Professional Skepticism Research Articles

Professional Scepticism, Independence, Information Technology, Auditor Competence, And Audit Quality

Purpose: This study aims to obtain empirical evidence regarding the effect of professional scepticism, independence, information technology, and auditor competence on audit quality. Methodology/approach: This study uses a quantitative approach with primary data in the form of questionnaires. Respondents of this study were 68 auditors of BPK RI Representative of Riau Province. Regression analysis using the PLS-SEM method. Findings: The results showed that professional scepticism and BPK auditor competence significantly positively affected BPK audit quality. Other results show that independence and information technology do not significantly affect BPK audit quality. Practical implications: These results provide a new understanding of independence and information technology in conducting audits in the public sector. Although BPK is an external auditor for all government agencies, the income of BPK employees or auditors comes from the government, so independence is not quite appropriate to be pinned on BPK auditors. Still, the objective attitude of each BPK auditor in carrying out audits at government agencies must be improved. Originality/value: These results contribute to the development of literature on the determinants of audit quality.

Who Rewards Appropriate Levels of Professional Skepticism?

Who Rewards Appropriate Levels of Professional Skepticism?

Enhancing audit quality in non-Big 4 firms: the role of remote auditing and audit staff capabilities

Purpose The purpose of this study is to explore the impact of remote auditing on audit quality in non-Big 4 firms in Jordan. It also examines the role of auditors’ capabilities in this relationship, emphasizing their importance in implementing this technology effectively. Design/methodology/approach The perspectives of non-Big 4 audit firms regarding the influence of remote auditing on audit quality were gathered through the administration of a comprehensive questionnaire. Findings This study demonstrates that remote auditing can enhance audit quality in non-Big 4 firms. The strength of this effect is bolstered by the auditor’s technical knowledge, communication skills and professional skepticism. Practical implications Remote auditing is a promising alternative to traditional methods for non-Big 4 firms, with significant implications. Effective remote audits require technical knowledge, communication skills and professional skepticism. To succeed, firms must invest in training programs that equip auditors with the necessary remote auditing techniques. Originality/value This groundbreaking study investigates the effects of remote auditing on audit quality in Jordanian non-Big 4 firms and examines the influence of auditors’ capabilities. Results show that auditors’ capabilities enhance the positive impact of remote auditing on audit quality.

The moderating role of professional commitment in the relationship between time budget pressure and sustainable audit quality: The mediating role of professional skepticism

The study aimed to identify the relationship between time budget pressure and the quality of external auditing in the Jordanian environment through the mediating role of professional skepticism. The moderating role of external auditors' professional commitment in this relationship was tested. The study population consisted of certified Jordanian accountants. 234 questionnaires were distributed to the respondents. The study indicated that certified Jordanian accountants are subject to a high level of pressure, in addition to having a high level of audit quality and professional skepticism, and they are professionally committed. The results of the analysis also indicated that high professional skepticism affects the quality of the external audit and that there is an impact of time budget pressure on the quality of the audit, as the pressure of deadlines for preparing audit reports reduces the level of professional skepticism practiced by external auditors in Jordan. The results also indicated that auditors' professional commitment moderates the relationship between time budget pressure, the level of professional skepticism, and audit quality. Interestingly, there is no moderating role for professional commitment in the relationship between professional skepticism and the quality of external auditing in Jordan. This study emphasizes the need for auditors to maintain professional skepticism when exposed to pressures, including time budget pressure, in order to produce high-quality audit reports.

The Influence of Competency, Independence, Professional Skepticism on Fraud Detection on Financial Statements in The Regional Government of West Java Province

The research aims to determine the influence of competence, independence and skepticism on fraud detection. The research method used was explanatory research, the research population was active auditors/examiners at the BPK RI Representative of West Java Province with a sample size of 80 people. The analysis used uses multiple linear regression tests, coefficient of determination tests and hypothesis tests. The research results show that examiner competency influences fraud detection in local government financial reports which shows that the examiner has good competence. The independence of examiners influences fraud detection in regional government financial reports. This shows that the independence of auditors at BPK RI West Java Province Representative is considered good but needs to be improved to be better. The professional skepticism of auditors in conducting audits influences fraud detection in regional government financial reports which are assessed. Good, although it still needs to be improved to be better.

