor professionalism, and auditor independence have an impact on performance. (2) Further review of previous articles, which are still found to be inconsistent. The hope is that this research will contribute new thoughts to the development of audit theory by reviewing aspects of auditor independence, professionalism, and competence in the context of their performance.The purpose of writing this article is to establish hypotheses of influence between variables in further research.The findings of this literature review article are: 1) Auditor competence affects auditor performance; 2) Professionalism has an effect on auditor performance; 3) Auditor independence has an effect on auditor performance.

The Effect of Audit Fees and Auditor Professionalism on Audit Quality with Remote Auditing as A Mediating Variable (Empirical Study of Auditors in the Province of Banten 2022-2023)

The study aims to determine the effect audit fees and auditor professionalism on audit quality with remote auditing as a mediating variable. This research method uses quantitative methods. This research uses primary data by collecting data using a questionnaire. The sample of this research are auditors who work in Public Accounting Firms Banten Province. The sample technique used in this research is Purposive Sampling method with a total sample of 50 research data. The data analysis technique for this study used multiple regression analysis with Statistical Package For the Social Sciences Software (SPSS v27) and Path Analysis with the help of an online Spbel Calculator. The result of this study prove that audit fees have a significant positive effect on audit quality, auditor professionalism has a positive effect on audit quality, remote audits have a negative effect on audit quality, audit fees have a positive effect on remote audits, and auditor professionalism has a positive effect on remote audits. Behind that, remote audits are not able to act as a mediator on the effect of audit fees on audit quality. But, remote audits is able to act as a mediator on the effect of auditor professionalism on audit quality.

The Influence of Auditor Professionalism, Independence, and Ethics on External Audit Quality

The Influence of Auditor Professionalism, Independence, and Ethics on External Audit Quality

TURKISH COURT OF ACCOUNTS: ANALYZING FINANCIAL AUDIT, DIGITALIZATION, AI IMPACT

Countries’ audit institutions play a critical role in financial management and accountability. These institutions perform tasks such as financial accountability, detection of corruption and errors, evaluation of government performance, accountable public administration, transparency and legal oversight, and prevention of legal violations, contributing to public trust. The Court of Accounts Presidency is the supreme audit institution of the Republic of Türkiye. This study sequentially addresses the audit process and procedure of the Court of Accounts, the impact of digitization, information technologies, and artificial intelligence on the audit process. Additionally, an evaluation of the institution’s technology and information infrastructure is conducted. A detailed assessment is presented regarding the Court of Accounts’ use of the Court of Accounts Data Analysis System (VERA), Unified Data Transfer System (BVAS), and Audit Management Program (SayCap). The institution’s technology and information infrastructure related to big data and big data analytics are evaluated based on the institution’s reports and documents. Finally, evaluating the potential integration of artificial intelligence into these systems is considered highly beneficial. For human resources in the field to be more proficient in current technologies, implementing artificial intelligence, big data, and big data analytics in the audit domain of public institutions is seen as highly advantageous. Additionally, it is strongly recommended that educational institutions training audit professionals incorporate courses on data analytics, big data, big data analytics, machine learning, and artificial intelligence into their curricula.

The Role of Professionalism, Auditor’s Experience, and Independence in Improving the Quality of Audit Results: Empirical Study on The Government Internal Monitoring Apparatus ITJEN Kemendikbudristek

The Government Internal Monitoring Apparatus is an important part of government management to realize good governance. This research aims to carry out analysis through the stages of identifying, reviewing, and proving hypotheses, as well as finding variables that influence the quality of audit results. The research method used is a mixed parallel convergent method. This research analyzes data through two analyses: quantitative and qualitative analysis, quantitative data was collected through questionnaires from 201 ITJEN Kemendikbudristek auditors. while qualitative data was obtained through interviews and observation. The analysis technique uses SPSS 26.0, Amos 5, and QSR NVivo 20.2 software. Research results from the quantitative analysis show that the level of professionalism, experience, independence, and quality of audit results at ITJEN Kemendikbudristek is in the sufficient category. The causal relationship between professionalism, experience, independence, and the quality of audit results is not significantly strengthened by the existence of the working time moderating variable. The model with the moderating variable produces a fit model. Likewise, the proposed model without the moderating variable produces a fit model. A model that can not only interpret samples but also interpret the population as a whole. The model without the moderating variable has a much more effective model, namely 15.2%, compared to the model with working time with a model effectiveness level of 15.1%. The research results from the qualitative analysis show that the level of professionalism, experience, independence, and quality of audit results at ITJEN Kemendikbudristek is in the sufficient category. These results are in line with the results of quantitative analysis using arithmetic average calculations. For this reason, increasing the professionalism, experience, and independence of auditors, which is currently considered sufficient, will further improve the quality of audit results when the level of professionalism, experience, and independence increases.

