Auditor Independence Research Articles

THE EFFECT OF AUDITOR CHARACTERISTICS AND GENDER DIVERSITY ON FRAUD DETECTION

Accounting fraud can occur in any company and must be detected to reduce it. This research aims at empirically investigating the effects of auditor characteristics and gender diversity on fraud detection. The population used mining companies listed on the Indonesia Stock Exchange for 2016-2020 with 205 observation data. The data analysis technique used was the Panel Data Regression Model. The results showed that auditor independence and audit report lag had a positive effect, and audit tenure and gender diversity harmed fraud detection. Additionally, auditor rotation, auditor industry specialization, and audit firm size also had not. The auditor’s independence and adequate audit period would allow the auditor to be more effective in fraud detection.

Real-time x-ray abnormality alerts for emergency departments using a radiographer comment model - a multisite pilot study

IntroductionThe timely communication of clinically significant image appearances to Emergency Department (ED) referrers is necessary for optimum patient care. Australian reliance on verbal communication only is time-limited, open to misinterpretation and lacks transparency. A combined radiographer alert and comment model was designed to reliably communicate image abnormalities to ED referrers in real-time. MethodsA multidisciplinary steering group designed the model for all ED general imaging. Protocols were developed to document radiographer comments (critical, urgent and clinically significant) in patients’ medical records. Critical findings were communicated directly to ED.Five NSW hospitals varying in size, complexity and population demographics piloted the model between three to twelve months during 2021–2022.Site auditors compared comments with the radiology report and designated each as True Positive (TP), False Positive (FP), indeterminate and clinically significant. Indeterminate cases were analysed by an external radiologist. Inter-observer consensus was obtained for all classifications via two independent auditors. The Positive Predictive Value (PPV), or precision of the comment, was calculated for each site. ResultsRadiographers (n = 69) provided comments for 1102 cases. The pooled average PPV for TP was 0.96; (0.947–0.971; 95% CI). The weighted mean error (FP comments) was 3.9%; (2.9% - 5.3%.; 95% CI). ConclusionThe Radiographer Comment model provided consistent levels of commenting precision and reproducibility across a range of sites with a pooled average PPV (0.96). The False Positive rate or weighted mean error (FP) of 3.9% (2.9% - 5.3%.; 95% CI) was low. Implications for future practiceA strategic, interprofessional approach in the implementation of an image alert combined with a Radiographer Comment can be adapted across a variety of hospital settings for ED and other departments.

Is expanded auditor reporting meaningful? UK evidence

In 2013, the United Kingdom (UK) Financial Reporting Council (FRC) mandated independent auditors to provide an expanded audit report to disclose the risks of material misstatement and application of materiality. This paper examines the information content and economic consequences of the expanded auditor’s report and offers three main results. We first investigate the usefulness of auditor reporting regime change and find evidence that the new reporting regime has some influence on market indicators. Second, we document that firms receiving an expanded audit report with a higher level of disclosure on risks of material misstatement (materiality) exhibit significantly higher (lower) idiosyncratic risk, beta, and cost of equity. That is, the expanded auditor’s disclosure meaningfully affects firms’ risk fundamentals. Third, we find that information conveyed by the expanded auditor’s report impacts bid-ask spread, trading volume, volatility of market returns, and analyst forecast dispersion. Collectively, our analyses suggest that auditors provide information that meaningfully reflects the risks that the audited companies face. Furthermore, this information is associated with significant economic consequences for capital market participants, implying that it is not generic. This firm-specific and useful disclosure supports the FRC (followed by International Auditing and Assurance Standard Board (IAASB) and Public Company Accounting Oversight Board (PCAOB)) decision mandating the expanded audit report and provides evidence-based insights to major recent structural reforms aiming at proposing remedies to audit and capital market problems in the UK, and beyond.

