Influence Of Audit Research Articles

PENGARUH STRUKTUR AUDIT, KOMITMEN ORGANISASI DAN EFEKTIVITAS PENGGUNAAN TEKNOLOGI SISTEM INFORMASI AKUNTANSI TERHADAP KINERJA AUDITOR

This research aims to determine the influence of audit structure, organizational commitment, and the effectiveness of using accounting information system technology on auditor performance at the Tangerang public accounting firm. The type of research used in this research is quantitative research. The data source used in this research is primary data. The population in Tangerang is 2 Public Accountants with 33 auditors. Determining the sample in this study used the total sampling method because the total population was less than 100, so the entire population was used as a sample. The analysis technique uses multiple linear regression analysis, classic assumption tests consisting of normality tests, multicollinearity tests and heteroscedasticity tests. Hypothesis testing uses the coefficient of determination test, F test, and T test. Data analysis uses SPSS version 29 software. The results of this research show that audit structure, organizational commitment, and the effectiveness of using accounting information system technology influence auditor performance.

Impact of Risk Material Misstatements Assessment on Indonesia Audit Practices

Objective: The purpose of this study is to determine what factors could influence the determination of the auditor's Risk Material Misstatement (RMM) in Indonesia. Theoretical Framework: Auditors need to perform a variety of tasks to form an overall assurance or attestation opinion. To do so, various personal attributes of the auditor influence the outcome. In the process of applying these personal attributes towards the performance of the task, auditors interact with other auditors and stakeholders of the firm. Method: Sources of data come from interviews with several auditors in Indonesia and regulators namely IAPI and the Financial Services Authority (OJK). Results and Discussion: The results showed that the factors affect the level of RMM are due to government regulatory factors, individual factors and cultural factors. Research Implications: Government regulatory factors that can influence auditors in determining RMM: 1) encourage an increase in personnel capabilities, 2) increase in skill abilities, and 3) self-awareness of the ability to carry out duties and responsibilities. Then the individual factors that can influence the determination of the Auditor's RMM include: 1) understanding of culture and governance, 2) determination of risk, 3) potential and human resources owned by the auditor. On the other hand, cultural factors in the field of auditing that influence auditors are less critical or profound, contributing factors that do not genuinely accept the distribution. Originality/Value: This paper focuses specifically on the auditor’s cognitive performance – the auditor’s ability to make normatively correct inferences about testing hypotheses in the course of the audit.

Pengaruh Independensi Auditor, Profesionalisme, Dan Pemahaman Good Governance Terhadap Kinerja Auditor Pada Kantor Akuntan Publik Di Bali

The auditor's performance is the implementation of the inspection task that has been completed by the auditor with full responsibility in an effective and efficient manner. To improve the performance of the auditor, it is necessary to have a professional attitude owned by the auditor himself. The problems raised in this study are how does the influence of auditor independence (X1) on auditor performance (Y), how does professionalism influence (X2) on auditor performance (Y), and how does the understanding of good governance (X3) influence auditor performance (Y) in Accounting firm in Bali. The population of this study includes auditors who have worked in 15 accounting firms in Bali, totaling 107 people. The number of research samples used was 69 respondents. The data analysis technique used is multiple linear regression analysis. Analysis results of multiple linear regression equations Y = 11.184 + 0.444X1 + 0.118X2 + 0.131X3. The obtained conclusion is that auditor independence (X1) has a positive and significant impact on the efficiency of auditors of accounting firms in Bali, as shown by the regression coefficient β1X1 having a positive value. . Professionalism (X2) has a positive and significant effect on auditors' performance in an accounting firm in Bali, as indicated by a positive value of the regression coefficient β2X2. Understanding of good governance (X3) has a positive and significant impact on the performance of auditors of accounting firms in Bali, as indicated by a positive value of the regression coefficient β3X3.

Factors that Influence Auditor Switching in Banks Listed on the BEI

The aim of this research is to examine the impact of going concern audit opinion, financial distress, company complexity, institutional ownership, and company size on auditor switching. And in this research we also added a moderating variable, namely audit fees, to test the role of audit fees in moderating the relationship between factors that influence auditor switching. This research focuses on bank companies listed on the Indonesia Stock Exchange in 2019-2022. The data collection technique uses a purposive sampling method with a total of 164 data, taken from 41 banks listed on the Indonesia Stock Exchange. This research uses multiple linear regression analysis techniques and interaction tests or MRA (Moderated Regression Analysis). This calculation analysis was carried out with the help of SPSS software. The research results show that going concern audit opinion has a positive effect on auditor switching, while company complexity has a negative effect on auditor switching. However, factors such as financial distress, institutional ownership and company size have no influence on auditor change. Apart from that, the size of the audit fee does not moderate the relationship between the factors that influence a company's decision to change auditors.