Framework for Integrating Generative AI in Developing Competencies for Accounting and Audit Professionals

The study aims to identify the knowledge, skills and competencies required by accounting and auditing (AA) professionals in the context of integrating disruptive Generative Artificial Intelligence (GenAI) technologies and to develop a framework for integrating GenAI capabilities into organisational systems, harnessing its potential to revolutionise lifelong learning and skills development and to assist day-to-day operations and decision-making. Through a systematic literature review, 103 papers were analysed, to outline, in the current business ecosystem, the competencies’ demand generated by AI adoption and, in particular, GenAI and its associated risks, thus contributing to the body of knowledge in underexplored research areas. Positioned at the confluence of accounting, auditing and GenAI, the paper introduces a meaningful overview of knowledge in the areas of effective data analysis, interpretation of findings, risk awareness and risk management. It emphasizes and reshapes the role of required skills for accounting and auditing professionals in discovering the true potential of GenAI and adopting it accordingly. The study introduces a new LLM-based system model that can enhance its GenAI capabilities through collaboration with similar systems and provides an explanatory scenario to illustrate its applicability in the accounting and audit area.

Remote Audit Quality, Audit Efficiency, and Auditors’ Job Satisfaction: Implications for Audit Firms and External Auditors

SUMMARY In the aftermath of the COVID-19 pandemic, remote and hybrid audits have become institutionalized in the external audit profession. However, the impact of remote/hybrid audits on audit success (i.e., audit quality, audit efficiency, and auditor job satisfaction) is not clearly understood. Recruiting external auditors (including audit associates, audit seniors, audit managers, and audit partners) with an average of three to five years of auditing experience, Li, Goel, and Williams (2023) found that working remotely is associated with high audit efficiency. They also found that in comparison to on-site audits, remote audits show increases in technology reliance, professional skepticism, workload, fatigue and frustration, risk-seeking attitudes, and team monitoring rigidity and decreases in auditor–client communication and cooperation efficiency. Furthermore, Li et al. (2023) identified situational and dispositional factors that become critical in remote/hybrid audits. We summarize the key findings of their paper and provide actionable suggestions for audit practitioners. Data Availability: Data are available upon request. JEL Classifications: M42.

Pengaruh Etika Audit dan Motivasi Terhadap Keputusan Strategis Internal Auditor

This research investigates the impact of audit ethics and motivation on the strategic decisions made by internal auditors. Utilizing a multiple linear regression analysis, the study focuses on a population comprising auditors from 23 Regency/City Inspectorates in Aceh Province, with a sample size of 64 individuals. The findings reveal a significant positive influence of both audit ethics and motivation on internal auditors' strategic decisions. This suggests that heightened levels of audit ethics and motivation are associated with more favorable strategic decision-making by internal auditors. The implications of these results highlight the importance of fostering an ethical culture and motivation within the audit profession. However, it is crucial to acknowledge the limitations of the study, and further research is recommended to explore additional variables and enhance the generalizability of the findings.

Literature Review : Audit Internal 5.0: Mengarungi Era Digital Dengan Tranformasi Berbasis Kecerdasan Buatan dan Internet Of Things

This research aims to identify the role of internal auditors, accountability, transparency, and how technology can be used to improve the effectiveness, benefits and risks of internal audits. The extent to which technology changes, artificial intelligence, and the tools offered by these technologies will impact the future of internal audit. This research method uses qualitative data collection methods, using literature observations carried out by researchers and practitioners. This research was carried out using the LR (Literature Review) method, which was carried out in several stages: First, the author researched journals using keywords such as 'Digital Technology', 'Artificial Intelligence', 'Internet of Things'. “Internal Control” and “Internal Audit” The author has conducted research using electronic databases such as Google Scholar, Semantic Scholar, Scopus, Publish Or Perish, Scispace and many other websites. This research is an important tool that provides information about technological changes and technical intelligence that are critical to the future of the audit profession and offers various suggestions for improving the efficiency and effectiveness of audit professionals' work. Therefore, this study suggests future research to investigate changes and increase knowledge.

Audit Expectation Gap: A Bibliometric Analysis Based on Scopus And WoS Data (1992-2024)

In this study, the concept of the expectation gap (AEG), which is thought to be at the center of the criticism towards the audit profession, is discussed. The AEG can be explained as the difference between the performances and expectations of the parties to the audit. The aim of the study is to examine the current status and global trends of AEG scientific publications in Scopus and Web of Science databases with bibliometric analysis. For this purpose, in the search conducted with the keyword "Audit Expectation Gap" in both databases, 117 publications covering the years 1992-2024 were evaluated comparatively. The data were analysed by using Excel and VOSviewer programs. The findings show that approximately 40 per cent of AEG research has been conducted in the last five years. The leading countries are the United Kingdom, Australia, Malaysia and Iran. The most productive authors are Humphrey, C., Coram, P. J. and Lee, T.H. The common keywords that stand out are auditing, auditors, auditor’s report, key audit matters and audit quality. The overlap rate of the databases is 35% and the coverage of Scopus was found to be wider. To the best of the author’s knowledge, this is the first study to evaluate the effects/interactions of AEG research in terms of both databases. Keywords: Audit, Expectation Gap, Bibliometric Analysis, Scopus, WoS, VOSviewer JEL Codes: M42, C88