To replicate or not to replicate? That is the question

The scientific research world was shaken by revelations of a crisis in reproducing well-regarded research in psychology. This crisis reverberated across several academic disciplines including accounting, which led to controversy about the place and status of replications in accounting. The imperative for encouraging replications in our field is not new and has been met largely with opposition. While antagonists and advocates hold their ground, I believe it is critical to address misconceptions of the role and value of replication studies. In this essay, I clarify the role of replications focusing on two general types of replication: close and differentiated replications. I then discuss the status of replication in accounting followed by a brief narrative on a well-known replication in the auditor independence literature. My concluding comments weave through suggested pathways for a better understanding of replication studies.

The Orbital Dynamics of Auditor Firm Rotation: Implications for Auditor Independence and Audit Quality

Another trip around the sun? How does the auditor orbit the audit engagement? The primary objective of any audit engagement is to gather sufficient relevant audit evidence for the auditor to render an opinion on the financial statements. Previous research has illustrated that the compulsory rotation of audit firms yields positive effects on audit quality. The rationale behind auditor rotations lies in their potential to enhance audit quality by mitigating the risk of auditors becoming excessively familiar with clients, which could compromise their independence and impartiality.

The Impact of Auditor's Independence, Ethics, and Competency in Audit Quality: Using Auditor's Integrity as a Mediator in the Sultanate of Oman

Ensuring audit quality is crucial for many parties, including businesses, investors, shareholders, and researchers, who want to focus more on how auditors' input factors affect the quality of their work. The main objective of this study is to analyse the factors affecting the auditor's independence, ethics, and competence in audit quality, with the auditor's integrity as a mediator. The primary data was collected from questionnaires distributed to external auditors in the Sultanate of Oman's private sector with 236 respondents. A Smart-PLS (Partial Least Square) is used to analyse the data. The findings show that the auditor's independence, ethics, and competence significantly impact the audit quality. In addition, the result indicates that the auditor's independence with auditors' integrity as a mediator has a significant impact on audit quality, the auditor's ethics with auditors' integrity as a mediator has a significant effect on audit quality, and the auditors' competence with auditor's integrity as a mediator has a significant impact on audit quality.

Audit Quality and Earnings Management of Listed Manufacturing Firms in Nigeria

This study investigates whether there is any relationship between audit committee characteristics and financial restatement. Using secondary data over the period from 2009 to 2020 of 12 non- financial firms, the results of the Panel Estimated Generalized Least Squares (EGLS Period SUR) reveal that audit firm size, audit tenure, audit fees, audit firm age and joint audit are negatively and statistically significant with earnings management while audit independence has a positive and significant impact of earnings management. The overall results shows that audit quality significantly influenced earnings management and that help in reducing managers tendencies to reduce the practices of managing earnings for whatever the reasons. The study concludes with some recommendations for better performance reporting.

Pengaruh Komisaris Independen, Komite Audit, Board Gender Diversity, dan CSR terhadap Tax Aggressiveness pada Perusahaan Kompas100 Sebelum dan Selama Pandemi

This study aims to determine the effect of independent commissioner, audit committee, board gender diversity, and CSR on tax aggressiveness The population and sample in this study were KOMPAS100 index companies listed in Indonesian Stock Exchange before and during the Covid-19 pandemic for the 2018-2021 period. The sampling technique of this study was using purposive sampling technique. The number of research samples before the Covid-19 pandemic was 69 samples and during the Covid-19 pandemic was 85 samples. The data analysis technique used in this study is multiple linear regression. Before the Covid-19 pandemic, it was found that independent commissioner, audit committee, board gender diversity, and firm size had no impact on tax aggressiveness, while CSR and leverage had an impact on tax aggressiveness. During the Covid-19 pandemic, it was found that CSR, board gender diversity, leverage, and firm size had no impact on tax aggressiveness, while the independent commissioner and audit committee had an impact on tax aggressiveness.

