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1
Sari, Dea Nurfika, and Haryanto Haryanto. "ANALISIS DETERMINAN EFEKTIVITAS AUDITOR INTERNAL PADA INSPEKTORAT PROVINSI DAERAH ISTIMEWA YOGYAKARTA." JURNAL AKUNTANSI DAN AUDITING 13, no. 2 (December 1, 2016): 191. http://dx.doi.org/10.14710/jaa.13.2.191-210.
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The aims of this study is to examine factors that affect (determinants) internal audit effectiveness in the public sector, Inspectorate office at Province Special Region of Yogyakarta. This study is a replication of the research that has been done by Alzeban and Gwilliam in Saudi Arabia. There are 4 (four) independent variables that affect internal audit effectiveness as dependent variable. There are competence of internal auditor, the relationship between internal and external auditor, auditee support to internal audit activity, and independence of internal auditor. The population in this research is 51 internal auditor working in Inspectorate office at Province Special Region of Yogyakarta. This study uses primary data in the form of questionnaire. All of questionnaire can be processed. The datawere collected were processed using PLS analysis with SmartPLS 3 program. Statistical tests showed that three of four independent variables, there are the competence of the internal auditor, the auditee support and the independence of the internal auditor affect the effectiveness of the internal audit. while relationship between the internal auditor with the external auditor does not affect the internal audit effectiveness Keywords: Internal auditor effectiveness, competence of internal auditor, relationship between internal and external auditor, auditee support to internal audit activity, independence of internal auditor.
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Sari, Dea Nurfika, and Haryanto Haryanto. "ANALISIS DETERMINAN EFEKTIVITAS AUDITOR INTERNAL PADA INSPEKTORAT PROVINSI DAERAH ISTIMEWA YOGYAKARTA." JURNAL AKUNTANSI DAN AUDITING 13, no. 2 (December 1, 2016): 191. http://dx.doi.org/10.14710/jaa.v13i2.13871.
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The aims of this study is to examine factors that affect (determinants) internal audit effectiveness in the public sector, Inspectorate office at Province Special Region of Yogyakarta. This study is a replication of the research that has been done by Alzeban and Gwilliam in Saudi Arabia. There are 4 (four) independent variables that affect internal audit effectiveness as dependent variable. There are competence of internal auditor, the relationship between internal and external auditor, auditee support to internal audit activity, and independence of internal auditor. The population in this research is 51 internal auditor working in Inspectorate office at Province Special Region of Yogyakarta. This study uses primary data in the form of questionnaire. All of questionnaire can be processed. The datawere collected were processed using PLS analysis with SmartPLS 3 program. Statistical tests showed that three of four independent variables, there are the competence of the internal auditor, the auditee support and the independence of the internal auditor affect the effectiveness of the internal audit. while relationship between the internal auditor with the external auditor does not affect the internal audit effectiveness Keywords: Internal auditor effectiveness, competence of internal auditor, relationship between internal and external auditor, auditee support to internal audit activity, independence of internal auditor.
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AlTheebeh, Ziad AbdulHalim, and Hamza Yosuf Abu Qobu. "Some Influential Elements in Improving Effectiveness of External Audit in Jordanian Audit Offices Field Study from the Point of View of External Auditors." Accounting and Finance Research 6, no. 4 (September 1, 2017): 31. http://dx.doi.org/10.5430/afr.v6n4p31.
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This study aims to identify the impact of the elements represented in the criteria of selecting the auditor, auditor's independence, auditor's fees and professional specialization of auditor in improving effectiveness of external audit in Jordanian audit offices from the point of view of external auditors, the researchers adopted the analytical descriptive approach in this study.The most important findings of this study are that there is an existence of a positive impact of the independent study variables (combined and separated) in enhancing the effectiveness of external audit in Jordanian audit offices. This study presented many recommendations, the most important of these are: the auditors should exercise their profession in accordance with professional specialization and the need to provide the necessary legal protection for the external auditor to maintain his independence.
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Lukman, Hendro, and Viviani Harun. "Faktor yang mempengaruhi deteksi kecurangan dalam persepsi auditor eksternal dan auditor internal." Jurnal Akuntansi 22, no. 2 (August 29, 2018): 255. http://dx.doi.org/10.24912/ja.v22i2.351.
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The purpose of this study was to determine the effect of pressure, opportunity and razionalitation (The fraud triangel) to detect fraud on the perception of the external auditor and the internal auditor. This research carried out many acts of fraud in companies in Indonesia although the company has been audited by an independent and the internal auditor function within the company. This study uses primary data by distributing questionnaires to staff public accounting firms and internal auditors in the company. The processing of data using SPSS. The results of this study indicate that pressure, opportunity and razionalization have positive impact on the detection of fraud on the perception of the external auditor and the internal auditor. Therefore, it is suggested for the company to create good governance to minimixe the fraud, and for auditors have to well understanding business and procedure of company
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Lee, Ho Young, Vivek Mande, and Richard Ortman. "The Effect of Audit Committee and Board of Director Independence on Auditor Resignation." AUDITING: A Journal of Practice & Theory 23, no. 2 (September 1, 2004): 131–46. http://dx.doi.org/10.2308/aud.2004.23.2.131.
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This study examines the relationship between audit committee and board independence and auditor resignations. Independent audit committee and board members, who are concerned about incurring legal liability and harming their reputations, support the external auditors in accomplishing their assurance duties. We use a logit model to compare audit committee and board independence between two types of auditor switches: 190 auditor-initiated switches versus 190 matched client-initiated switches during the time period 1996 to 2000. Our results show that audit committee and board of director independence are both negatively associated with the likelihood of an auditor resignation. Our results also show that audit committee independence is positively related to the quality of the firm's successor auditor. This suggests that independent audit committees also play a mitigating role in reducing the negative consequences associated with an auditor resignation.
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Wanadri, Chandra, and Christina Dwi Astuti. "PENGARUH BUDAYA ORGANISASI, ETOS KERJA, INDEPENDENSI AUDITOR, INTEGRITAS AUDITOR DAN PEMAHAMAN GOOD GOVERNANCE TERHADAP KINERJA AUDITOR." Jurnal Akuntansi Trisakti 2, no. 2 (September 14, 2015): 129. http://dx.doi.org/10.25105/jat.v2i2.4899.
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<p><em>This study aims to determine the effect of Organizational Culture, Work Ethics, Auditor Independence, Integrity Auditor and Understanding of Good Governance on Auditor Performance. The sample used in this study consists of 121 auditors, internal auditors and external auditors are included in Jakarta. Samples were randomly distributed using a purposive sampling method. The method used in this study is a multiple linear regression. This Study show that the results of Auditor Independence can affect auditor performance significantly, because of the significant level of the t test was under 0.05. while the other independent variables, such as Cultural Organization, Work Ethics, Integrity Auditor and understanding of Good Governance, together with the auditor independence joinly affect auditor performance, because the level of the F test is significant in under 0.05. For future research, it is advisable to further expand the sample to be used in research, as well as adding variables that need to be researched and also accompany the respondents in the questionnaire in order to obtain a thorough and accurate answer.</em></p><p><em> </em></p>
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Permatasari, Shintia Intan, Yesi Mutia Basri, and Julita Julita. "Gangguan Independensi, Etika Profesi, dan Kompetensi Auditor Pada Independensi Auditor Internal Pemerintah." Kajian Akuntansi 22, no. 1 (March 31, 2021): 40–65. http://dx.doi.org/10.29313/ka.v22i1.6949.