Are Auditors Biased? The Effect of Anchoring and Adjustment Heuristics on Auditors’ Judgment

Objective –The objective of this paper is to illustrate one of the crucial factors that affect auditors in making their judgment which can lead to systematic error. This paper provides background on how heuristics and biases can affect the judgment of auditors to increase the awareness of the anchoring and adjustment heuristic on audit judgment.Methodology –This research is a 2 x 2 experimental study which analyzes the employment of anchoring and adjusting bias of auditor in the process of making their audit judgment. This research employed three (3) experimental questions on 100 auditors in Surabaya, Indonesia, with experiences ranging from 0-8 years.Results –The result indicates that is evident that anchoring and adjustment heuristic exist and affect auditors’ judgment. The findings also indicates that experience influence auditors’ judgment whereas gender does not have such effect on auditors’ judgment. However, experience and gender can moderate the effect of anchoring and adjustment heuristic on auditors’ judgment.Research limitations/implications –The experimental questions used were simplified abstractions compared to the complex analytical reviews auditors typically encounter. Additionally, the sample size, consisting of 100 auditors, may limit the generalizability of the findings. The study exclusively focused on differences in auditor judgment influenced by anchoring and adjusting, without exploring potential contributions from other heuristic factors. Lastly, gender was categorized broadly as male and female, without further differentiation based on specific gender characteristics.Novelty/Originality –Its originality lies in adding moderation variable of gender and experience. While prior research has explored the impact of behavior on audit judgment to enhance decision-making in auditing, none have investigated anchoring and adjustment heuristics while considering the moderating factors of gender and experience.

How Does Management Voluntary Disclosure Behavior Influence Auditors’ Judgments?

ABSTRACTForward‐looking information, often used by auditors to evaluate complex estimates and form conclusions about going‐concern audit report modifications, is commonly disclosed voluntarily by U.S. public companies. We experimentally examine how this disclosure behavior affects auditors’ skepticism toward such information. Prior research has shown that investors and analysts frequently interpret voluntarily disclosed forward‐looking information as credible. We demonstrate that auditors, in contrast, exhibit greater skepticism toward forecasted information that has been voluntarily disclosed (vs. mandatorily disclosed or held privately) because of their reduced trust in management, even when the forecasts align with prior year trends (vs. being more optimistic). Our results suggest that a manager's decision to disclose, rather than the disclosure content itself, leads to increased auditor skepticism. Our findings have implications not only for audit outcomes, but also for manager disclosure behavior, as increased auditor scrutiny could discourage future voluntary disclosure.

Auditor’s response to firm’s environmental violations and engagement in supplemental environmental projects

Purpose In this study, the authors investigate a pressing concern: how auditors react to their clients facing repercussions due to environmental violations. More specifically, this study aims to examine how environmental engagements, which carry potential risks and liabilities, influence auditors’ decision-making and fee structure. Design/methodology/approach This study uses unique, reliable and actual violation data from the United States Environmental Protection Agency (US-EPA) from 2000 to 2015, focusing on clients involved in environmental violations that led to legal prosecution and penalties and those who subsequently engaged in voluntary supplemental environmental projects (SEPs). The authors use the ordinary least squares method to test the authors’ main research question and later use propensity score matching and alternate data source (ASSET4) to check the robustness of the authors’ results. Findings The authors find that firms with environmental violations are more susceptible to auditor resignation. Moreover, the environmental violator firms that maintain their engagement with auditors pay significantly higher audit fees compared to non-environmental violator firms. Furthermore, these environmental violator firms also face extended audit report delays and take longer to appoint a new auditor. Originality/value This study provides an additional consequence of environmental violations, namely, increased chances of auditor resignation and higher audit fees, alongside the penalties imposed by the US-EPA. Moreover, the authors’ findings position environmental violations and participation in SEPs as important factors in auditors’ business risk assessment.

Analysis of The Factors That Influence Auditor Switching in Bank Companies Listed on The Indonesian Stock Exchange in 2017-2021

Auditor switching is a change of KAP or auditor made by the company for a reason or there are certain factors from the company and from the auditor itself. Auditor Switching in Indonesia is one of the regulations required by the Indonesian government as an effort to maintain auditor independence. This study aims to analyse the effect of audit opinion, institutional ownership, management change, and financial distress on auditor switching. The results of this study reveal several important findings. First, Audit Opinion has an insignificant influence on auditor switching this is because in general the sample of banking companies mostly get an unqualified opinion. Second, Institutional Ownership has an insignificant influence on auditor switching because the high proportion of institutional ownership in a banking company does not guarantee auditor switching. Third, Management Change has a significant influence on auditor switching because management wants a KAP that can meet management's needs in managing the company. Finally, Financial Distress has a significant influence on auditor switching because when a company experiences financial distress, the company will make a change of KAP. The potential bankruptcy experienced by the company causes company management to try to prevent bankruptcy which results in liquidation.

