Audit Opinion Research Articles

Pengaruh Financial Distress dan Profitabilitas terhadap Opini Going Concern dengan Opini Shopping sebagai Variabel Pemoderasi

The purpose of this research is to determine the effect of financial distress and profitability on going concern opinion with opinion shopping as a moderating variable. This research used purposive sampling method as a sampling technique with 42 selected companies from the properties & real estate sector listed on the Indonesia Stock Exchange for the 2018-2020 period. This research uses secondary data obtained using documentation techniques from annual reports and financial reports. The data is analyzed using logistic regression analysis techniques using SPSS software. The results of this research showed that financial distress has no effect on going concern audit opinion while profitability has an effect. In addition, this research also showed that opinion shopping is unable to moderate the effects of these two variables on going concern opinion.

SEBERAPA EFEKTIFKAH ARTIFICIAL INTELLIGENCE DALAM FRAUD DETECTION PADA MASA COVID-19: SYSTEMATIC LITERATURE REVIEW

The development of increasingly advanced technology certainly has a positive impact in various fields, especially in auditing, especially during and after Covid 19. A technology that is most highlighted today is the use of Artificial Intelligence in detecting digital fraud risks, which can be interpreted as using the technology-based web to commit fraud and misuse of assets for financial gain. This study aims to review the use of AI in fraud detection to support external audits, especially during the Covid 19 period. The research method used in this study is a Systematic Literature Review (SLR) or systematic literature review. Based on the analysis results, Artificial Intelligence (AI) has begun to be applied to audit procedures to support decision-making through machine learning. The success of Artificial Intelligence in detecting fraud and issuing audit opinions must be seen as two complete sides, namely, opportunities and challenges that must be responded to wisely, especially by auditors. During the covid 19 pandemic, AI helps, especially for auditors challenged in creating new methods developed due to the required COVID-19 strategy. This research implies that auditors and companies can switch to using AI, which can help their work efficiency in disclosing fraud that occurs.

Determinants of Local Government Financial Performance in Indonesia

Regional autonomy is expected to promote financial performance and people’s welfare. This study investigates factors that affect local governments’ financial performance in Indonesia, where performance is defined as the ability to generate local revenues. To test our hypothesis, we used panel data regression analysis. From 2012 to 2019, this study collected 3,747 observations on municipal governments. The dependent variable is local government financial performance, while the independent variables include region size, capital spending, financial reporting quality, audit recommendations, and the horizon problem. We find that the size of the local government, financial reporting quality, and the follow-up on audit recommendations positively affect financial performance. Larger local governments have more resources to generate revenues. High financial reporting quality and accountability are supposed to improve public trust and increase their willingness to make contributions through local tax payments. Capital expenditure, on the other hand, is associated with lower financial performance. This study contributes to the literature on financial performance, especially in the public sector, by providing empirical evidence on factors affecting local government financial performance. This study provides insight to stakeholders by providing evidence on the role of size, capital spending, audit opinion, and follow-up of audit recommendations in accelerating the improvement of financial performance. 
 
 Received: 13 July 2023 / Accepted: 25 August 2023 / Published: 5 September 2023

THE READABILITY OF KEY AUDIT MATTERS PARAGRAPH IN AUDITOR'S REPORT: A STUDY FROM ASEAN COUNTRIES

The objective of this research is to explore the readability level of the Key Audit Matters (KAM) paragraph as well as its progress since the first time implementation of KAM for financial statements issued by auditors for listed companies in ASEAN countries. KAM paragraph is extracted from an audit opinion issued by a public accounting firm for companies listed in the capital market around ASEAN countries. Following prior research, by using learning curve theory as a basis, this research applies a quantitative approach to evaluate the readability of the KAM and its progress. Readability is measured by using several commonly used linguistic techniques, which are Flesch Reading Ease (FLESCH), Flesch–Kincaid (KINCAID), and Gunning Fog (FOG) measures). In addition to its role in KAM topic-related research, by bringing the perspective to focus more on readability, this research is able to provide new perspectives on the capability of KAM to affect financial statements users' decisions, as well as provide additional insight for the regulator or professional body for public accountant profession on designing the practical support and assistance to enhance the current practice of KAM writing done by the public accountant, as well as insight for the public accounting firm in preparing clearer and readable KAM paragraphs. This research used ASEAN market data as an emerging market and covered up to the recent year auditor's report to study the readability of the KAM paragraph. Despite some inconsistencies in the observation result, we can make an inference that the readability level of KAM produced by auditors for listed entities in ASEAN countries tend to be more difficult to read as number of experiences in issuing it increasing. This pattern is consistently shown when the sample is divided by type of Auditor and country of exchange. However, when the sample is further detailed down by industry sector, inferences is difficult to be made.