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ABSTRACT This research is an empirical study which aims to determine the effect of personal disturbances, external disturbances, organizational disturbances, professional ethics, and auditor competence on the auditor’s independence. This research was conducted at the Inspectorat of Pelalawan Regency, Siak Regency, and Meranti Islands Regency. The data used are primary data with a questionnaire as an instrument. The sample of this study was 55 respondents with a saturated sample method, but only 44 (80%) of the responses filled out the questionnaire completely and could be processed. The analytical tool used in this study is multiple regression using the SPSS ver.22.0 program. Based on the analysis and testing of the partial t test hypothesis, it can be concluded that for variables (1) personal disturbance, (2) external disturbance, (3) organizational disturbance, (4) professional ethics and, (5) auditor competence has a significant effect on auditor independence. This study has a contribution in improving auditor independence. The results adjusted R2of the five independent variables together on the pendent variable has the effect of 54,9% and the remaining 45,1% influenced by other factors not examined in this study.Keywords: Personal Disturbance, External Disturbance, Organizational Disturbance, Professional Ethics, Auditor Competence, Auditors’ Independence ABSTRACTPenelitian ini merupakan studi empiris yang bertujuan untuk menguji dan membuktikan pengaruh gangguan pribadi, gangguan eksternal, gangguan organisasi, etika profesi dan kompetensi auditor terhadap independensi auditor. Penelitian ini dilakukan di Inspektorat Kabupaten Pelalawan, Kabupaten Siak dan Kabupaten Kepulauan Meranti. Data yang digunakan adalah data primer dengan kuesioner sebagai instrument. Sampel penelitian ini sebanyak 55 orang responden dengan metode sampel jenuh, namun hanya 44 (80%) responden yang mengisi kuesioner secara lengkap dan dapat diolah. Alat analisis yang digunakan dalam penelitian adalah regresi berganda dengan menggunakan program SPSS ver.22.0. Berdasarkan analisis dan pengujian hipotesis uji t parsial, dapat memperoleh kesimpulan bahwa untuk variabel (1) gangguan pribadi, (2) gangguan eksternal, (3) gangguan organisasi, (4) etika profesi dan, (5) kompetensi auditor berpengaruh signifikan terhadap independensi auditor. Penelitian ini memiliki kontribusi dalam meningkatkan independensi auditor. Hasil Adjusted R2 dari lima variabel independen secara bersama-sama terhadap variabel dependen memiliki pengaruh sebesar 54,9% dan sisanya 45,1% dipengaruhi oleh faktor lain yang tidak diteliti dalam penelitian ini. Kata Kunci : Gangguan Pribadi, Gangguan Eksternal, Gangguan Organisasi, Etika Profesi, Kompetensi Auditor, Independensi Auditor
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Carcello, Joseph V., and Terry L. Neal. "Audit Committee Characteristics and Auditor Dismissals following “New” Going-Concern Reports." Accounting Review 78, no. 1 (January 1, 2003): 95–117. http://dx.doi.org/10.2308/accr.2003.78.1.95.
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One important role of audit committees is to protect external auditors from dismissal following the issuance of an unfavorable report. We examine auditor dismissals following new going-concern reports that Big 6 firms issued between 1988 and 1999. Our findings suggest that audit committees with greater independence, greater governance expertise, and lower stockholdings are more effective in shielding auditors from dismissal after the issuance of new going-concern reports. In addition, we find that the relation between audit committee independence and auditor protection from dismissal has grown stronger over time. Finally, independent audit committee members experience a significant increase in turnover rate after auditor dismissals. These findings, coupled with those from Carcello and Neal (2000), suggest that when affiliated directors dominate the audit committee, management often can (1) pressure its auditor to issue an unmodified report despite going-concern issues, and (2) dismiss its auditor if the auditor refuses to issue an unmodified report.
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Bouain, Wided, and Yosr Hrichi. "The Factors of Reinforcing Global Independence of the External Auditor: Case of Tunisian Enterprises." International Journal of Accounting and Financial Reporting 9, no. 1 (January 3, 2019): 51. http://dx.doi.org/10.5296/ijafr.v9i1.13992.
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The global independence of the external auditor is decomposed into real and perceived independence. The aim of this article is to analyze the factors enhancing the global independence of the Tunisian auditor by classifying them as factors related to the auditor, the auditing firm and the audited company. In one hand, our results shows that training, sector specialization and the audit committee reinforce real and perceived auditor’s independence. In fact, the auditor with a higher degree of education is enables to issue an unbiased audit report. The sector specialization guarantees the auditor's ability to be rigorous and independent during the audit assignment. The audit committee which has a legitimate and informative power limits any pressure on auditor’s independence. In addition, the audit tenure has a negative effect on the perceived independence and the voluntary rotation decreases the real independence because managerial pressures can force the auditor to give a favorable opinion on the financial statements and the rotation can affects the auditor's perception of his future fees. We can therefore conclude that achieving a global independence of the auditor is a difficult task because of the ambiguity of the assessment of the real independence of the Tunisian auditor.
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Cho, Moon Kyung. "The effects of human resources in internal audit on external audit pricing decision." Corporate Ownership and Control 15, no. 4-1 (2018): 165–80. http://dx.doi.org/10.22495/cocv15i4c1p4.
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This study presents evidence that external audit fees are negatively and significantly associated with the proportion of general internal auditors. Further, external audit hours are negatively and significantly associated with the proportion of general auditors without affecting external unit audit price. In addition, the results of the data adjusted for firm size suggest that audit fees and audit hours decrease for smaller firms as the proportion of general internal auditor increases. The result implies that both small firms and their external auditors are encouraged to utilize more general internal auditors in performing an external audit. The author finds no evidence that external audit fees are associated with internal auditor expertise or experience. This shows that external auditors are not likely to rely on internal auditors’ professional judgment in performing an external audit due to reduced auditor independence.
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Cho, Eun Jung, Ju Ryum Chung, and Ho-Young Lee. "The Role of Labor Unions in Corporate Transparency: Focusing on the Role of Governance in Auditor Change Process." Sustainability 11, no. 9 (May 8, 2019): 2643. http://dx.doi.org/10.3390/su11092643.
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This study investigates how the presence and power of labor unions are associated with auditor replacement, more specifically, external auditor tenure and the direction of auditor change. External auditor tenure and direction have been of great interest to stakeholders, as they are very likely associated with the financial reporting quality and corporate transparency, crucial factors for sustainable business. We are focusing on the role of the labor union, one of the key stakeholders involved in corporate governance and transparent operations, in external auditor selection processes. During the annual wage bargaining process, labor unions that rely on financial information face information asymmetry because financial statements are provided by the management. Therefore, labor unions have a high demand for independent and capable external auditors. This demand is likely to shorten auditor tenure and/or prompt changes to higher-quality auditors. Using a sample of 4568 firm-years listed in the Korean stock markets for the period of 2005 to 2008, we find evidence that the presence and power of labor unions significantly decrease external auditor tenure. We also find that the direction of auditor changes with the presence and power of labor unions is likely from non-industry specialist auditors to industry specialist auditors. This study contributes to the extant literature by extending the previous research on auditor selection and the governance role of labor unions.
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Matonti, Gaetano, Jon Tucker, and Aurelio Tommasetti. "Auditor choice in Italian non-listed firms." Managerial Auditing Journal 31, no. 4/5 (April 4, 2016): 458–91. http://dx.doi.org/10.1108/maj-07-2015-1215.
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Purpose This paper aims to investigate auditor choice in those Italian non-listed firms adopting the “traditional” model of corporate governance. In Italy, non-listed firms can choose between two types of auditor: the Board of Statutory Auditors (BSA), that is the statutory auditors, or an “external” auditor. At the same time, a BSA conducts the administrative auditing for all companies with equity exceeding €120,000. Design/methodology/approach The paper estimates a logistic regression model of firm auditor choice between an external auditor and the BSA, which incorporates variables proxying for both agency conflict and organizational complexity effects. Findings The results show that of the potential agency factors, only board independence drives auditor choice, whereas organizational complexity and risk factors including firm size, investment in inventories, subsidiary status and complexity drive auditor choice. These results may be explained in the administrative audit role of the BSA, which monitors both day-by-day firm operations and the financial statements preparation “project”. Stakeholders as a result are reassured that, in general, their interests are protected. Finally, it was found that legal form and voluntary International Financial Reporting Standards compliance exert an impact on auditor choice. Originality/value The paper provides support for an internal yet independent auditing body such as the Italian BSA as a wider model for corporate governance in European non-listed firms (OECD, 2004 and 2015). The BSA as an administrative and financial auditing body made up solely of independent highly qualified professionals can work within the firm on an operational basis, and in so doing can increase stakeholder protection.
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Kandemir, H. Kubra. "Auditing versus consultancy: a critique of the EU law reforms on the new form of auditing." Journal of Governance and Regulation 5, no. 3 (2016): 90–97. http://dx.doi.org/10.22495/jgr_v5_i3_p8.
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Auditors used to serve the interest of the shareholders only. However, there have been significant changes in terms of auditors’ role and their function. Auditors are now expected to verify financial statements, but at the same time give an assurance regarding the financial sustainability of the entity. Regarding the latter role, audit firms provide consulting services, including risk assessment and management services. However, the law does not assign the latter role to external auditors. This situation results in an expectations gap in relation to both the role of the auditors and the scope of the external auditing. In addition, the growing economic importance of consulting and the long years of auditor tenure is likely to impair auditor independence. This paper submits that the new form of auditing is not problematic but creates issues. First, the expectations between the users of the financial reports and auditors are wider. Second, auditors’ independence is damaged due to the long years of auditor tenure and dependence of non-audit fees generated from consultancy services that not related to audit. The recent law reforms issued by the European Commission has brought some important provisions in terms of filling the expectations gap, reinforcing auditor independence and reducing the familiarity threat. EU’s relatively strict rules on provision of non-audit services and audit firm rotation are expected to have an important impact in the audit market. A critical analysis of the new EU law is submitted with some policy recommendations.