Beyond the numbers: assessing the risk of management motives for fraud in external audits

PurposeThe purpose of this study is to explore how the risk of management motives for fraud can be assessed in external audits.Design/methodology/approachSemi-structured interviews were conducted with 26 experienced external auditors to explore their perspectives on the methods they employ to assess the risk of management motives for fraud.FindingsThe study identifies six methods external auditors can use to assess management motives for fraud. It emphasises that assessing management motives requires auditors to go beyond understanding these motives and necessitates a sceptical and analytical mindset. Auditors need to identify the accounts most vulnerable to management manipulations, observe management attitudes and assess the credibility of management assertions. The auditors in this study highlight specific accounts frequently manipulated by management. Still, manual year-end journal entries are the most vulnerable to management manipulations as they are subject to fewer controls. They recommend increasing the sample size to 100% and assigning more experienced staff, particularly, those with qualifications in fraud examination or anti-fraud training, to audit these vulnerable accounts thoroughly. They also provided examples of how auditors can identify management motives for fraud, observe management attitudes and assess the credibility of management assertions.Practical implicationsAudit standards (e.g. ISA 240, SAS99) lack explicit guidance on assessing management motives for fraud, but auditors are required to consider it in fraud risk assessment. This study proposes guidance recommendations to improve auditors' ability to assess this risk, which could be integrated into professional audit standards and training materials to improve auditors' professional scepticism, ability to challenge management and skills in fraud risk assessment.Originality/valueAssessing the risk of management motives for fraud in external audits has received limited attention in the literature. To the best of the authors’ knowledge, this study is the first to address this knowledge gap.

Professional Scepticism, Auditor Experience, and Self-efficacy on Audit Judgement

In the performance of all audit tasks, auditors must adhere to pre-determined standards. In Indonesia, there have been cases of fraud related to auditors, including the case of fraud at SNP Finance in 2018. Such situations can arise due to incorrect audit judgment. Factors that may impact audit judgment include professional skepticism, auditor experience, and self-efficacy. A quantitative approach is used in this research. The study population consisted of auditors at public accountant firms in Bandar Lampung. During data collection, questionnaires were administered directly to external auditors. The data were analyzed using SmartPLS. The study revealed new evidence suggesting that professional skepticism only has a limited effect on aiding auditors in their audit judgments, even when combined with extensive auditor experience. This limitation can occur when the auditor has a short working period. Conversely, self-efficacy has been shown as a beneficial factor in helping auditors make well-informed audit decisions. Keywords: professional skepticism, auditor experience, self-efficacy, audit judgment

Pengaruh Skeptisme Profesional, Independensi Dan Pengalaman Auditor Terhadap Kemampuan Auditor Dalam Mendeteksi Kecurangan

This study to examine the effect of professional skepticism, Independence and auditor experience afecct auditor’s ability to detect fraud at Public Accounting Firm in Pekanbaru city. The sample used are 55 auditors. The sample in this research was determined by the method sensus sampling technique. The research method used was quantitative. Data were collected using questionnaires. Data analysis technique used is Multiple Linear Regression Analysis. The results show that partially professional skepticism and Independence have significant effect on auditor’s ability to detect fraud. Auditor experience has no significant effect on the auditor's ability to detect fraud. Professional skepticism, Independence, and auditor experience simultaneously have a significant effect on the auditor's ability to detect fraud.

How does movie foster experiential learning in auditing education?