Do Audit Data Analytics Influence Juror Perceptions of Audit Quality and Auditor Negligence?

SUMMARY We summarize a recent study that examines whether and how the signals provided by the internal control over financial reporting (ICFR) opinion and auditor use of advanced data analytic tools (ADAs) influence juror negligence perceptions. When auditors issue an unqualified ICFR opinion and rely on traditional statistical sampling, jurors assess the auditors as more negligent than when the auditors use ADAs. Conversely, when auditors issue an adverse ICFR opinion, jurors ascribe less blame to auditors and more to investor plaintiffs, regardless of whether the auditors use ADAs. Further, jurors perceive auditors as less negligent when they use ADAs for full population testing because they perceive ADAs to be an indicator of higher audit quality. Interestingly, jurors perceive no difference in the level of assurance provided by the audit opinion alone when auditors use ADAs relative to traditional sampling testing methods.

Analysis of the Influence of Profitability, Solvency, Liquidity, and Firm Size on the Timeliness of Financial Reporting with Audit Opinion as a Moderating Variable in Sector Trading, Services, and Investment Companies on the Indonesia Stock Exchange in 2016-2020

This study aimed to test the effect of profitability, solvency, liquidity, and firm size on the timeliness of financial reporting with audit opinion as a moderation variable in the trade, service, and investment companies listed on the Indonesia Stock Exchange. The population in this study was taken from the trade, service, and investment sector companies listed on the Indonesia Stock Exchange during 2016-2020. Where the company included in the criteria was 79 companies. Data is processed using a logistics regression test. The results of this study concluded that solvency affects the timeliness of financial reporting, while profitability, liquidity, and firm size do not affect the timeliness of financial reporting. Audit opinion can moderate firm size to the timeliness of financial reporting, and audit opinion cannot moderate the relationship between profitability, solvency, and liquidity to the timeliness of financial reporting. Keywords: profitability, solvency, liquidity, firm size, audit opinion, and timeliness

The Effect of Audit Fee, Audit Opinion, KAP Size, Audit Tenure and Auditor Switching for Audit Delay in Companies on The Lq 45 Index Listed on Idx 2019-2021

Examining the effects of audit fee, audit opinion, KAP size, audit tenure, and auditor switching on audit delay in firms on the LQ 45 index listed on IDX 2019–2021, this research looks at these factors and others. Companies on the LQ 45 index that listed on the IDX continuously from 2019 to 2021 make up the population of this study. Purposive sampling was the sampling method used to choose the 24 firms that satisfied the requirements. This study used a multiple linear regression analysis using SPSS 25. Audit fees and audit opinion were shown to significantly impact audit time in this research. However, audit time is not significantly affected by KAP size, audit duration, or auditor turnover

Gender-Diverse Audit Committees, Size of Public Accounting Firms, and Audit Opinions on Stock Prices Mediated by Audit Report Lag

This research examines and assesses the connection between gender-diverse audit committees, the size of public accounting firms, and audit opinions on stock price mediated by audit report lag. The research topic explored energy companies listed on the Indonesian stock exchange (IDX). Fifty-four data from three years of observation were included The research sample was selected with a purposive sampling technique, following three particular criteria. Data were analyzed using PLS-SEM analysis. Data processed using SmartPLS 3.2.9 application. The results of the tests showed that results were Gender-diverse audit committees did not affect Audit Report Lag. In contrast, the size of the public accounting firm and audit opinion affected the audit report lag. Gender-diverse audit committees had no direct and indirect effect on stock prices. In contrast, the public accounting firm's size and audit opinion affect stock prices directly and indirectly, and audit report lag affects stock prices.