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Brandon, Duane M., Aaron D. Crabtree, and John J. Maher. "Nonaudit Fees, Auditor Independence, and Bond Ratings." AUDITING: A Journal of Practice & Theory 23, no. 2 (September 1, 2004): 89–103. http://dx.doi.org/10.2308/aud.2004.23.2.89.
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Recent accounting scandals and perceived audit failures have resulted in excessive criticism of the accounting and auditing professions. The financial press has expressed disdain at the presumably substandard work that was completed on audit clients, ostensibly at the expense of the public good. Our research investigates one aspect of this situation by exploring the effects that nonaudit services performed by a firm's external auditors have on perceived auditor independence in the bond market. Specifically, we analyze the effects that the magnitude and relative degree of nonaudit services have on the bond rating process. Regression results indicate that the amount of nonaudit services provided by a firm's external auditors is negatively associated with that client's bond rating. However, results of classification accuracy analyses fail to demonstrate any improvement in performance as a consequence of adding nonaudit fees to a benchmark prediction model, indicating no economic effect on the actual bond ratings. These results afford insights concerning bond rating analysts' perceptions of auditor independence and provide empirical evidence regarding the role that audit and nonaudit service fees play in establishing a firm's bond rating.
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Stephan Hayes, Rick, and Richard Baker. "A participant observation study of the resolution of audit engagement challenges in government tax compliance audits." Qualitative Research in Accounting & Management 11, no. 4 (November 11, 2014): 416–39. http://dx.doi.org/10.1108/qram-02-2013-0003.
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Purpose – The aim of this paper is to extend the prior auditing literature by examining audit engagement challenges arising during government tax compliance audits. The prior auditing literature has examined how audit engagement challenges have been resolved through auditor/auditee negotiations. Design/methodology/approach – The empirical evidence for the paper was gathered during a participant observation study conducted by the primary researcher over a period of six years while working as an auditor for the Alcohol and Tobacco Tax and Trade Bureau (TTB) of the US Department of Treasury. Findings – This paper discusses various challenges faced by government auditors and how these challenges were resolved. The path to resolution was not always clearly marked. Resolution depended a great deal on the individual auditor’s judgment, interpretation of the Code of Federal Regulations (CFRs), and the willingness of the auditee to change the methods and techniques they use in operating and reporting wine operations. Materiality was determined by compliance with the regulation criteria [CFRs and the US Code (USC)] – any non-compliance was considered to be material. Resolution of many of the challenges resulted in an increased payments of excise taxes or penalties by the auditee entities. In other cases, the audit agency allowed the auditees to agree to change or amend their practices to correct a violation or a lack of compliance with US federal government regulations. As such, while the difference in the role and status of the government tax compliance auditor as compared with the independent external auditor did not necessarily lead to a different set of audit procedures, the pattern of communications between the auditor and the auditee in a government tax compliance audit were quite different from an external audit of financial statements. The government tax compliance environment is often complex, but the auditor may draw on a number of sources of knowledge and communication: CFRs, USC, Generally Accepted Government Auditing Standards, national audit planning, national experts, winery management, local peers, local government supervision, legal counsel and other auditors. Originality/value – The primary contribution of the paper lies in the fact that little or no prior research in auditing has been conducted using participant observation as a research methodology. The use of participant observation provides new perspectives on the resolution of audit engagement challenges and auditor/auditee communication and negotiation.
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Farah Freihat, Abdel Razaq, Ismail Hamad Al-Shaar, and Ayda Farhan. "Code of ethics for professional accountants and change the external auditor: A study of the emerging markets." Corporate Ownership and Control 18, no. 3 (2021): 201–12. http://dx.doi.org/10.22495/cocv18i3art16.
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To ensure the independence of auditors and the credibility of financial statements, this study investigates if Jordanian manufacturing companies change their external auditors. Moreover, assess if that change is influenced by the International Code of Ethics for Professional Accountants (ICEPA). The study figured out the viewpoints of external auditors and financial managers of public industrial companies listed on the Amman Stock Exchange. Auditor’s changing data is gathered from the annual reports of (59) manufacturing firms from 2006 to 2015. (280) questionnaires were collected from financial managers and auditors of manufacturing firms to assess if auditors comply with ICEPA. The binomial test and the logistic regression analysis were used. The study showed that the change of the external auditor in Jordanian companies is significantly affected by the ICEPA. However, external auditors and financial managers have different views of the effects of the ICEPA on the change of the external auditor in Jordan.
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Azibi, Jamel, Hubert Tondeur, and Hamza Azibi. "The Impact of the H3C on Auditor Independence in French Context." Journal of Management and Sustainability 7, no. 2 (May 30, 2017): 105. http://dx.doi.org/10.5539/jms.v7n2p105.
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The H3C was created by the LSF Act of 2003 (LSF) to regulate the auditing profession in France. It is considered as an external control authority. The auditor independence is considered as the first preoccupation of this new authority. This paper focuses on the impact of the H3C on auditor independence in France context from 2002 to 2007. The first hypothesis is related to the establishment of the H3C and auditor independence and the second deals with the relation between the start of the inspection program and the auditor independence. Our data was obtained from Thomson Financial Data for 140 enterprises. The empirical results show that the auditor independence increases only after the creation of the H3C. Contrary to this result, the auditors' independence did not increase significantly after the announcement of the inspection process because the inspection process started in 2007.
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Sari, Martdian Ratna, Alhamdi Zuhri, and Paulina Millennia Natalia Wijaya. "Dilema Auditor: Faktor Internal dan Eksternal Independensi." Journal of Management and Business Review 18, no. 2 (June 30, 2021): 137–55. http://dx.doi.org/10.34149/jmbr.v18i2.276.
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The need for financial information is an important component of economic development. The auditor is the party that guarantees that the financial statements are maintained credibility. However, many cases show the misuse of financial statements. This study aims to determine the effect of internal and external factors on auditor independence. This study used a Purposive Sampling as the sampling method, which is by taking a sample from the population-based on certain criteria (Sugiyono, 2013). This study used a sample of the auditor who has experience working in the KAP for at least 1 year. The type of data used is primary data in the form of a questionnaire. This study proves that the length of the auditor's relationship influences auditor independence. While this study does not prove that the provision of non-audit services, Competition among KAP, Large size of KAP, Audit period, and Relativism influence the independence of auditors.
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H., Dwi Agustina, Made Sudarna, and Unti Ludigdo. "PENGARUH KOMPETENSI, INDEPENDENSI DAN UKURAN AUDITEE TERHADAP KUALITAS AUDIT." El Muhasaba: Jurnal Akuntansi 5, no. 2 (September 1, 2014): 226. http://dx.doi.org/10.18860/em.v5i2.2861.
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This study examines and analyzes the influence of competence, independence and the size of the auditees on audit quality. Audit quality is defined as the probability that the auditor will both discover and report a breach in the client’s accounting system. Drivers of audit quality-a framework are : culture within the firm, the skills and personal qualities of audit partners and staff, the effectiveness of the audit process, the reliability and usefulness of audit reporting, factors outside the control of auditors. Competence of auditors is adequate professional proficiency to perform inspection tasks and professional proficiency in the preparation of examination report. In this study, the competence dimension of competence using Certified General Accountant (CGA) are leadership, professionalism and professional knowledge. The independence is the mental attitude and appearance that is free from private interference, and external organizations. The independence consisting of: a long relationship with the auditees and the provision of non audit services and the pressure of the auditees, peer review of auditors. Auditee size is total assets and revenue of each county/city in Java. Using the random sampling method, the research tries to collect some inportant information given by respondents. Questionaire is a tool used to measure the variables. The hypotheses were tested with SPSS. The sample of this study is the Chairman of the audit team LKPD 2010 on the BPK RI in Java. Data obtained by spreading 118 and a total of 110 questionnaires are returned and processed feasible. The results partially demonstrate competence and independence affect audit quality, while the size of the auditee does not affect audit quality. Researchers can then add other indicators in the variable size of auditees such as number of population and area, total spending, the number of programs and activities within one year.
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Soyemi, Kenny Adedapo. "Internal Corporate Governance Practices and Choice of External Auditor in Nigeria: A Logistic Regression Analysis." Binus Business Review 11, no. 1 (March 31, 2020): 9–16. http://dx.doi.org/10.21512/bbr.v11i1.5894.
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The research provided empirical evidence on how internal corporate governance practices were proxied by board size, board independence, and share ownership by institutional investors with firm size and leverage as control variables. It might influence the choice of the external auditor, (a dummy proxied with the Big4 versus non-Big4 audit firms dichotomy). The sample was composed of 27 purposely selected quoted non-financial firms spread across 10 sectors on the Nigerian Stock Exchange (NSE). There were 189 firms/year of dataset observations. These secondary panel data were sourced mainly from selected firms’ annual reports and accounts from 2011 to 2017. Moreover, descriptive analysis and test of mean difference were conducted, while the panel logistic regression was adopted as the estimation method. The test of mean difference reveals that many firms with larger board size, board independence, and considerably higher institutional investors engage Big4 auditors. Meanwhile, firms with higher leverage employ non-Big4 auditors. The results from the multivariate analysis show that key determinants of the choice of external auditors are board independence and firm size. This suggests that firms have a higher propensity of choosing a Big4 audit firm as the number of independent board members, as well as their increase in sizes. These findings are mostly consistent with previous studies.
