AcademCraft, Volume 1, 2024
by
Juliastini Ni Putu, Putra I Komang Trisna Eka, Sekolah Tinggi Ilmu Sosial dan Ilmu Politik Wira Bhakti, Indonesia
Adhika I Nyoman Resa, Universitas Mahasaraswati Denpasar, Indonesia
This study aims to examine the influence of independence, professional ethics, time pressure, task complexity, internal locus of control and external locus of control on audit judgment. The sample used was 40 auditors obtained by the saturated sample method. The analytical tool used is multiple linear regression analysis. The results of this study indicate that the variables of independence, professional ethics, time pressure, and task complexity do not affect audit judgment. Internal locus of control variables has a positive effect on audit judgment, while external locus of control variables has a negative effect on audit judgment.
The growth of public sector organizations in Indonesia has become increasingly complex. The complexity of the public sector means that the need for information for planning and controlling financial management is increasingly varied. Likewise, public sector stakeholders need information that is more varied, reliable and relevant for decision making. According to Statement of Financial Accounting Concept (SFAC) No. 2, states that the primary qualities of information that is useful in making economic decisions are relevant value (relevance) and reliability (reliability). To achieve relevant and reliable quality, financial reports need to be audited by an auditor to provide assurance to users that the financial reports have been prepared according to the criteria applied, namely the Financial Accounting Standards that apply in Indonesia.
An auditor is someone who is professional in carrying out his duties. As a professional, an auditor must adhere to his professional responsibilities, not only providing an opinion on the fairness of a financial report, but also being responsible for the results of the audit. Therefore, auditors must be careful in carrying out their audit duties and determining the judgment they will provide (Kusumawardani, 2018).
In determining opinions, audit judgment plays an important role. Audit judgment is a personal consideration or the auditor's perspective in responding to information that influences the documentation of evidence and the decision making of the auditor's opinion on an entity's financial statements (Praditaningrum, 2012). Where audit judgment is needed when dealing with uncertainty and limited information and data obtained, auditors are required to be able to make assumptions that can be used to make judgments and evaluate judgments (Safitri, 2017). In this case, as judgment in an audit is used to determine audit risk, determine the amount of evidence and select evidence. The auditor's perspective in responding to information is related to the audit responsibilities and risks that the auditor will face in connection with the judgments he makes. The quality of this judgment will show how well an auditor performs in carrying out his duties (Praditaningrum, 2012).
Factors that influence audit judgment include independence, professional ethics, time pressure, task complexity and locus of control. Independence is an important factor for auditors to carry out their profession based on the judgment taken by the auditor. Audit Standards - Professional Public Accountant Standards state that independent auditors are those who are not easily influenced, do not take sides with anyone, and are obliged to be honest with management, company owners and other parties who use financial reports. An independent auditor will provide a true assessment regarding the fairness of the financial statements so that the financial statements can be relied on. Audit Judgment is also closely related to professional ethics. Professional ethics is the spearhead of a profession, this is because the auditor profession really needs public and government trust in the quality of the services and opinions it provides. The code of ethics of the Indonesian Accountants Association (IAI) is intended as a guide and rules for all members, both those who work as auditors. Quality audits are very important to ensure that auditors carry out their responsibilities to users or those who rely on the credibility of audited financial reports, by upholding high ethics (Suartikanti and Novianti, 2015).
The pressure received by auditors is not only in the form of pressure for obedience to clients or superiors or pressure for compliance with the code of ethics. Pressure can be time pressure. According to Tielman (2012) time pressure is a situation that shows that auditors are required to be efficient over the time that has been set. Auditors who receive this time budget pressure can behave deviantly. Auditor deviant behavior has a serious impact on audit quality, judgment making, ethics and audit welfare. The complexity and complexity of a job can encourage someone to make mistakes in their work. The complexity of the tasks faced by auditors and the more complicated the tasks carried out by the auditor, the more errors that can occur due to the complexity of the task so that the auditor feels under pressure from the presence of complicated tasks which can influence the production of inappropriate judgments (Maengkom, 2016).
The final factor that influences audit judgment is locus of control. Each auditor has a different type of locus of control at work. This will of course affect the quality of the resulting judgment. Robbins and Judge (2008) define internal locus of control as the degree to which individuals believe that they are the determinants of their own destiny. Internal locus of control is an individual who believes that they are in control of whatever happens to them. Individuals with an internal Locus of Control tend to have a higher level of work, and have higher job satisfaction with their work. Meanwhile, individuals with an external locus of control believe that success or success in their lives is beyond their control (Sari, 2017). Individuals with an external locus of control will tend to have less confidence in their own abilities; this causes individuals with an external locus of control to usually have a position below individuals with an internal locus of control. Based on the above phenomenon and the inconsistency of previous research results, researchers are interested in conducting a study on the influence of independence, professional ethics, time pressure, task complexity, internal locus of control and external locus of control on audit judgment.