PurposeThis study explores virtual platforms’ capabilities, particularly emphasising the influence of educational movies embedded with lifelike narratives to serve as a potent medium for immersive learning within the auditing discipline. Through this exploration, we aim to discern how cinematic depictions can educate and encapsulate the intricate dynamics of real-world auditing scenarios, thereby enriching the educational experience for budding auditors.Design/methodology/approachBy employing an action research methodology, this study engaged 134 auditing students from China in an experiment, using a questionnaire to assess their grasp of auditing concepts like internal control, corporate governance, and professional ethics.FindingsPreliminary findings underscore the efficacy of movies as pedagogical tools. These movie experiences bridge the gap between theoretical knowledge and its real-world application, particularly highlighting the nuances of professional ethics and corporate governance. Results show that such a method amplifies students’ comprehension of auditor skillsets, practical complications, and ethical insight and nurtures professional scepticism about tangible audit issues.Research limitations/implicationsThis study illuminates a novel virtual learning approach using movies that primes students to exercise critical thinking and augments cognitive skillsets, especially when navigating ethical conundrums. The broader implication is the potential enhancement of auditing education quality in China, presenting educators with an innovative teaching modality that bolsters students’ critical analysis and cognitive development.Practical implicationsThis study has multiple implications for auditing education policy. It underscores the imperative need for curriculum revision in contemporary auditing education. Our study can significantly change contemporary auditing education by incorporating movie-based experiential learning. Educators and institutions in China and other parts of the world explore this avenue, customising it to fit the unique requirements of their respective courses and the country’s contexts. Our study also highlights the challenges and recommendations for real-world audit simulation for auditing education. While our research highlights the promise of educational movies, it also sheds light on the potential difficulties in their integration. Audit educators need adequate support and training for effective assimilation, ensuring they leverage educational movies to maximise learning outcomes. Careful curation and selection of movies, combined with strategic planning, are paramount to this teaching method’s success. With the continual evolution of video tools, there is an opportunity for a more immersive and holistic education model, shaping the next generation of auditors.Originality/valueThis study offers insights into innovative strategies to imbue real-world experience into traditional curricula, ensuring relevance and applicability across diverse educational landscapes.

Managing Earnings Management: A Framework of Standards, Governance and Ethics

Manipulating earnings to superficially represent financial reports is a flagrant violation of management's assertions about the fairness of financial statements. Therefore, auditors have developed objectives to counter management assertions to ensure that financial reporting is credible and free from earnings management practices (EMP).  This study examines the role of an integrated system of auditing standards and corporate governance surrounded by a framework of ethical values and principles in reducing EMP through the use of a sequential explanatory mixed method. Through this approach, the results obtained from 131 surveys were used as input for the interviews to add a more in-depth understanding of this phenomenon and find fruitful ways to reduce EMP. The results revealed that management's assertion on “accuracy, valuation and allocation” was most involved in EMP, thus, requiring a high degree of exercising professional skepticism. While “objectivity” was the ethical principle most respected by auditors, the results showed that the most serious threat to auditor independence that poses a challenge to the audit profession is the threat of intimidation. Moreover, the study showed that exercising the supervisory role in holding management accountable and following up on the work of auditors to uncover EMP requires real independence of the audit committee from the executive members. The findings have implications for economic policymakers in emerging countries where the sustainability of the audit profession and public companies is critical to economic development and stability. The study provides insights and guidance in mapping corporate governance for the future and benefiting from the experiences of developed countries as outlined in the study’s conclusion.

Skeptisisme Profesional Auditor dari Sudut Pandang Filsafat Jawa “Ojo Dumeh, Eling lan Waspodo”

This study aims to explore and analyze auditors' professional skepticism through the lens of Javanese philosophy, specifically the concepts of "Ojo Dumeh, Eling, and Waspodo." Professional skepticism, as the critical and cautious attitude of auditors in performing their duties, is linked to the values and teachings in Javanese philosophy to understand how these principles can enrich and deepen audit practice. The study's findings suggest a striking alignment between the ethos of audit professional skepticism and the Javanese philosophical concept of Ojo Dumeh, Eling lan Waspodo. In essence, audit professional skepticism embodies a mindset of critical inquiry and careful evaluation, mirroring Ojo Dumeh's call to avoid easy acceptance and instead verify information rigorously. The concept of Eling, emphasizing mindfulness and awareness, resonates with auditors' need for meticulous attention to detail. Likewise, Waspodo's emphasis on caution and prudence echoes the fundamental approach of auditors to exercise skepticism and maintain a cautious stance in their assessments. This correspondence underscores the universal value of critical thinking, careful scrutiny, and mindful deliberation across cultural and professional domains.