THE PSYCHOLOGY AND SOCIOLOGY OF A FRAUDSTER: IMPLICATIONS FOR TODAY ACCOUNTING PROFESSION

The study examines the Psychology and sociology of a fraudster: Implications for today accounting profession. The investigation was guided by three questions and a hypothesis. The study employed a survey research approach, and the 274 auditing businesses in Nigeria's South-South geopolitical zone comprised the study's population., the Taro Yamane was uses to determine the sample of the study and Spearman rank correlation was used to analyse the data. Results from the research reveal that there was a correlation in capability (r= 0.121 p< 0.05), lifestyle (r= 0.561 p< 0.05 and environment (r= 0.108 p< 0.05) and the psycho-social behaviour of the perpetrator of fraud. The implication was that the professional auditors should apply professional scepticism and exercising due care in engaging their work for better delivery and discharge of their duties, as this will lead to the detection of fraud and the reporting of red flags that are of material misstatement. The study recommended that an active, strong and proper supervision of internal control system will put to serious check the action of fraudulent activities.

The Influence of Experience, Competence, Motivation, Professional Skepticism of Auditors on the Quality of BPKP Supervision (Study at BPKP North Sumatra Province)

The supervision quality produced by the Financial and Development Supervisory Agency in Indonesia still needs to be improved, as evidenced by the trend of corruption cases from 2019 to 2020. This research aims to test and analyze the impact of various factors such as Experience, Competence, Motivation, and Auditor Professional Skepticism on Supervision Quality. This research uses quantitative descriptive methods. The population in this study were all BPKP auditors in North Sumatra Province. The research sample consisted of 100 BPKP auditors from North Sumatra Province. Data collection was carried out through distributing questionnaires and data analysis using the SmartPLS application. Research findings show that the Auditor’s Experience, Motivation, and Auditor Professional Skepticism positively affect the Supervision quality. Apart from that, competency does not affect the quality of supervision.

The effect of audit training in universities on the audit expectation gap

The audit expectation gap (AEG) is a phenomenon where there is a difference between what people expect of auditors and what they can do. This research was conducted in 2023 with 336 university students in Vietnam to assess the effect of university training on the AEG related to auditors' responsibilities. The reliability of the scale and the average difference between student groups were tested using SPSS 29 software. The results showed that AEG exists among accounting students who have studied auditing subjects. Most of these students have higher expectations than other students. This study also revealed that the university's auditing program and auditing courses effectively narrowed the AEG to two in nine auditor's responsibilities and one in nine auditor's responsibilities, respectively. However, it is important to note that these changes were only cognitive. Students still expect auditors to fulfill crucial responsibilities such as detecting fraud, predicting bankruptcy, evaluating ongoing operations and serving as the "family doctor" of the enterprise. Therefore, training for students can help narrow the AEG about certain audit responsibilities. A better approach is to strengthen the responsibility and authority of auditors. The future of the audit profession depends on the demands of stakeholders and the capabilities of the profession. The auditing profession must accept new demands for auditor responsibilities in the new context. This also has implications for audit bodies in narrowing the audit expectation gap in Vietnam.

Career choice intention and work engagement of the audit professional in the Brazilian context

Objective: This research analyzed the attitudinal, subjective norms, behavioral perception, and work engagement variables that determine the audit professional’s intention to choose to pursue the career.Method: The methodology is quantitative, descriptive, and survey. Data were obtained through the application of a questionnaire with 312 audit professionals in Brazil. Data analysis included structural equation modeling.Originality/Relevance: The theoretical gap lies in the relationship between the Theory of Planned Behavior and work engagement in audit professionals. In this way, the intention of deciding on a career does not consist only in choosing a specific branch within the accounting area, but also in the individual’s willingness and competence to implement their projects and in the future engagement to support it, which demonstrates the confidence of the search.Results: The results revealed that audit professionals are happy to follow in this area, feel confident, believe in their professional capacity, and intend to grow in their careers in the coming years. Professionals have high levels of vigor, dedication, and concentration, and are highly engaged in their work. Personal attitudes, subjective norms, vigor, and dedication presented an explanatory power of 58% of the intention, concluding that the relationships between the scales are supported.Theoretical contributions: The model for measuring the relationship between intention to choose a career and engagement at work was validated. The study fills a gap in the behavioral area, helping to understand the auditor's behavior.