Does increasing auditors' independence lead to more forceful public auditing? A study of a Canadian internal audit reform

AbstractThe value of auditing as an instrument of accountability depends upon the independence of auditors. However, the extent to which auditors feel free to review the operation, compliance, and performance of public programs and objectively communicate findings to stakeholders has rarely been assessed. A Canadian public service reform in 2006 introduced institutional safeguards to bolster the independence of departmental internal auditors, but left legislative auditors working for the Auditor General's Office (i.e., Canada's Supreme Audit Institution) unaffected. We analyze and compare 2677 audit reports written by internal and legislative auditors before and after the reform. After the reform, the language used by internal auditors became more assertive and evaluative, but not more critical. This suggests that the safeguards had a meaningful impact on how auditors perform their accountability function but that factors other than independence may be driving their willingness to be more adversarial and critical when communicating audit findings.

INFLUENCE OF PROFITABILITY, SOLVENCY, COMPANY SIZE, AND AUDITOR'S OPINION ON AUDIT DELAY

There are many cases of companies that are late in reporting financial statements because an audit by an independent auditor takes quite a long time before being submitted to the OJK for publication. This study aims to determine the effect of profitability, solvency, company size, and auditor's opinion on audit delay in healthcare companies listed on the IDX from 2019 to 2021. This study uses purposive sampling; the population is healthcare companies listed on the Indonesia Stock Exchange, and the sample size is 54. This research applies data analysis, namely multiple linear regression analysis with a panel data regression model. Since this research uses the combined data of time series and cross-section, the analytical technique used in the analysis process to obtain more accurate results is multiple linear regressions with panel data. The data obtained is then processed using Microsoft Excel and SPSS version 26. The results show that the variables of profitability, solvency, firm size, and auditor's opinion have no significant effect on audit delay; those variables also have no simultaneous effect on audit delay. Keywords: Profitability, Solvency, Company Size, Auditor Opinion, Audit Delay.

Is voluntary risk disclosure informative? The role of UK firm-level governance

PurposeThe study investigates how firm-level governance (FL_G) affects the disclosure of voluntary risk information. Likewise, it explores the influence of FL_G on the informativeness of voluntary risk disclosure (VRD). Specifically, it examines how FL_G shapes the nexus between VRD and firm value.Design/methodology/approachIt uses a sample of non-financial firms from the FTSE350 index listed on the London Stock Exchange between 2010 and 2018. The authors utilise an automated textual analysis technique to code the VRD in the annual reports of these firms. The firm value, adjusted for the industry median, is a proxy for investor response to VRD.FindingsThe results suggest that UK firms with significant board independence and larger audit committees disclose more risk information voluntarily. Nevertheless, firms with larger boards of directors and higher managerial ownership disseminate less voluntary risk information. Besides, VRD contains relevant information that enhances investors' valuation of UK firms. These results are more pronounced in firms with higher independent directors, lower managerial ownership and large audit committees.Practical implicationsThe study rationalises the ongoing debate on the effect of FL_G on VRD. The findings are helpful to UK policy-setters in reconsidering the guidelines that regulate UK VRD and to the UK investors in considering risk disclosure in their price decisions and thus enhancing their corporate valuations.Originality/valueIt contributes to the risk reporting literature in the UK by presenting the first evidence on the effect of a comprehensive set of FL_G on VRD. Besides, it enriches the existing research by shedding light on the role of FL_G on the informativeness of discretionary risk information in the UK.

The influence of shariah committee mechanisms on audit report delay: Before and during the COVID-19 crisis

This paper examines the relationship between Shariah committee mechanisms and audit report lag. Specifically, this study examines the relationship between the Shariah committee size, independence, frequency of meetings, and expertise. Furthermore, this study investigates the severe impacts of the COVID-19 crisis on the audit report lag. The panel data analysis analyses the relationship between Shariah committee mechanisms and the audit report lag of Malaysian Islamic banks from 2011 to 2021. The present study discovered that a majority of Islamic banks in Malaysia require a duration of 74 days to complete the issuance of independent auditor reports. The findings of the analysis suggest that there exists a negative correlation between the size of the Shariah committee, the frequency of meetings, and the level of knowledge, and the audit report lag. Furthermore, the investigation has also determined that the COVID-19 situation has had a significant impact on the postponement of audit reports. This study helps guide the policymakers in overseeing violation of the submission guidelines. It also presents the literature on audit report delay and Shariah mechanisms. The efficiency of the Shariah committee mechanisms is examined in this research as an extension of the use of agency theory. It helps to comprehend concerns with the Shariah committee mechanism in Malaysian Islamic banks. Then, this study provides evidence during the COVID-19 crisis and how to deal with a similar situation in the future. Additionally, it helps auditors and top management to better understand the good Shariah committee mechanism and audit report lag in planning audit engagements.