ENVIRONMENTAL AUDIT, AS THE MAIN TOOL FOR IMPROVING AND PROTECTING THE ENVIRONMENT

Environmental concerns are getting more evident in the context of establishing commercial links. In particular, the nature users themselves, governmental institutions, and private and public organizations that exert control have the challenge of determining the extent of harm done to it and the likelihood of such damage. The primary goal of the study is to clarify how, while upholding the idea of sustainable development, the environmental audit helps to preserve and improve the environment. Because of this, one of the three worldwide strategies for determining and creating the environmental audit was applied. After reviewing the pertinent and readily available domestic and international literature, conclusions about the environmental audit's influence on environmental protection and improvement were reached. The findings of the research indicate a clear link between environmental audit requirements and environmental improvement as well as pollution. The research findings will be put into practice by developing precise suggestions to minimize pollution and increase environmental protection. The study’s significance stems from the authors’ definition of the prerequisites for the creation and formulation of an environmental audit for environmental improvement and protection purposes.

Intimidation and Information Repetition: How Client Behaviors Influence Auditor Judgments

Intimidation and Information Repetition: How Client Behaviors Influence Auditor Judgments

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.

Auditors’ Responses to Real Earnings Management: The Effects of Timing and Potential Consequences on Auditor Decision-Making

ABSTRACT In this study, we investigate whether the timing and the potential consequences of a transaction influence auditors’ decisions regarding real earnings management (REM). Based on the results of an online experiment with 159 certified public accountant (CPA) participants, we find that the timing of a transaction acts as a signal of management’s intent that auditors use to infer REM. While the timing of the transaction helps auditors identify REM, whether auditors take confrontational actions (i.e., actions taken by auditors to confront a client for the final resolution of an REM issue) also depends on their evaluation of the transaction. We find that auditors are more likely to take confrontational actions when the transaction occurs at the end of the reporting period and is likely to result in more severe negative consequences to the firm’s future operations.

PENGARUH PROFESIONAL AUDITOR TERHADAP KUALITAS AUDITOR

This study aims to see how the influence of professional auditors on the quality of auditors. Reports that can be trusted with good audit quality reduce fears of manipulation in the financial statements presented a company and can increase public confidence in the reliability of reports financial statements that have been audited by a public accountant. Findings in research that the professionalism of the auditor agrees to be implemented. This can be seen from the acquisition % auditor professionalism score of 72.40%. Furthermore, the findings about quality audit that the overall quality of the audit agrees to be carried out. Then that quality can build the credibility of information and quality of financial reporting information can help users to get useful information., this can be seen from the acquisition of % audit quality score of 75.11%. To see professional influence auditor on auditor quality is calculated using the SPSS program, with a value correlation coefficient of 0.538, this means that there is a relationship between auditor professionalism on audit quality. Correlation coefficient of 0.538 are in the medium category (0.40 - 0.5999). Next, the sig. = 0.02 less than 0.05 this shows that there is a significant relationship between auditor professionalism on audit quality. From the correlation table it is found that the value of p. value of 0.000 is below 0.05 this shows that even though the correlation coefficient is 0.538gives a moderate effect but based on statistical tests that there is a significant effect significant of the auditor's professionalism variable on audit quality Keywords : Professional Auditor, Quality Auditor

How Does Management Voluntary Disclosure Behavior Influence Auditors’ Judgments?

How Does Management Voluntary Disclosure Behavior Influence Auditors’ Judgments?

Do auditors account for firm‐level political risk?

We examine whether firm‐level political risk influences auditor behaviour. Using a text‐based political risk measure, we find that firms subject to higher levels of political risk face longer audit report lags, are more likely to have going‐concern opinions issued by their auditors and pay higher audit fees. However, the effect of political risk on audit outcomes becomes moderated in the presence of higher lobbying efforts. Our findings suggest that political risk and lobbying efforts to mitigate such risk both influence auditors' judgments in planning audit services. Our original findings survive in a battery of robustness checks, and the primary results do not change when we use an exogenous political shock as an alternative proxy for firm‐level political risk.