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Ibrahim Idris, Mohammed, Yousef Ibrahim Abu Siam, and Ahmad Lutfi Ahmad. "The impact of external auditor size on the relationship between audit committee effectiveness and earnings management." Investment Management and Financial Innovations 15, no. 3 (July 27, 2018): 122–30. http://dx.doi.org/10.21511/imfi.15(3).2018.10.
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This research aims to explore new evidence on the nature of the relationship between the effectiveness of audit committee and earnings management in one of the emerging economies, Jordan. In addition, it investigates how external auditor size might moderate this relationship. For this purpose, a panel data consisting of 64 industrial firms listed on Amman Stock Exchange (ASE) is used, covering the period between 2009 and 2014. An index consisting of four characteristics is developed to measure the effectiveness of audit committee, namely audit committee independence, size, meetings and financial expertise. Results show that audit committee effectiveness has a significant and negative impact on earnings management. Moreover, a positive interaction effect of external auditor size and audit committee effectiveness on earnings management is found, which is supportive of the substitute relationship between the external auditor size and effective audit committee in reducing earnings management. Policy makers and professional accounting bodies in Jordan might benefit from these results, as they show that legislative reforms can motivate firms to adopt good governance practices to mitigate earnings management.
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Yustina, Andi Ina, and Stephanie Angelica Gonadi. "The Negative Effect of Time Budget Pressure to Auditor Independence and Professional Skepticism." Jurnal Akuntansi dan Keuangan 21, no. 1 (May 1, 2019): 38–48. http://dx.doi.org/10.9744/jak.21.1.38-48.
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This research examines whether time budget pressure affect professional scepticism and if so, whether the affect is mediated by auditor independency. A web-based survey is used in deploying and delivering questionnaires to 163 auditors from big four and non-big four in Jakarta. The result shows that auditor independency (AI) is partially mediated the relationship between time budget pressure (TBP) and professional scepticism (PS). Which means, external auditor in Jakarta who experiencing high time pressure will tend to decrease their independency and resulted a low scepticism. Seeing this result, this study suggests by increasing number of audit team member, set the number of minimum supporting evidence and having supervisor to monitor auditor’s job, will help to minimize the negative effect of time pressure.
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Onulaka, Paul Nnamdi, Moade Fawzi Shubita, and Alan Combs. "Non-audit fees and auditor independence: Nigerian evidence." Managerial Auditing Journal 34, no. 8 (September 2, 2019): 1029–49. http://dx.doi.org/10.1108/maj-06-2017-1576.
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Purpose This study aims to investigate the extent to which the provision of non-audit services (NAS) by external auditors to audit clients affects auditors’ independence and the audit expectation gap in Nigeria. Design/methodology/approach The study adopts an interpretivist approach. In total, 30 semi-structured, face-to-face interviews were conducted to explore the views expressed by audit partners and pension fund managers in Nigeria; group responses were evaluated and presented separately. After transcribing the interview audio recordings, a thematic data analysis of the two groups’ responses was performed. Findings Interpretation of the interview responses indicates that the provision of NAS by audit firms to their audit clients is regarded by auditors as a matter of economic necessity. Nevertheless, it is also perceived as impeding auditors’ independence and increasing the gap between the auditor and public expectations. Practical implications This study contributes to the debate surrounding the need for an independent body to oversee auditing standard setting distinct from the current practice to enhance transparency. Originality/value A qualitative analysis of the nuanced responses obtained from the semi-structured interviews reveals starkly the perceived economic pressures on auditors to accept non-audit work. Moreover, it endorses the regulation to restrict non-audit work in support of a sustainable fee level for an independent audit.
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Uswati Dewi, Nurul Hasanah, Djuwito Djuwito, and Romanus Wilopo. "The role of auditor in whistleblower system: The cases in Indonesia." Journal of Economics, Business & Accountancy Ventura 18, no. 2 (August 28, 2015): 301. http://dx.doi.org/10.14414/jebav.v18i2.456.
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In 2012, the Association of Certified Fraud Examiners stated that 43% of frauds are detected by tip money. The role of tips for the people is a crucial factor in disclosing frauds. Most often, company frauds are revealed by a whistle blower. This study attempts to observe the dimensions of the existence and role of the organization of internal auditors and the witness protection agency as external factors influencing an internal auditor to become a whistle-blower. It also explores the effects of the internal auditor competencies, the moral attitude of the internal auditor, and the ethical behavior of company’s internal auditors as internal factors influencing an internal auditor on being a whistle-blower. The independent auditors are considered as the population as they are often connected with the internal auditors. They need the information from the internal auditor about fraud or abuse in the company. Questionnaires were mailed to them and analyzed using Partial Least Squares. It showed that only the ethical behavior of company’s internal auditors influenced them to be whistle blowers coupled by a witness protection program. To develop sound corporate governance in Indonesia, a whistle blower system is needed with emphasis on a strong witness protection. At present, Indonesia does not have the whistle blower act.
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Uswatun Dewi, Nurul Hasanah, Djuwito Djuwito, and Romanus Wilopo. "The role of auditor in whistleblower system: The cases in Indonesia." Journal of Economics, Business & Accountancy Ventura 18, no. 2 (August 28, 2015): 301. http://dx.doi.org/10.14414/jebav.v18i2.823.
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In 2012, the Association of Certified Fraud Examiners stated that 43% of frauds are detected by tip money. The role of tips for the people is a crucial factor in disclosing frauds. Most often, company frauds are revealed by a whistle blower. This study attempts to observe the dimensions of the existence and role of the organization of internal auditors and the witness protection agency as external factors influencing an internal auditor to become a whistle-blower. It also explores the effects of the internal auditor competencies, the moral attitude of the internal auditor, and the ethical behavior of company’s internal auditors as internal factors influencing an internal auditor on being a whistle-blower. The independent auditors are considered as the population as they are often connected with the internal auditors. They need the information from the internal auditor about fraud or abuse in the company. Questionnaires were mailed to them and analyzed using Partial Least Squares. It showed that only the ethical behavior of company’s internal auditors influenced them to be whistle blowers coupled by a witness protection program. To develop sound corporate governance in Indonesia,a whistle blower system is needed with emphasis on a strong witness protection. At present, Indonesia does not have the whistle blower act.
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Hill, Cecil L., and Quinton Booker. "State Accountancy Regulators' Perceptions of Independence of External Auditors When Performing Internal Audit Activities for Nonpublic Clients." Accounting Horizons 21, no. 1 (March 1, 2007): 43–57. http://dx.doi.org/10.2308/acch.2007.21.1.43.
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This study explores state accountancy regulators' perceptions of whether external auditors remain independent when also performing internal audit activities for nonpublic entities. The purpose of this study is to provide a more complete understanding of perceptions regarding auditor independence in the nonpublic entity environment. The primary issues are (1) whether performing the external audit and internal auditing services for the same entity affects perceptions of independence, and (2) whether a separation between the CPA firm's internal and external audit personnel significantly affects perceptions of independence when both services are performed. We use a between-subjects design and target state accountancy regulators from each of the 54 U.S. jurisdictions. Findings based on 206 usable responses indicate that state board members do not perceive a significant difference in the independence of a CPA firm performing a nonpublic entity's external audit versus a CPA firm performing that entity's external audit and internal audit, provided that separate personnel are used for the external and internal audit work. Board members do perceive a significant difference in independence when the CPA firm uses the same personnel to perform both the external and internal audit work.
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Seetharaman, Arumugam, M. Krishna Moorthy, and A. S. Saravanan. "Outsourcing of internal audit and independence of auditors." Corporate Board role duties and composition 4, no. 2 (2008): 40–49. http://dx.doi.org/10.22495/cbv4i2art3.
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Internal audit which is an integral part of any organization has long been overlooked. In fact, most organizations look at internal audit as a routine function in an organization. However, in the recent years, internal audit has taken a front seat for many organizations. Others are also looking at various options such as outsourcing of the internal audit function of their organizations. However, where outsourcing is concerned, one important issue arises, which is the independence of the external auditor to perform the internal audit function. This paper takes a look at the various aspects of the internal audit process as well as the impact and independence of external auditors who perform internal audit.
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Brown, J. Owen, Jonathan H. Grenier, Jonathan S. Pyzoha, and Andrew Reffett. "The Effects of Specialist Type and Estimate Aggressiveness on Jurors' Judgments of Auditor Negligence." AUDITING: A Journal of Practice & Theory 38, no. 3 (November 1, 2018): 47–69. http://dx.doi.org/10.2308/ajpt-52333.