Altman Z-Score Accuracy in Predicting the Potential Bankruptcy of Issuers in the Sector Restaurant, Hotel And Tourism During the Covid-19 Pandemic

The purpose of this study was to determine the accuracy of the Altman Z-Score in predicting the potential for bankruptcy of public sector companies, hotels and tourism. This study used a quantitative descriptive research design because the data used are quantitative data and the bankruptcy variable described using the Altman Z-Score method. The data used are secondary data derived from the financial statements of issuers in the tourism, restaurant and hotel sectors including data on working capital to total assets, retained earnings to total assets, earnings before interest and taxes to total assets, and total equity to total debt. . The results showed that 19% of companies that experienced losses in 2021, the remaining 81% of companies experienced losses. The results of the classification comparison based on the Z-Score value and the auditor's opinion show that 43% was accurate, while the remaining 57% was inaccurate.

Pengaruh Opini Audit, Financial Distress, Pergantian Manajemen terhadap Auditor Switching:


 This study aims to determine the effect of audit opinion, financial distress, and management changes on auditor switching. The dependent variable in this study is auditor switching, while the independent variables measured in the implementation of this research are audit opinion, financial distress, and management turnover. This type of research is quantitative research with a population obtained from BUMN companies registered on the BUMN website in 2020-2022. The sampling technique used was purposive sampling technique and produced 10 sample companies for 3 years of observation. The type of data used is secondary taken from the financial statements of state-owned companies. The analysis technique used in this study is logistic regression analysis using SPSS version 20. The results of the analysis in this study indicate that audit opinion, financial distress and management turnover have no effect on auditor switching. The coefficient of determination (R2) in this study is 7.9% while the rest is explained by variables with other models outside this study.
 Kata Kunci: Audit Opinion; Financial Distress; Change of Management; Switching Auditors

Kompetensi Keahlian, Pengalaman, Skeptisme Profesional Auditor, dan Situasi Audit terhadap Relevansi Pemberian Opini Audit atas Laporan Keuangan Entitas

This research is to examine and provide empirical evidence that the factor of expertise, experience, professional skepticism auditors and audit situation has no effect or no relevance to the provision of audit opinion on the financial statements of the entity. This research was conducted by using the sampling method is purposive sampling, with the type of quantitative research. Data was analyzed using multiple regression analysis models. Hypothesis testing is done to determine the extent of expertise, experience, professional skepticism auditors and audit situations affect the relevance of the provision of audit opinion on the financial statements entitatas either partially or simultaneously. Hypothesis testing results show that the experience and professional skepticism auditors partially or simultaneously positive effect on relevensi granting audit opinion on the financial statements of the entity, where as the expertise and audit situation does not affect the relevance of the provision of audit opinion on the financial statements of the entity.

THE INFLUENCE OF PROFESSIONAL ETHICS, EMOTIONAL INTELLIGENCE AND PROFESSIONALISM ON THE DECISION MAKING OF GIVING AUDITOR OPINION

In the current business landscape, the credibility of financial reporting relies heavily on the integrity of auditors and their decision-making processes. This study aims to examine and analyze about the effect of professional ethics, emotional intelligence and professionalism on the decision making of giving auditor opinion. The type of research used in this study is multiple linear regression analysis. The research was conducted using primary data obtained through distributing questionnaires to independent auditors who work at Public Accounting Firms registered with the Ministry of Finance and having an address in Tangerang City. The sampling method in this study used convenience sampling with the sample result obtained in this study as many as 4 Public Accounting Firms. Data analyze using descriptive statistics, classical assumption test and hypothesis testing. Based on the testing result was found professional ethics, emotional intelligence and professionalism simultaneously influence the decision making of giving auditor opinion. Calculation of R2 yields 75,4%, it means there are 24,6% who explain by other variables outside this study. Based on the partial test result, it was found independent variable (professional ethics, emotional intelligence and professionalism) had an effect on the dependent variable, the decision making of giving auditor opinion.