According to Heider (1925), the founder of attribution theory, attribution theory is a theory that explains a person's behavior. Attribution theory explains the process of how we determine the causes and motives of someone's behavior. This theory refers to how a person explains the causes of the behavior of other people or themselves which will be determined whether from internal, for example, nature, character, attitude, etc. or external, for example, pressure, situations or certain circumstances that will have an influence on individual behavior (Ayuningtyas, 2012). This research uses attribution theory because this theory can explain a person's internal factors, especially the personal characteristics of an auditor such as independence, professional ethics, and internal locus of control because basically an auditor's personal characteristics are one of the determinants of how an auditor determines initial considerations when carrying out an audit.
According to Siegel and Marconi (1989) motivation is the key to initiating, controlling, maintaining and directing behavior. Motivation can also be said to be a drive from within a person's heart to carry out and achieve goals. A person who has motivation within himself means he has the power to achieve success and achieve goals. Auditors must always have the motivation to achieve organizational goals and audit objectives well. Auditors who have strong motivation within themselves will not be influenced by gender differences between them, pressure for obedience from superiors and the entity being audited, and the complexity of the audit tasks they carry out in producing a relevant judgment on the results of their audit. Auditors who have strong motivation will also continue to try to increase their audit skills and experience to support their performance.
Independence is an attitude of impartiality towards anyone's interests in examining financial reports made by management (Komalasari and Hernawati, 2015), so that auditors must have the ability to be firm in making decisions, not take sides with any party or be consistent in making decisions accordingly. with existing information so as to produce an opinion that is in accordance with the facts or information obtained, so that the higher the independence of an auditor, the better the resulting judgment.
Research conducted by Drupadi and Sudana (2014), and Komalasari and Hernawati (2015) shows that independence has a positive effect on audit judgment. The greater the independence of an auditor, the better the resulting audit judgment (Drupadi and Sudana, 2014). Based on this, the hypothesis proposed in this research is as follows:
H1: Independence has a positive effect on audit judgment.
Professional ethics is a characteristic of a profession that must have high moral commitment and be expressed in the form of special rules. In carrying out his duties as an auditor, a good ethical environment will create quality audit decisions. This is because the decision is based on applicable principles and standards.
Research conducted by Suartikanti and Novianti (2015) and Dewi (2018) shows that professional ethics has a positive influence on audit judgment. Suartikanti and Novianti (2015) explained that by upholding professional ethics it is hoped that there will be no fraud among auditors, which can lead to cheating and violating the established code of ethics, so that they can provide a judgment that is truly in accordance with the financial reports presented by the auditor. client. Based on this, the hypothesis proposed in this research is as follows:
H2: Professional ethics has a positive effect on audit judgment.
Time pressure is a time constraint that may arise from limited resources allocated to carry out a task.
In Tielman's (2012) research, Andika (2017) shows that time pressure is a situation that shows auditors are required to be efficient over the time that has been set. Rosadi (2017) stated that time pressure tends to result in auditors not having enough time to get a comprehensive picture of the problem when making a professional auditor's judgment, which ultimately reduces the quality of the auditor's professional judgment. Based on the description of previous research that has been put forward, the hypothesis in this research is as follows:
H3: Time pressure has a negative effect on audit judgment.
Task complexity is a task that is unstructured, confusing and difficult. Task complexity can be defined as a function of the task itself. Auditors are always faced with many, different and interrelated tasks.
In research from Maengkom (2016), and Gracea, et al. (2017) show that an auditor who is under pressure from a complex audit task will tend to make unfavorable and inappropriate judgments. Irwanto, et al. (2016) stated that high task complexity can damage the judgment made by auditors. Based on the description of previous research that has been put forward, the hypothesis in this research is as follows:
H4: Task complexity has a negative effect on audit judgment.
Internal locus of control is an individual who believes that they are in control of whatever happens to them. Dewi (2016) stated that auditors who can control events that occur and decide their own fate, have a high need for achievement, have a high sense of responsibility for carrying out a task or solving a problem. This means that individuals play a role in it so that the better an auditor's perspective on an event, the better the audit results in determining judgment.
Research conducted by Raiyani and Suputra (2015) and Dewi (2016) shows that internal locus of control has a positive effect on audit judgment. The more an auditor's internal locus of control increases, the better the resulting judgment will be. Based on this, the hypothesis proposed in this research is as follows:
H5: Internal locus of control has a positive effect on audit judgment.
External locus of control is an individual who believes that whatever happens to them is controlled by external forces such as luck and chance (Judge and Robbins, 2013). Auditors who have a high level of external locus of control tend not to maximize their performance so that the resulting audit judgment is low.