Auditor's Ability to Detect Fraud

This research aims to find out whether professional skepticism, independence and competence influence fraud. The population and sample for this research are auditors who work at the South Sulawesi Inspectorate Office. The sampling technique uses purposive sampling technique. The sample in this study was auditors who worked at the South Sulawesi Inspectorate Office. The data collection method uses a questionnaire. The research questionnaire uses a Likert scale. Data analysis used multiple linear regression analysis using Statistical Packages for Social Science (SPSS). The research results show that skepticism, independence, competence and experience of auditors have a positive and significant effect on fraud at the South Sulawesi Inspectorate Office

Exploratory Factor Analysis for Items Measuring of The Tax Auditors’ Performance

Tax auditors play an essential role in tax audits to ensure governments can overcome non-tax compliance issues and protect tax revenues for the nation. Tax auditors are expected to perform their tasks efficiently and effectively in examining the taxpayer’s declaration. The tax auditors' performance determines the success of tax audit implementation. Several factors can influence the tax auditors’ performance, including auditors’ effort, professional skepticism and task complexity. Therefore, this study aims to develop a valid and reliable research instrument to measure tax auditors’ performance using the Exploratory Factor Analysis and internal reliability test (Cronbach’s Alpha). A total of 100 tax auditors from the Inland Revenue Board of Malaysia and the Royal Malaysian Customs Department were selected as respondents to participate in this study. The data was collected using the online Google Forms with 5 Likert scales and was analysed using IBM-SPSS Version 27. The results show that out of 34 developed items, only 30 remained as constructed items. The remaining items were deleted due to the low loading factor of less than 0.40. Thus, this study validated the research instrument to proceed with the Confirmatory Factor Analysis (CFA) in the following step using the validated research instrument.

Expanding The Scope of Professional Skepticism in Qatar: Developing an Arabic Hurtt Scale and Examining Influential Factors among Accountants

Expanding The Scope of Professional Skepticism in Qatar: Developing an Arabic Hurtt Scale and Examining Influential Factors among Accountants

DETERMINAN IN FRAUD DETECTION

This study aims to find out how the factors possessed by an auditor are professional skepticism, independence and competence in fraud detection. The research methods used in this study are descriptive and verifiable methods with a quantitative approach. The population in this study are 139 auditors who works in the 13 public accounting firms in Bandung. The sample used in this study amounted to 40 auditors with sample collecting techniques using the non-probability sampling technique with the method used purposive sampling which means the sampling technique is based on certain criteria. Data analysis methods in the study use linear regression, determinations, corelation coefficiencies, and hypothesis testing with the help of SPSS 23.0. Results have shown that professional skepticism, independence and competence have a positive and significant impact on fraud detection. Keywords: Professional Skepticism, Independence, Competence, Fraud Detection

Enhancing Fraud Detection Capacities: The Role of Auditor Training, Professional Skepticism, and Integrity in Government Internal Control Mechanisms in Indonesia

Purpose: This research exploration the impact of auditor experience, training, professional skepticism, and integrity on fraud detection abilities. Method: This research uses a quantitative method to collect data and analyze the relationship between auditor experience, training, professional doubt, and integrity on the ability to detect fraud. The study population consisted of internal auditors at the Selayar Islands Regional Inspectorate Office, Jeneponto, and Takalar, South Sulawesi Province, Indonesia. From this population, n=53 was taken as a sample using a purposive sampling technique. Result and Conclusion: The findings, obtained through multiple regression analysis, reveal that while experience does not significantly affect fraud detection, training, auditor skepticism, and integrity have a notable impact. Specifically, training and the auditor's professional skepticism are crucial in enhancing fraud detection capabilities, with integrity showing a robust influence. Implication of the research: The contribution this research for government make a valuable contributions to formulating anti-corruption policies. It is important to emphasize the need for transparency and accountability in government practices, as well as focused auditor training in developing nations. Originality/value: The novelty of this research lies in examining the combined impact of auditor experience, training, professional skepticism, and integrity on fraud detection abilities within the specific context of government internal auditors in developing nations.