Do Organizational Commitment and Work Stress Moderated by Locus of Control Influence Auditor Performance? Evidence from Banking Institution

AbstractObjective – This study aims to determine the effect of organizational commitment and work stress on auditor performance with locus control as a moderating variable in a banking institution.Design/methodology – The population and sample in this study were all internal auditors spread across all branch offices at Bank Sejahtera, totaling 33 people. Sources of data using primary data derived from distributing questionnaires to research respondents.Results – The results showed that the variables of organizational commitment, job stress, and locus of control simultaneously affect the performance of internal auditors. Then, organizational commitment has a positive effect on the performance of internal auditors. Furthermore, work stress has a negative effect on auditor performance. Locus of control has a positive effect on the performance of internal auditors. Next, locus of control strengthens the relationship between organizational commitment and internal auditor performance. Likewise, locus of control also strengthens the relationship between job stress and the performance of internal auditors.Research limitations/implications – This study is only conducted at one state-owned bank in Banda Aceh. Implementation at different banks with different management styles may show different results.Novelty/Originality – This research provides an empirical analysis about locus of control’s role in strengthening the relationship between organizational commitment and internal auditor performance as well as the relationship between job stress and the internal auditor performance.

Auditor independence in post-reform China: A neo-Durkheimian approach

This study builds on the work of Durkheim (1915) by applying a neo-Durkheimian theoretical framework to audit failure in China following the implementation of economic reform and international auditing standards to highlight how embedded cultural norms, such as guanxi (a social network system involving the mutually beneficial and reciprocal exchange of personalised favours), limit adaptation and influence auditor independence. Specifically, this study adopts the grid-group dimensions proposed by Douglas (2003) to assist in understanding how Chinese auditors interpret their social relations based on cultural beliefs and overlaid them with characteristics of Chinese culture to demonstrate the influence of guanxi. The study is based on publicly available data focusing on the financial scandals of Yin Guang Xia (YGX) and Yunnan Green Land Biological Technology (Green Land) in China. We argue that Chinese auditing failure occurred because of socially embedded cultural values which limited thought processes and prevented adherence to formal international auditing standards. Policymakers and regulators must consider emerging economies’ unique cultural environments when introducing economic reform. Different cultural contexts call for different interventions by a range of stakeholders to improve audit independence. The neo-Durkheimian (NDT) theoretical framework used in this study may be extended to examine auditing practices in other emerging economies across a range of cultures, and may also be relevant to other areas of professional practice

How Does an Audit or a Forensic Perspective Influence Auditors' Fraud-Risk Assessment and Subsequent Risk Response?

SUMMARY This study examines whether priming auditors with a forensic perspective improves their fraud-risk assessments and subsequent audit-plan responses. We contribute to the literature by investigating a potential improvement in fraud detection that encourages auditors to take a forensic specialist's perspective, while retaining the audit tenets of efficiently identifying and responding to risk. We prime auditors with a forensic perspective and compare their fraud performance to unprimed auditors in both low- and high-risk contexts, finding primed auditors assess fraud-risk significantly higher in all fraud-risk environments. In a high-risk environment, primed auditors propose a more appropriate audit-plan response. Relevant to fraud detection, these audit-plan modifications were consistent with those determined by a panel of audit and forensic experts. They exhibit a sensitivity in the low-risk environment, whereby their risk response is similar with that of the unprimed auditors. Data Availability: Data are available from the authors on request.

Does Corporate Citizenship Influence Auditors’ Perceptions of the Credibility of Management in Relation to Financial Reports?

This paper examines whether the distributional fairness dimensions of corporate citizenship influence auditors’ assessments of source credibility in relation to financial reporting, as reflected in audit fees. Grounded in the traditional view of corporate citizenship as social contributions that reflect distributional fairness, the analysis uses three measures that are not widely considered in the corporate social responsibility literature: tax fairness, wage fairness and philanthropy. We obtain robust evidence that tax fairness and philanthropy, and some evidence that wage fairness, are negatively related to audit fees. It appears that the philanthropy effect may be dominated by domestic philanthropy. Overall, the results are consistent with the proposition that auditors attach more credibility (or less risk of misstatement) to management assertions when a corporation demonstrates a higher level of corporate citizenship in terms of distributional fairness.

Auditor ethics: do experience and gender influence auditors’ moral awareness?

PurposeThe purpose of this paper is to examine how experience and gender relate to the auditors’ moral awareness.Design/methodology/approachHypotheses are informed by a neurocognitive approach to ethical decision-making and tested using survey data from 191 auditors of a Big Four audit firm in The Netherlands.FindingsThe main findings indicate that more experienced auditors (i.e. those with more years of work experience, a higher rank and a higher age) show higher levels of moral awareness. This positive relationship is stronger for morally questionable situations related to accounting and auditing, compared to general business moral dilemmas. In addition, the results support the expectation that on average, female auditors have higher moral awareness than their male counterparts.Originality/valueTo the knowledge of the authors, this is the first study that considers a neurocognitive approach to inform hypotheses about the antecedents of auditors’ moral awareness. The findings suggest that the involvement of experienced auditors in ethical decision-making processes may be beneficial given their enhanced ability to identify ethically disputable situations as such. Furthermore, increasing the number of women in senior positions may positively affect ethical decision-making in audit firms. Finally, this paper presents directions for future research.