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SUMMARY We examine the effects of two critical factors auditors consider when auditing complex estimates, the decision to use a specialist and the relative aggressiveness of management's estimate, on jurors' auditor negligence assessments. Experiment 1 finds jurors view auditors' acceptance of a more aggressive estimate as more justifiable, and are thus less likely to find them negligent, when auditors consult with either internal or external specialists. However, these litigation benefits do not extend to audits of less aggressive estimates. Experiment 2 finds jurors are less likely to find auditors negligent when auditors use an external versus an internal specialist, due to greater perceptions of external specialist independence. We also find auditors accrue similar litigation benefits when an external specialist reviews the internal specialists' work. We conclude that utilizing external specialists, either to directly test complex estimates or to review internal specialists' work, limits auditors' litigation exposure when auditing relatively aggressive estimates. JEL Classifications: M40; M41; M42. Data Availability: Available upon request from the authors.
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Hendi, Hendi, and Desiana Desiana. "PENGARUH BIAYA AUDIT, AUDIT TENURE DAN ROTASI AKUNTAN PUBLIK TERHADAP PEMILIHAN AUDITOR EKSTERNAL: STUDI EMPIRIS PADA PERUSAHAAN BUMN YANG TERDAFTAR DI BURSA EFEK INDONESIA." Jurnal Benefita 1, no. 1 (February 28, 2019): 1. http://dx.doi.org/10.22216/jbe.v1i1.3811.
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<p><em>The purpose of an audit is to increase the confidence level of the users to the financial statements which are achieved through a statement from an opinion by the auditor. The selection of an external auditor is defined as a process to selecting an independent person who audits the company's financial statements in order to produce a quality independent auditor's report and provides an independent auditor's report that can provide information to stakeholders and company management. This study used 20 state-owned enterprises listed on the Indonesia Stock Exchange, which were selected by purposive sampling method. The selected companies report annual reports during 2013 to 2017. Based on the results of the study, the samples that met the study criteria were 98 samples. The results of this study indicate that audit fees have a significant positive effect on the selection of external auditors while the audit of tenure and rotation of public accountants has no significant effect on the selection of external auditors.</em></p><p><em><br /></em></p><p>Tujuan suatu audit adalah untuk meningkatkan tingkat keyakinan pengguna laporan keuangan yang dicapai melalui pernyataan suatu opini oleh auditor. Pemilihan auditor eksternal diartikan sebagai suatu proses memilih seseorang independen yang mengaudit laporan keuangan perusahaan agar menghasilkan laporan auditor independen yang berkualitas dan menyediakan laporan auditor independen yang dapat memberikan informasi bagi para pemangku kepentingan dan pihak manajemen perusahaan. Penelitian ini menggunakan 20 perusahaan Badan Usaha Milik Negara yang terdaftar di Bursa Efek Indonesia, yang dipilih dengan metode <em>purposive sampling</em>. Perusahaan yang dipilih melaporkan laporan tahunan selama tahun 2013 sampai dengan 2017. Berdasarkan hasil penelitian, sampel yang memenuhi kriteria penelitian adalah 98 sampel. Hasil dari penelitian ini menunjukkan bahwa biaya audit berpengaruh signifikan positif terhadap pemilihan auditor eksternal sedangkan audit <em>tenure</em> dan rotasi akuntan publik tidak berpengaruh signifikan terhadap pemilihan auditor eksternal. </p>
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Fujianti, Lailah. "The Role of Legal Compliance and Good Corporate Governance on Reducing Audit Delay on Publicly Listed Companies in Indonesia." Research in World Economy 10, no. 3 (July 25, 2019): 359. http://dx.doi.org/10.5430/rwe.v10n3p359.
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Audit Report Lag (ARL) the completion of the audit that the length of time is measured from the date of closing of the financial year until the issuance of the audit report signed by the auditor. Benefits of the financial statements will be reduced if the report is not available on time. This study examines the Good Corporate Governance (GCG) mecanism and eksternal auditor that affect ARL including the board of ditectors, independent board of ditectors, audit committee and the external auditors and regulatory pressures. This study sampled kompas 100 companies in Indonesia Stock Exchange, with a sample of 94. This study was measured by using a Moderated regression analysis. These results indicate that Partially, the board of directors, independent board of directors have a significant effect on ARL before and after uses moderating variabel legal pressure, and the audit committe, external auditors have not a significant effect on ARL. Regulatory pressures plays a role as a moderator variable in the relationship the ARL with the GCG.
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Widiatami, Anna Kania, Nanny Dewi Tanzil, Cahya Irawadi, and Ahmad Nurkhin. "Audit Committee’s Role in Moderating the Effect of Financial Distress Towards Going Concern Audit Opinion." International Journal of Financial Research 11, no. 4 (July 8, 2020): 432. http://dx.doi.org/10.5430/ijfr.v11n4p432.
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Auditors are required to provide services in auditing financial statements presented by management and provide audit opinions on the fairness of the presentation of financial statements. Sometimes, in reality, management and auditors have their interests so that each party can achieve the goals. The conflict of interest appears on the independence of the auditor in issuing audit opinions, especially the audit opinion with the going concern explanatory paragraph. The audit committee, as a supervisory board, will continue to maintain the independence of the auditor in issuing audit opinions with the going concern explanatory paragraph. This study aims to examine the effectiveness of the audit committee in maintaining the independence of external auditors issuing audit opinions, especially the audit opinion with the going concern explanatory paragraph. Based on the purposive sampling method obtained a sample of 168 companies. Testing the hypothesis in this study using logistic regression and moderated regression analysis. The results showed that financial distress had a significant negative effect for the audit opinion with going concern explanatory paragraph. Furthermore, the audit committee was not able to strenghten the relationship of financial distress on the audit opinion with a going-concern explanatory paragraph.
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Mohamed, Fatima Elyass. "The Impact of the External Auditor’s low fees on the quality of Professional Performance in Saudi Arabia." Advances in Social Sciences Research Journal 7, no. 11 (November 26, 2020): 176–86. http://dx.doi.org/10.14738/assrj.711.9333.
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This study was conducted to study the impact of low fees of the external auditors on the quality of the professional performance in the Kingdom of Saudi Arabia including the stages of development of the external audit, the standards of quality control, the factors affecting the quality of performance and the matters that affect the fees of the external auditor. The importance of this research stems from the importance of the auditor's work and how the events of economic collapses affect the fees of the auditor. This research raised several questions about the factors affecting improving the quality of audit services, the extent of the impact of the independence of the audit work team and determining their fees on the quality of the review process and determining the relationship between the internal auditor and the external auditor and the extent of approval of the second over first. The study samples were randomly selected to be about 10% of the study community (15 offices). Sixty questionnaires were distributed, of which 45 returned questionnaires, 75% valid for analysis. Data were analyzed using SPSS software for descriptive statistical analysis. The tested hypothesis were as follow: professional performance quality is not affected by the evolution of the audit office; It does not affect low fees and low on quality performance; whenever the level of fees dropped the more professional level of excesses and the higher the quality of the performance of the internal auditor, the less external work references. The assumptions were tested regarding the above group of factors or the effect of the independent variables on the dependent variable. All of them accepted the hypothesis that the quality of professional performance was not affected by the development of the audit offices fees.
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Segah, Boby. "PENGARUH PENGALAMAN KERJA, INDEPENDENSI, OBJEKTIVITAS, DAN MOTIVASI TERHADAP KUALITAS HASIL PEMERIKSAAN AUDITOR INSPEKTORAT PROVINSI KALIMANTAN TENGAH." Anterior Jurnal 17, no. 2 (June 1, 2018): 86–99. http://dx.doi.org/10.33084/anterior.v17i2.8.
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The audit organization in Indonesia is divided into two, namely the Government External auditor conducted by the Supreme Audit Agency (BPK) and the Government Internal Auditor or better known as the Internal Controller of the Government (APIP). The function of the internal auditor is to carry out an internal audit function which is an independent appraisal function within an organization to test and evaluate the organization's activities undertaken. In addition, internal auditors are also expected to contribute more to improving efficiency and effectiveness in order to improve organizational performance. One of the units conducting an audit/examination of the Regional Government is the Regional Inspectorate. The Inspectorate Auditor of Central Kalimantan Province only conducts an examination in the form of a review of the Local Government Financial Statements to provide limited confidence in the quality of the Regional Financial Report not the opinion or opinion on the Financial Statement, but only the recommendation. This is stated in the Minister of Home Affairs Regulation No. 4 of 2008. The Auditor at the Inspectorate of Central Kalimantan Province is a government internal auditor with the same examination object each examination period, it will appear familiarity between the auditor with the object of examination. The emerging familiarity can lead to the independence of the auditor being disrupted so that the quality of the examination results decreases. The Inspectorate Auditor of Central Kalimantan Province conducts an examination based on the belief that he will gain personal pleasure, such as the enjoyment of improving intellectual ability.