Pengaruh Kualitas Audit, Audit Report Lag, Manajemen Laba Dan Financial Distress Terhadap Opini Audit Going Concren Pada Perusahaan Property Real Estate 2018-2020 Yang Terdaftar Di Bursa Efek Indonesia (BEI)

The purpose of this study is to find out whether audit quality, audit report lag, manajemen laba and financial distress can affect going concren oppinions during the 2018- 2020 period in property and real estate sub-sector companies. This study uses secondary data obtained from company auditor reports taken on the Indonesia Stock Exchange website or www.idx.co.id. In this study, there were 159 companies studied during the 2018-2020 period. The test results in the hypothesis used are logistic regression analysis which results that audit quality does not affect going concernaudit opinion while audit lag affects going concern audit opinion.

Organisation of Internal Controls and Financial Audits in the Public Sector Organisations

The purpose of the study is to analyze the problems associated with the way internal control and financial auditing are organised in budgetary and public sector organisations. The authors show that internal control, as a process of interrelated actions, ensures risk reduction in the course of achieving the desired results of the institution’s activities. The level of internal control is assessed during the activities carried out through the Federal Treasury and State (municipal) financial control and internal financial audit. The article describes the procedure for the development of the Regulations on internal Control; reflects the main distinguishing features of internal control and internal financial audit; a classification of violations (risks) of budget (accounting) accounting and reporting has been formed, as well as the procedure for drawing up an audit opinion. The study shows that in order to quickly find problem areas and make management decisions based on the identified factors, it is necessary to strengthen electronic SMART control (controlling), accounting for public finances, and, accordingly, conduct comprehensive scientific research in promising areas. Methods of systematisation, comparison, grouping of the information were used in the preparation and writing of the article. The practical significance lies in the application of conclusions and proposals made on the results of the study to improve internal control and audit, which will allow interested users to obtain more reliable and understandable information to make management decisions based on it. The article is intended for a wide range of readers, undergraduate and graduate students dealing with the problems of internal control.

Effect of Management Change, Company Size, and Audit Opinion on Auditor Switching

This study aims to analyze the influence of management change, company size, and audit opinion on auditor switching. Using dummy variables for management change and audit opinion, and log total assets to measure company size, the research was conducted with purposive sampling, selecting 15 companies from the transportation sub-sector listed on the BEI between 2018 and 2021. Logistic regression was used for data analysis. The results indicate that management change, company size, and audit opinion do not significantly affect auditor switching. The findings offer valuable insights for investors and shareholders, emphasizing the importance of carefully examining financial reports, particularly audit results, to make informed investment decisions. For companies, the study highlights the need for meticulous decision-making when considering auditor switching. Additionally, for auditors, the research underscores the importance of maintaining independence by avoiding overly long-term relationships with clients. Future research could explore other variables and expand the sample size. Nonetheless, this study contributes valuable information to the field of auditor switching and its implications on various stakeholders

Sharia’s Accounting Information Disclosure, Accountability, and Auditor Independence Effects on Stakeholder Trust: Analysis on Sharia Companies in Capital Market

Businesses in the food and beverage sector have strong opportunities to grow in their operations because people consume more food and beverages. In order to calculate the level of future risk, data relating to financial proportions must be worked out in other financial investigation structures. Investigating the financial challenges faced by companies in the food and beverage sector that trade conventional and Islamic stocks on the Indonesia Stock Exchange is the aim of this study. The research examines the relationship between these factors and stakeholder trust in order to understand the impact of accounting practices and auditor independence on the trustworthiness of Sharia companies. The study utilizes quantitative and associative approach. By measuring linearly and clauses to describe the relationship between two or more variables, associative research techniques are a type of research that uses statistical calculations to test hypotheses. Audit delay is one of the things that tempts businesses to change auditors. This study supports the hypothesis that organizations that experience audit delays are more likely to change auditors in the next period in an effort to win back investor confidence. The test findings show that audit opinion, audit delay, and financial strain all impact auditor turnover at the same time. The research findings show that organizations that experience accounting losses do not experience financial difficulties directly. Usually, businesses whose shares are listed on the Islamic stock index have stronger financial strength.