Analysis of the role of the independent auditor on reducing time lags in financial reporting and earnings management

ABSTRACT
 This study aims to analyze differences in the timeliness of financial reporting and earnings management in terms of auditor quality in manufacturing companies on the Indonesia Stock Exchange. based on the purposive sampling technique, a sample of 37 companies was obtained so that for 3 years of observation the data processed were 111. The hypothesis was tested using the Independent Samples Test different test. The results showed that there was no difference in the level of audit delay between companies audited by big four auditors or not. Meanwhile, the level of corporate earnings management audited by the big four or not the big four shows different results. This shows that the role of independent auditors in reducing earnings management is successful.
 
 Keywords: Auditor Quality, Audit Delay and Earnings Management

Evolution of laparoscopic pancreaticoduodenectomy at Westmead Hospital.

Despite its proposed benefits, laparoscopic pancreaticoduodenectomy (LPD) has not been widely adopted due to its technical complexity and steep learning curve. The aim of this study was to report a single surgeon's experience in the stepwise implementation of LPD and evolution of technique over a nine-year period in a moderate-high volume unit. Carefully selected patients underwent LPD initially by hybrid approach (laparoscopic resection and open reconstruction), which evolved into a total LPD (laparoscopic resection and reconstruction). Data was prospectively collected to include patient characteristics, intraoperative data, evolution of technique and postoperative outcomes. A total of 25 patients underwent hybrid LPD (HLPD) and 20 patients underwent total LPD (TLPD). There was no 90-day mortality. Three patients developed a postoperative pancreatic fistula (POPF), all of which occurred in patients undergoing HLPD. There was no POPF in 20 consecutive TLPD. There was no evidence of anastomotic strictures in the hepaticojejunostomy in patients undergoing TLPD at long term follow up. A gradual and cautious progression from HLPD to TLPD is essential to ensure safe implementation into a unit. LPD should only be considered in carefully selected patients, with outcomes subjected to regular and rigorous independent audit.

Analisis Faktor-Faktor Yang Mempengaruhi Kualitas Audit Pada Kantor Akuntan Publik di Batam

This study aims to analyze the effect of audit independence, competence and professional ethics on audit quality. In this study, a sample of 65 respondents were those who worked and as employees of several KAP in Batam City. Multiple regression tests are used to test hypotheses in order to analyze the influence of factors on audit quality. This study shows that independence and competence do not have a positive effect on audit quality. At the same time, audit ethics has a significant positive impact or influence on audit quality.

Independence as a Moderating Influence of Gender and Religiosity on Audit Judgment

The purpose of this study was to explain the effect of gender, religiosity as independent variables and auditor independence as moderating variables on audit judgment as the dependent variable. The researchers conducted a research at several Public Accounting Firms (KAP) in East Java. This study uses the associative method to analyze the causal relationship between the variables of gender, religiosity on audit judgment with independence as a moderating variable. The results showed that Gender had no significant effect on the Judgment audit, religiosity had a significant effect on the Judgment audit, the interaction between Independence and Gender on the Judgment audit, showed that Independence weakened the influence of gender on the Judgment audit, and the interaction of Independence and Religiosity on the Judgment audit showed that Independence strengthened the effect of religiosity on the Judgment audit

Influence Of Competence, Due Professional Care, Integrity, And Auditor Independence On Audit Quality With The Implementation Of Quality Assurance As A Moderating Variable