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Abbott, Lawrence J., Susan Parker, Gary F. Peters, and Dasaratha V. Rama. "Corporate Governance, Audit Quality, and the Sarbanes-Oxley Act: Evidence from Internal Audit Outsourcing." Accounting Review 82, no. 4 (July 1, 2007): 803–35. http://dx.doi.org/10.2308/accr.2007.82.4.803.
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This study extends current literature related to nonaudit services by investigating internal audit outsourcing to the external auditor. We posit that certain types of internal audit outsourcing (i.e., those which are nonroutine, and thus tend to be nonrecurring in nature) are unlikely to lead to economic bonding, while offering significant potential for improvements in audit coverage and scope when provided by the external auditor. Alternatively, outsourcing routine internal audit tasks is more likely to lead to economic bonding, as well as potentially threatening internal auditor independence. Our results are consistent with firms with independent, active, and expert audit committees being less likely to outsource routine internal auditing activities to the external auditor. However, the outsourcing of nonroutine internal audit activities such as special projects and EDP consulting are not negatively related to effective audit committees. Additionally, outsourcing of either type of internal audit activity to an outside service provider other than the external auditor is not related to effective audit committees. Collectively, we interpret these findings as supportive of an effective audit committee's ability to monitor the sourcing of the firm's total (i.e., internal and external) audit coverage, while simultaneously exhibiting concern for external auditor independence.
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Ivandi, Ivandi, and Tigor Sitorus. "ANTESEDEN VARIABEL KUALITAS AUDIT KECURANGAN LAPORAN KEUANGAN." Jurnal Manajemen 16, no. 1 (May 1, 2019): 42–63. http://dx.doi.org/10.25170/jm.v16i1.790.
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This study aims to proves the relationship between independence, competence, individual external auditor's responsibility as antecedent variable with financial fraud audit quality, where as the number of cases of financial scandals by manipulating financial data that occurs in large companies and involve public accountants to make public accountants must pay attention to audit quality.This research use causality research method with causal relationship between independent variable with dependent variable. The data used are primary data obtained using questionnaires distributed to Public Accounting Firm (KAP) in North Jakarta and Central Jakarta. The population in this study are all auditors who work in Public Accounting Firm (KAP) of North Jakarta and Central Jakarta with Sample Random Sampling technique which produces 46 respondents from 8 KAP in 2018. Data analysis using SPSS 21. Based on the results of research, for the first equation of independence and competence variables have a significant positive effect on individual external auditor's responsibility variable. For the second equation for independence variable have significant positive effect to financial fraud audit quality variable whereas for competence variable and individual responsibility of external auditor does not have significant effect to fraud audit quality variable.
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Bahrawe, Seraj Hamed, Harashid Haron, and Ali Nawari Bin Hasan. "Corporate Governance and Auditor Independence in Saudi Arabia: Literature Review and Proposed Conceptual Framework." International Business Research 9, no. 11 (September 12, 2016): 1. http://dx.doi.org/10.5539/ibr.v9n11p1.
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<p>This study aimed to propose a theoretical framework that explains the relationship between internal corporate governance mechanisms namely audit committee and board of directors, and auditor independence. It is a descriptive study that explored the Saudi corporate governance reforms and the Saudi auditing market. In recent years, Saudi Arabia has been pursuing corporate governance reforms, as evidenced by the setting up of the Capital Market Authority (CMA) in 2003 and the publication of the Saudi Corporate Governance Code (SCGC) in 2006. In the Saudi Organization for Certified Public Accountants (SOCPA), the accounting standards committee holds the responsibility of developing and reviewing accounting and auditing standards in the country. According to the agency theory, corporate governance mechanisms and external audit have a key role in improving the process of financial reporting. Basing the primary argument on the above premise, this study attempted to achieve the following objectives; 1) to explore the issue of auditor independence, and 2) to determine the extent of the effect of corporate practices in Saudi Arabia on the external audit independence. This conceptual work’s outcomes revealed that the regulatory authorities and the CMA have to expend more efforts to improve the awareness and appreciation level of effective corporate governance practices among major internal mechanisms (audit committee and board of directors) and external mechanisms (external auditors) of corporate governance in Saudi Arabia.</p>
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Noviana, ML Astri Prehtin, and NFN Rahmawati. "Pengaruh Independensi, Role Stress, dan Burnout Terhadap Efektivitas Auditor Internal (Studi Kasus Pada Kantor Badan Pengawasan Keuangan dan Pembangunan (BPKP) Provinsi Jawa Tengah)." Indonesian Treasury Review Jurnal Perbendaharaan Keuangan Negara dan Kebijakan Publik 3, no. 2 (July 31, 2018): 155–68. http://dx.doi.org/10.33105/itrev.v3i2.70.
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The demand for global integration in the public sector leads to the accountability of State finances. By examination, supervision, which is the cornerstone of the government's economic performance clarification. This has become important in the public sector as well as in the private sector. Such circumstances spur employees in the scope of their organization to improve the effectiveness of its performance so as to ensure the survival of the organization. Once the importance of an oversight, in Indonesia have internal and external controls on the public sector for the effectiveness of the performance of government officials can be achieved. This study aimed to analyze the influence of Independence, roles stress and burnout on the effectiveness of the task of Financial and Development Supervisory Agency (BPKP) as an internal auditor. The population in this study were all BPKP auditors in Central Java, the technique of sampling using random sampling and the sample size used in this study were 64 auditors. Methods of data collection using questionnaires and interviews, while the method of data analysis using multiple regression analysis. From the results of the study can be concluded that: Independence has a positive influence, burnout, role excess, and role conflict negatively affect the effectiveness of the auditor's work, the vagueness of the role in this study did not give a significant effect on the effectiveness Abstrak Tuntutan integrasi global dalam sektor publik mengarah pada akuntabilitas keuangan Negara. Dengan pemeriksaan, pengawasan, yang menjadi tumpuan klarifikasi kinerja ekonomi pemerintah. Hal ini menjadi suatu hal yang penting dalam sector publik maupun dalam sektor swasta. Keadaan seperti ini memacu para pegawai di lingkup organisasinya untuk meningkatkan efektivitas kinerjanya sehingga dapat menjamin kelangsungan hidup organisasinya. Begitu pentingnya suatu pengawasan maka di Indonesia mempunyai pengawasan internal dan ekternal pada sektor publik agar efektivitas dari kinerja aparat pemerintah dapat tercapai. Penelitian ini bertujuan untuk menganalisis pengaruh Independensi, roles stress dan burnout terhadap efektivitas tugas Badan Pengawasan Keuangan dan Pembangunan (BPKP) sebagai auditor internal. Populasi dalam penelitian ini adalah semua auditor di BPKP Jawa Tengah, teknik pengambilan sampel menggunakan teknik random sampling dan jumlah sampel yang digunakan dalam penelitian ini sebanyak 64 auditor. Metode pengumpulan data menggunakan kuesioner dan wawancara, sedangkan metode analisis data menggunakan analisis regresi berganda. Dari hasil penelitian dapat disimpulkan bahwa: Independensi berpengaruh positif, burnout, kelebihan peran, dan konflik peran berpengaruh negatif terhadap efektivitas kerja auditor, kidakjelasan peran dalam penelitian ini tidak memberikan pengaruh yang signifikan terhadap efektivitas.
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Iankova Natchkova, Maia. "CHALLENGES TO PROFESSIONAL ETHICS, TRAINING AND CONTINUING EDUCATION OF SPECIALISTS IN THE FIELD OF INDEPENDENT FINANCIAL AUDIT." Knowledge International Journal 34, no. 5 (October 4, 2019): 1301–5. http://dx.doi.org/10.35120/kij34051301n.