The Influence of Company Growth, Company Size, Audit Quality, Previous Year's Audit Opinion, and Leverage on Acceptance of Going Concern Audit Opinions in Banking Companies Registered on the IDX

This study aims to analyze the factors that affect the going concern audit opinion. The factors used are company growth, firm size, audit quality, audit opinion the previous year, and leverage. The study population were 30 banking companies listed in the Indonesia Stock Exchange since the year 2011-2013. Samples were selected using purposive sampling method. This study uses quantitative methods with logistic regretion analysis model. Results of this study prove that: 1). Company growth, firm size, audit quality, and leverage do not affect the acceptance of going concern audit opinions. 2). Audit opinion the previous year affects the acceptance of going concern audit opinion.

The Influence of Audit Quality, Company Financial Condition, Previous Year's Audit Opinion, Company Growth on Acceptance of Going Concern Audit Opinion in Companies Listed on the IDX

The responsibilities of auditors currently do not only focus on assessing the fairness of financial statements and detecting fraud, but also on assessing the company's ability to maintain its survival. This is due to the demands of the shareholders to the auditor to provide early warning about the prospects of a company as consideration before deciding an investment decision. The research's goals were to examine the effect of the audit opinion received in the quality of the audit, financial condition of the company, previous years against the acceptance and the company's growth of a going concern opinion. The samples of this research were the companies that suffered losses three years in a row and were listed on the Indonesian Stock Exchange (ISE) from 2011 to 2013. The hypotheses were tested using a logistic regression method. The results of this research showed that the quality of audits and previous audit opinions had a significant effect, but the financial variables and growth companies weren't significantly influenced by going concern opinions.

Auditor's Reputation and Auditor's Opinion on Stock Prices: Evidence from Indonesia's Main Board Index

This paper examines the effect of the auditor reputation and the auditor's opinion on the stock prices of the firm in the following year from Indonesia Main Board Index for the period of 2016 to 2020. This research aims to study the importance of the auditor's reputation and the opinion given to the value of the firm by their stock prices movements in the following year. Regression analysis was applied with control variable and year fixed effect to find out whether or not the reputation of the auditor and the opinion given by the auditor could affect the stock prices of the firm in each sample year. The result shows that auditor's reputation does affect the stock prices in the following year which means choosing BIG4 CPA firm will increase stock prices in the following year, while auditor's opinion does not affect the stock prices of the firm in the following year.

Auditors’ response to earnings management after split-share structure reform in China

PurposeThis study aims to investigate whether and how auditors responded to the documented increases in earnings management after split-share structure reform (SSSR) in China, as manifested in auditors’ propensity to issue modified audit opinions (MAOs) after the SSSR. This study further investigates how client importance and auditor size influence auditors’ response to earnings management after the SSSR.Design/methodology/approachThis study adopts logit regression models to investigate auditors’ propensity to issue MAOs to their clients that appear to manage earnings after the SSSR. Initially, including all Chinese publicly listed firms from the CSMAR database, the sample for final analyses consists of 21,904 firm-year observations for 1,290 unique listed firms during the period 2001–2020. The sample period surrounds the implementation of the SSSR, which started in 2005, allowing the examination of auditors’ propensity to issue MAOs after vis-à-vis before the SSSR.FindingsThe authors find that non-Big10 auditors in China were less likely to issue MAOs to their economically important clients who appear to manage earnings after SSSR. However, in the years of non-tradeable shares being released to the markets, both Big10 and non-Big10 auditors were less likely to issue MAOs to their economically important clients who appear to manage earnings. The findings suggest that auditors may have compromised auditor independence in response to earnings management after the SSSR, likely due to the pressure from their economically important clients.Originality/valueThis paper contributes to the literature, specifically the practice and theory in auditing, by shedding light on ever-changing auditors’ reporting behaviour, especially with regard to auditor independence. It also adds to the growing body of literature on the impact of institutional changes on auditing practices worldwide. The findings of this study further suggest that the recently documented declining demand for high-quality audits after the SSSR may be motivated by the clients’ intention to manage earnings after the SSSR.