Artificial intelligence in accounting

Artificial Intelligence (AI) technologies open up broad horizons for enhancing business efficiency and advancing various professional domains, boosting their productivity and compe­titiveness. There is an active exploration of approaches to incorporating AI technologies in the accounting sphere, promising a seamless transition from human to machine involvement. The aim of this article is to summarize the acquired experience, identify perspectives, constraints, and risks associated with the use of AI technologies in the professional activities of accountants. The research is based on the hypothesis that widespread use of AI in the professional activity of an accountant with an insufficient level of professional skepticism and caution carries significant threats and risks for both the accountant and the business as a whole. Scientific search methods, comparative and critical analysis, theoretical generalization, and synthesis were used. A prerequisite for imple­menting AI technologies in accounting is expert information systems and ERP systems. The analysis of AI technology implementation experience in various industries demonstrates their relevance in the accounting field for performing routine tasks (automated recognition of primary documents, processing incoming signals, and other standard operations with a simultaneous reduction in the probability of errors), analyzing large datasets, and providing information support for decision-making (pro­ces­sing business data and regulatory docu­ments), training professionals, and organi­zing internal and external communication (parti­cularly between humans and machines). Identi­fied potential risks include breaches of privacy and data security, misinterpretation of output data, and the disregard of activity context, external and internal environments, especially due to the absence of emotional intelligence, which influences the trust level in integrated information systems. The requirement for the application of professional assessments and judgments, mandated by regulatory documents, limits the scope of AI technology utilization in accounting. Future research should focus on exploring the possibilities of widespread integ­ration of AI technologies in information systems for accounting and improving legislation based on the principle of risk assessment.

Whistleblowing, Morality, Good Corporate Governance, The Role of Accountant as A Moderation Variable to Fraud Intention

Purposes - This study aims to investigate the problem solved and resolved by accountants in the country of Indonesia with various educational backgrounds, the scope of business, and experience in their job to examine fraud intention, with the whistleblowing system as a trigger and other variables like good corporate governance, Morality, the role of the accountant as additional variable moderate provides insights on the moderating effect to fraud intention. Design/methodology/Approach - Data was gathered using a questionnaire survey involving 291 respondents with accountant backgrounds. This study used quantitative research with smart pls 3.3 .3 and also the grand theory of agency theory and fraud triangle theory as a guide to conclude this study. Findings - The results show that there is a positive relationship between morality, Whistleblowing system, and Good Corporate Governance, to fraud intention. The moderate variables provide partial support that the role of accountants has a positive significant impact with good corporate governance to the fraud intention. Research limitation/implications - The role of accountants in moderating whistleblowing against fraud in the future should be added with other dimensions such as professional skepticism, competence, and perceived behavior. Practical implications – this study contributes to the development of ideas to reduce fraud intention through critical studies of any variables including whistleblowing, Good Corporate Governance, Morality, also the role of accountants. Social Implications – this study argues that consistently by the major of morality personal is a must behave in a social environment, especially in the organization of a company or other society. Originality/Value – this study uses the role of the accountant as a proxy to contribute to the analytical fraud diamond theory. There is limited implication between whistleblowing the fraud intention because whistleblowing depends on practically system good corporate governance.

The Influence Of Professional Skeptism, Independence, Audit Fee, And Remote Audit Process On Auditor Performance

This study aims to analyze how much influence professional skepticism, independence, audit fees and remote audit processes have on auditor performance. The population in this study is KAP in Surabaya and Malang, 60 responden. The sampling method used in this study are saturated samples. Collecting data in this study by distributing questionnaires to respondents. The samples used in this study were 60 auditors who worked in 11 Public Accounting Firms (KAP) in the cities of Surabaya and Malang. The analytical method used is multiple linear regression analysis and processed using SPSS version 25. The results of this study indicate that partially professional skepticism and audit fees have a significant effect on auditor performance. Meanwhile, independence and the remote audit process have no significant effect on auditor performance. Simultaneously, professional skepticism, independence, audit fees and remote audit processes have a significant effect on auditor performance. This research is in accordance with auditing theory and has implications for how auditors' performance in KAP is more skeptical and independent, so that it can help auditors to be more vigilant in detecting fraud.

PENGARUH KOMPETENSI, INDEPENDENSI, DAN SKEPTISME PROFESIONAL TERHADAP KEMAMPUAN AUDITOR MENDETEKSI KECURANGAN

This research aims to see the effect of competence, independence, and professional skepticism on the auditor's ability to detect fraud. This research was conducted using a literature study method obtained from theoretical studies and relevant previous research. The results of this literature study research indicate that competence has a positive effect on the auditor's ability to detect fraud, independence has a positive effect on detecting fraud in auditors, and professional skepticism also has a positive effect on the auditor's ability to detect fraud.