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Auditor’s profession is extremely necessary and crucial for the society. It has the important and responsible task to observe and assess the proper implementation of the principles, concepts, rules, legal standards and conventions as set out in the International Financial Reporting Standards/ International Accounting Standards, EU directives, International Standards on Auditing and the national (local) accounting legislation. Specialists in the field of independent financial audit – chartered expert accountants, registered auditors, should verify the timely, reliable, objective, correct, accurate and fair presentation, in all material aspects, of the information about the property and financial position of enterprises, their financial performance, and to determine the opportunities for investing and managing the capitals of audited enterprises in the interest of the society. Auditor’s profession is distinguished with moral at high level and professional ethics of chartered expert accountants, registered auditors; with extreme professionalism in the field of independent financial audit; with professional skepticism in the field of accounting and economic analysis; with professional optimism upon undertraining audit engagements; with independence from personal interests and lack of obligation for loyalty to the assigners of audit engagements; with ensuring high quality performance of audit engagements; with professional and intellectual knowledge and skills in the field of accounting, financial audit, economic analysis, micro- and macroeconomics, statistics and finance acquired upon completion of higher education in economics, upon sitting special examinations for obtaining qualification of chartered expert accountants, registered auditors, and upon carrying out constant and continuing education of auditors. For the purposes of keeping the trust of the society in the independent financial audit, registered auditor’s professional ethics needs to be at high level that enables authoritative and competent establishment of the role and significance of auditor’s profession in the society. Independent financial auditors should observe specific standards of conduct and fundamental professional and ethical principles as set out in the Code of Ethics for Professional Accountants, such as honesty, objectivity, professional competence and proper attention, confidentiality, professional conduct, observance of methodological standards and professional skepticism. They should avoid actions that could discredit the auditor’s profession and have negative impact on the good reputation of the registered auditor. Furthermore, where independent financial auditors market and promote themselves or their audit practice, they should avoid giving the society wrong idea of auditor’s profession. The work of chartered expert accountants, registered auditors is diverse and to a great extent characterized by development of the financial risk. Therefore, this study highlights some of the more significant and socially important specific characteristics of the auditor’s profession, which are monitored by the public and by the government authority supervising the work of the registered auditors. Its objective is to present, determine and distinguish the challenges in the light of good world audit practices faced by the professional ethics, training and continuing education of specialists in the field of independent financial audit, thus contributing to the improvement of their qualification and enhancement of their audit practice. This publication may be used for carrying out different types of financial audit – internal audit carried out by the financial enterprises’ internal units; independent financial audit carried out by chartered expert accountants, registered auditors, and external audit carried out by the government supervisory authority and by other government authorities.
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Daugherty, Brian, and Daniel G. Neely. "Koss Corporation Case: Trouble in Brew City." Issues in Accounting Education 26, no. 3 (August 1, 2011): 547–68. http://dx.doi.org/10.2308/iace-50004.
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ABSTRACT This instructional case provides auditing students an opportunity to examine an interesting real-life embezzlement and financial statement fraud occurring at a publicly traded company in the post-Sarbanes-Oxley (SOX) era. The case focuses on independent auditors' and senior management's reporting responsibilities related to internal control over financial reporting involving smaller public companies (nonaccelerated filers). While all public companies are subject to external auditor and management attestation on the effectiveness of internal control over financial reporting following SOX, the Securities and Exchange Commission (SEC) granted nonaccelerated filers numerous extensions for the effective date of required auditor attestation. In 2010, President Obama signed legislation to permanently exempt nonaccelerated filers from auditor attestation. The case also highlights inherent risk assessments by the independent auditor when one individual holds multiple C-level titles (Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, etc.) within the organization concurrent with membership on the board of directors, and requires students to recommend internal control policies and procedures designed to prevent or detect the embezzlement.
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Ratmono, Dwi, and Darsono Darsono. "Effectiveness of internal audit in local governments: The moderating role of internal and external auditors’ relations." Accounting 8, no. 2 (2022): 177–86. http://dx.doi.org/10.5267/j.ac.2021.7.004.
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Research on the internal audit function is relevant for improving the quality of governance in organizations. The internal auditor is an important element of government management in the context of realizing good governance by providing quality and effective audit results. The aim of this study is to examine the factors influencing (determinants) the effectiveness of the internal audit function in Indonesian local government organizations. The research samples were 137 respondents. This study used primary data in the form of a questionnaire. The hypothesis testing technique used Partial Least Squares-Structural Equation Modelling (PLS-SEM) analysis. The results of statistical tests showed that independence, competence, and management support could increase the effectiveness of the internal audit function. However, this cooperative relationship does not moderate the influence of competence and management support on the effectiveness of internal audit. The practical implication of this study is that in order to increase the effectiveness of internal audit, internal auditors must uphold an attitude of independence, objectivity and freedom from conflicts of interest in carrying out their professional responsibilities. The practical value of this study also shows that to increase the effectiveness of public sector internal audit, internal and external auditors must increase cooperation to improve the effectiveness of internal audit, especially in discussion activities between internal and external auditors, communication between internal and external auditors, and activities to share working papers between internal and external auditors.
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Filipović, Ivica, Toni Šušak, and Andrea Lijić. "The Effect of Auditor Rotation on the Relationship between Financial Manipulation and Auditor’s Opinion." Business Systems Research Journal 12, no. 1 (May 1, 2021): 96–108. http://dx.doi.org/10.2478/bsrj-2021-0007.
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Abstract Background: Since external auditors possess the expertise necessary for detecting manipulations in financial statements, they should also take into account earnings management that could lead to it. In that context, auditor’s independence, which can be affected by auditor’s rotation, is of utmost importance. Objectives: This paper aims to examine the moderating effect of auditor rotation on the relationship between the extent of financial manipulation and the type of auditor’s opinion for companies listed on the Zagreb Stock Exchange in the Republic of Croatia. Methods/Approach: A panel analysis with logistic regression is conducted to test the research hypothesis. The sample consists of 210 observations during the three years from 2015 to 2017. Results: Results show a significant positive relationship between auditor rotation in a current financial year and auditor’s opinion. Furthermore, there is a negative, but the statistically insignificant moderating effect of auditor rotation in a current financial year on the relationship between financial manipulation and auditor’s opinion, as well as the statistically insignificant moderating effect of auditor rotation frequency over five years on the relationship between financial manipulation and auditor’s opinion. Conclusions: It is not likely that auditors take earnings management into account when generating their opinion on financial statements, and auditor rotation is not proven to be an adequate stimulus in that context.
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Hastuti, Sri, and Siti Sundari. "Locus Of Control Sebagai Varibel Moderasi Hubungan Kompleksitas Tugas Dan Kinerja Auiditor." Jurnal Keuangan dan Bisnis 16, no. 2 (November 26, 2018): 113. http://dx.doi.org/10.32524/jkb.v16i2.402.
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Research Objectives to prove the influence of the complexity of the tasks faced by the Auditor on performance in carrying out duties as an Auditor. The complexity of tasks related to various problems in the company requires locus of control from internal and external to maintain independence and competence.The first auditor performance case occurred in 2002 with the disclosure of the Enron case involving the KAP in the big five, Athur Anderson. In 2008 the Telkom case affected the closure of KAP Edy Priyanto, and there were still many other cases which were violations of the accountant's code of ethics.This research is in the form of quantitative, with proof of the complexity of the task and locus of control on the performance of the auditor. Sample 46 Junior auditors from several KAPs in Surabaya, using the Partial Least Square test, the result that the complexity of the task affects the performance of the Auditor and the interaction of the complexity of the task with locus of control does not affect the performance of the Auditor.
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Alfraih, Mishari M. "Choosing an external auditor: does the composition of boards of directors matter?" International Journal of Law and Management 59, no. 3 (May 8, 2017): 394–412. http://dx.doi.org/10.1108/ijlma-03-2016-0032.
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Purpose This paper aims to investigate the association between the composition of boards of directors and the choice of external auditor among companies listed on the Kuwait Stock Exchange (KSE) in 2013. Design/methodology/approach Consistent with prior research, audit quality is represented by two proxies, namely, a Big 4 and Non-Big 4 audit firm. Independence, diversity, interlocks, size and role duality are used as proxies for board composition. To accommodate the dichotomous dependent variable (auditor choice), a logistic regression model is used to test the hypothesized associations between board composition and auditor choice. Findings After controlling for firm-specific characteristics, results show that independence, diversity and size are statistically significant and increase the likelihood that a KSE-listed company selects a high-quality (Big 4) audit firm. Role duality is also statistically significantly but decreases the likelihood of choosing a Big 4 audit firm. Practical/implications This research has implications for regulators, shareholders, boards and academics. The paper underlines the importance of the composition of the board in increasing the likelihood of hiring a high-quality audit firm. Regulators can draw upon these results when assessing the effectiveness of corporate governance mechanisms. Originality/value This paper is among the first to study the association between auditor choice and board composition using data from the frontier market of Kuwait, thus responding to the call for empirical research into the issue in less-developed markets. Overall, it sheds light on the effectiveness of board composition and provides empirical evidence that it is an important element in the choice of auditors. The findings indicate that board composition may be a mechanism that can promote demand for high audit quality.
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Lubenchenko, О. Ye, and А. V. Lysiuk. "Methodology for Preparation of Audit Entities to External Control of the Quality of Audit Services." Statistics of Ukraine 88, no. 1 (May 1, 2020): 116–30. http://dx.doi.org/10.31767/su.1(88)2020.01.14.