This study aims to test and analyze the effect of competence, due professional care, integrity, and auditor independence on audit quality with the implementation of quality assurance as a moderating variable. The study population was functional auditors and executors of examiners assigned to assist in conducting audits at the Regional Office of the Directorate General of Customs and Excise East Java I. The sampling technique used a saturated sample, namely the entire population totaling 47 (forty-seven). The sampling technique used saturated samples, namely the entire population of 47 (forty-seven) people as research samples. This type of research is quantitative research, with data collection methods through questionnaires. The data analysis technique to test the hypothesis uses Partial Least Square - Structural Equation Modeling with the SmartPLS program.The results showed: 1) auditor competence has a significant and positive effect on audit quality, 2) due professional care has a significant and positive effect on audit quality, 3) auditor integrity has a significant and positive effect on audit quality, 4) auditor independence has no effect on audit quality, 5) implementation of quality assurance has a significant and positive effect on audit quality, 6) the implementation of quality assurance is able to moderate the effect of auditor competence on audit quality, 7) the implementation of quality assurance is able to moderate the effect of due professional care on audit quality, 8) the implementation of quality assurance does not moderate the effect of auditor integrity on audit quality, 9) the implementation of quality assurance does not moderate the effect of auditor independence on audit quality.

Independent Corporate Governance Organ Busyness, Earnings Quality, And Market Mispricing: Evidence From Indonesia

This research aims to give empirical evidence of the impact of independent corporate governance organ's busyness on earnings quality and market mispricing. This research utilized a sample of non-financial firms. It investigated the effect of independent corporate governance organ's busyness on earnings management and earnings persistence using random-effect panel data regression. Furthermore, the Mishkin Test was used to investigate market mispricing. The results showed that the busyness of independent commissioners and independent audit committees had a positive effect on increasing the magnitude of earnings management and a negative impact on the persistence of the accrual component but did not cause market confusion in assessing the company's earnings components. Furthermore, it was discovered that the degree of independent director's business did not influence the magnitude of earnings management. Instead, it resulted in poor persistence of the accrual component and market uncertainty in assessing earnings components.

Challenges and Opportunities for the Implementation of Internal Audit to Realize Good University Governance in Private Universities in Central Java

This study aims to investigate the efforts and commitments, challenges, and opportunities for the implementation of financial internal audits at Private Universities in Central Java. This study used a qualitative method by conducting interviews with members of the Internal Supervisory Unit at four private universities in Central Java that were accredited as superior. Private universities’ efforts and commitments were analyzed using institutional work theory, while challenges and opportunities were analyzed using institutional logic theory. The results showed that private universities' efforts to implement financial internal audits were realized with the motivation to implement Government regulations related to the accreditation of private universities. The commitment of private universities is indicated by the preparation of Standards of Operations (SOPs) for the implementation of internal audits and the inculcation of organizational culture. The challenges faced by private universities are limited human resources and information system technology. The opportunities that private universities have are an independent internal audit body and the Rector's open and transformative leadership style. The implementation of internal financial audits at private universities requires effort and commitment from the Rector and members of the organization to face challenges both from within and from outside.

The Influence of Independence, Experience, Gender, and Internal Control Auditor's Understanding of Audit Judgment in the Big Four Public Accounting Firms in Indonesia

This study aims to examine and analyze the influence of independence, experience, gender, and understanding of internal control auditors on the audit judgment of the big four public accounting firms in Indonesia. The population of this study involved all auditors working in the big four public accounting firms in Indonesia and 60 respondents sample used in this study. The data collection technique used a questionnaire through Google Form. Data analysis techniques in this study employed the tests of data quality, classic assumption, and hypothesis testing using SPSS 26.0 software. The results of this study indicate that independence and experience have an influence on audit judgment, while there is no influence in gender and understanding of the auditor's internal control on audit judgment. In simultaneous testing, it is known that the independence, experience, gender, and understanding of the auditor's internal control influence the audit judgment.