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The requirements to the system of control over the quality of audit services are analyzed, which are specified in the Law of Ukraine “Audit of Financial Statements and Auditing” from 21.12.2017 No 2258-VIII; Directive of the Ministry of Finance of Ukraine “Approval of the Procedure for Inspection of the Quality Control of Audit Services” from 29.08.2019 No 362; Resolution of the Council for Supervision over Auditing at the State Institution “The Body of Public Supervision over Auditing” from 30.08.2019 No 6/7/13 “Information Questionnaire of Auditing Entity”. It is demonstrated that the quality control system requires corrections of the following: responsibilities of administration and staff of auditing entities for use of the adopted intra-firm provisions on the quality control system, requirements of ISQC1, IAS, the Law of Ukraine “Audit of Financial Statements and Auditing”; the requirements to staff (quality controller, reviewer, assignment partner); identification of threats to the independence and the auditor’s response on the assessed threats; the requirements to reviews of complaints, complicated issues; issues related with non-stop professional training of auditors. Special attention of auditors need to be drawn to the fact that the policies and procedures of the quality control system do not have to be confined to the audit of financial statements, but have to apply to other assignments on giving confidence and related auditor services. Besides that, assessment of threats to the independence has to be conducted for non-auditor services specified in Article 6 of the aforementioned Law of Ukraine.
The studies conducted by the author allowed to elaborate procedures for quality control of auditor services; measures to stimulate staff of auditing entities to scrutinize requirements to implementation of the quality control system; obligating documents of auditing firms on assessment of ethical threats; sharing of duties among assignment group members; requirements to qualification of the key partner, quality controller; identification of auditor assignments; solutions of complicated issues and their documenting, measures on control of the assignment at the final phase and quality control of the assignment. The proposed measures are supposed to help auditing entities revise the already operating quality control systems in a timely manner, which will facilitate supply of high quality information to all the users of auditing reports, external quality controllers from the Body of Public Supervision over Auditing and the Auditor Chamber of Ukraine.
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Arwani, Agus. "ISSUES AND CHALLENGES OF SHARIAH AUDITING IN ISLAMIC FINANCIAL INSTITUTION AND CORPORATE GOVERNANCE COMPLIANCE." Media Riset Akuntansi, Auditing & Informasi 18, no. 2 (September 30, 2018): 169. http://dx.doi.org/10.25105/mraai.v18i2.3008.
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The study examines the perspective of practitioners who are involved directly and/or indirectly with the process of shariah compliance/auditing from Islamic financial institutions (IFIs) on the issues of standards for shariah auditing, auditors qualifications, and independence. Auditing Islamic financial institutions (IFIs) covers a wider scope than legal financial statement auditing. External auditors of IFIs not only conduct financial audits but also conduct tests on the shariah compliance of IFIs, according to fatawa (religious opinions) and guidelines set by the Shariah Supervisory Board (SSB). Shariah review is unique to IFIs, due to the requirement to ensure that all business activities and operations of IFIs adhere to shariah precepts. The scarce resourceful auditors with both shariah and accounting/auditing qualifications and the issue of self-review threat to independence may affect the reputable image of Islamic financial institutions. This article is literature method. The findings reinforce the importance of auditors' qualification and independence as currently there is no mandatory regulated professional shariah auditor code to be in tandem with the drastic growth of the IFIs. The paper offers practical implication to regulators in providing a direction to revise the existing standards for shariah auditing practices and to formulate a mandatory professional governance structure for shariah auditors.
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Lowe, D. Jordan, Marshall A. Geiger, and Kurt Pany. "The Effects of Internal Audit Outsourcing on Perceived External Auditor Independence." AUDITING: A Journal of Practice & Theory 18, s-1 (October 1, 1999): 7–26. http://dx.doi.org/10.2308/aud.1999.18.s-1.7.
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The accounting profession is currently attempting to redefine its role and is expanding the types of services provided. With this expansion, however, comes a concern regarding the potential lack of independence between the auditor and the client requesting these services. This exploratory study examines whether the outsourcing of the internal audit function to the company's external auditor affects financial statement users' perceptions of auditor independence oand financial statement reliability, as well as loan decisions. The overall objective of this study is to assess reactions to various internal-audit outsourcing arrangements, and in doing so, to evaluate the accounting profession's current position regarding the acceptability of performing this type of “extended audit service” to audit clients. Results indicate significant differences across the various outsourcing groups involving the company's external auditor and the nonoutsourced group. Specifically, auditor performance of management functions had a significantly negative impact on users' perceptions of auditor independence and financial statement reliability, and resulted in the lowest percentage of loan approvals. However, the separation of audit-firm staff performing the outsourced internal audit from those performing the financial statement audit had a significantly positive impact on financial statement users' perceptions and loan approvals. The findings of this study support the AICPA's current position on internal audit outsourcing and also suggest that a requirement be established that provides a distinct separation of staff between a CPA firm's internal and external audit teams.
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Et.al, Azam Abdelhakeem Khalid. "The Performance of Internal Shariah Auditor in Islamic Financial Institutions." Turkish Journal of Computer and Mathematics Education (TURCOMAT) 12, no. 3 (April 11, 2021): 646–52. http://dx.doi.org/10.17762/turcomat.v12i3.769.
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Purpose –It is this study’s objective to examine the correlations between internal Shariah auditors’ independence, qualifications and performance in Islamic financial institutions (IFIs), conceptually.
Design/methodology/approach – This paper is theoretical in its approach; whereby it also undertakes an extensive literature review. From a general agency theory, an Islamic agency theory is articulated and applied to ascertain the attributes of internal Shariah auditor performance revolving around the concept of independence and qualifications.
Findings – Performance of internal Shariahauditing, as a mechanism of assuring Shariahcompliance by IFIs varies directly with the degree of independence and qualifications enjoyed by internal Shariah auditors themselves. The study finds that in evaluating the freedom and qualifications of FIs’internalShariah auditors, Islamic agency theory can potentially serve as the theoretical foundation in developing a multi-dimensional conceptual framework.
Research Limitations/implications – Evidence is drawn strictly from secondary sources.
Practical implications –To ensure that internal Shariahauditor is effectively performing, IFIs ought to improve the degree of independence and qualifications of their auditors.
Originality/value –The studies on the performance of internal and external Shariahauditorsin conventional financial institutions have been extensively researched. However, research on the performance of IFIs’ internal Shariah audit is yet to be conducted extensively.
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Beasley, Mark S., and Kathy R. Petroni. "Board Independence and Audit-Firm Type." AUDITING: A Journal of Practice & Theory 20, no. 1 (March 1, 2001): 97–114. http://dx.doi.org/10.2308/aud.2001.20.1.97.
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This paper investigates the role of outside members of the board of directors in the choice of external auditor for property-liability insurance companies. Consistent with our hypothesis that we derive from theories of both corporate governance and audit quality, we find that the likelihood of an insurer employing a brand name auditor that specializes in the insurance industry is increasing in the percentage of the members of the board of directors that are considered outsiders. However, we do not find a significant association between board composition and the choice of using a nonspecialist brand name (Big 6) auditor and a nonbrand name auditor, suggesting specialization is considered to be important, but not brand name in this setting.
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Agustina, Inneke, and Emmy Indrayani. "The Role Of Internal And External Factors On Audit Quality." Jurnal Manajemen dan Keuangan 9, no. 1 (September 11, 2020): 73–87. http://dx.doi.org/10.33059/jmk.v9i1.2481.
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Financial statements must be presented with information that is reasonable, reliable, and transparent, so it need to be audited by third parties. However, some cases involving external auditors often occur due to integrity inability. This research aims to analyze whether the internal (Professional Ethics, Independency, Experience) and external (Audit Tenure, Audit Fee) factors have a role or effect on Audit Quality. The analysis method used is Partial Least Square (PLS) using SmartPLS version 3.2.8. The data has been collected by questionnaires filled by 65 external auditors in South Jakarta who were selected using a purposive sampling. The results show that Professional Ethics and Audit Tenure affect significantly on Audit Quality. While Independency, Experience, and Audit Fee do not affect significantly on Audit Quality. Audit Tenure is the most dominant affected Audit Quality.
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Soyemi, Kenny, Oluwayemisi Victoria Afolabi, and Imoleayo Foyeke Obigbemi. "External audit quality and clients' corporate governance mechanisms in Nigeria: Any nexus?" Journal of Research in Emerging Markets 3, no. 2 (March 29, 2021): 44–59. http://dx.doi.org/10.30585/jrems.v3i2.596.
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This study examined the influence of an entity's corporate governance practices on independent external auditor quality, proxied with auditor industry specialization, in Nigeria. The explanatory research design was adopted. Data were sourced from annual reports and accounts of thirty-five (35) quoted non-financial firms for 11 years from 2008 to 2018. After that, panel regression analyses were employed as the estimating technique for the model specified. The empirical results revealed that independent external audit quality is positively influenced by the firm's size but negatively influenced by board Independence and the proportion of female directors on board. Overall, aggregate explanatory variables adopted in this study accounted for 50% changes in external audit quality. Though these findings largely negate previous ones, they contribute to the extant literature and provide further directions for a future attempt at researching within emerging territories.