Research by Raiyani and Suputra (2014) shows that an auditor with an external locus of control will make the auditor's performance not optimal because individuals who have high external values feel less satisfied with their work. Maengkom (2016) stated that individual auditors who believe that whatever happens is controlled by external forces such as luck and chance, individual behavior will have no role in it, which will cause the quality of their judgment to decrease. Based on the description of previous research that has been put forward, the research hypothesis is formulated as follows:
H6: External locus of control has a negative effect on audit judgment.
This research was conducted on external auditors who work at the Indonesian Financial Audit Agency (BPK), Bali Province Representative, located at Jalan Panjaitan No. 2 Sumerta Kelod, Denpasar. The variables used in this research include: independent variables consisting of independence (IND), professional ethics (ETP), time pressure (TKW), task complexity (TKW), internal locus of control (LOCi), external locus of control (LOCe); the dependent variable is audit judgment.
The types of data used in this research are quantitative data and qualitative data. Quantitative data in this research was obtained from questionnaire data in the form of numbers with the help of a Likert Scale which refers to the measurement of the statement items used. Meanwhile, qualitative data in this research can be in the form of a list of names of auditors who work at the Bali Province Representative Audit Board (BPK).
The data sources in this research are primary data and secondary data. Primary data in this research are the results or answers of respondents via questionnaires. Meanwhile, secondary data in this research was obtained through scientific articles, journals, theses and previous research.
The population in this study were all holders of Functional Auditor (JFA) positions who worked at the BPK RI Representative Office of Bali Province, totaling 40 Auditors. The sampling technique in this research was to use a nonprobability sampling method with a saturated sampling technique. The saturated sampling method is a sampling technique when all members of the population are used as samples (Sugiyono, 2017: 144). The data collection method used in this research is the questionnaire and documentation method.
Data analysis techniques used in this research include descriptive statistics, classical assumption tests (normality, multicollinearity and heteroscedasticity tests), model feasibility tests (adjusted R2 test, f test and t test) with the following model equation:
ADJ = α + β1IDP + β2ETP - β3TKW - β4KPT - β5LOCi + β6LOCe + e
Where: ADJ = Audit Judgment; α = Constant Number; β1 –β6 = Regression direction coefficient; IDP = Independence; ETP = Professional Ethics; TKW = Time Pressure;
KPT = Task Complexity; LOCi = Internal Locus of Control; LOCe = External Locus of Control; e = error.
The results of descriptive statistics show that external locus of control has the lowest minimum value, namely 9.00, and audit judgment and independence have the highest maximum value, namely 35.00. The highest average is audit judgment with an average value of 32.9000 and the lowest average is external locus of control with a value of 19.0500. The highest standard deviation value is external locus of control with a value of 2.73580 and the lowest standard deviation value is professional ethics with a value of 1.63221. The normality test results can be explained that the Asymp.Sig value of each variable is 0.751. The asymp.sig value is greater than 0.05, therefore it can be stated that the regression model is normally distributed.
The results of the multicollinearity test can be explained that the tolerance value of each variable is more than 10% or 0.1 and the VIF value is less than 10, so it can be concluded that the regression model does not have multicollinearity.
The results of the heteroscedasticity test can be explained that the significance value of each variable is greater than 0.05, so it can be concluded that in the regression model there is no heteroscedasticity.
The results of multiple linear regression analysis produce the following regression equation:
ADJ = 21.587 + 0.125IND – 0.150ETP – 0.104TKW + 0.144KPT + 0.481LOCi – 0.110LOCe
The results of the coefficient of determination test (Adjusted R2) show a value of 0.347, which means the variables independence (IND), professional ethics (ETP), time pressure (TKW), task complexity (KPT), internal locus of control (LOCi), external locus of control (LOCe) was able to explain the audit judgment (ADJ) variable of 34.7% while the remaining 65.3% was influenced by other variables not included in the research.
The f test results obtained a significance value of 0.002 which is smaller than 0.05. This means that there is an influence between the variables independence (IND), professional ethics (ETP), time pressure (TKW), task complexity (KPT), internal locus of control (LOCi), external locus of control (LOCe) which together influence the audit judgment (ADJ).
The statistical test results for the independence variable obtained a t value of 0.702 and a significance level of 0.488 which was greater than 0.05 so that H1 was rejected, which means that independence has no effect on audit judgment;
The statistical test results for the professional ethics variable obtained a t value of -0.702 and a significance level of 0.489 which was greater than 0.05 so that H2 was rejected, which means that professional ethics has no effect on audit judgment;
The statistical test results for the time pressure variable obtained a t value of -0.758 and a significance level of 0.454 which was greater than 0.05 so that H3 was rejected, which means that time pressure has no effect on audit judgment;
The statistical test results for the task complexity variable obtained a t value of 0.933 and a significance level of 0.358 which was greater than 0.05 so that H4 was rejected, which means that task complexity has no effect on audit judgment;
The statistical test results for the internal locus of control variable obtained a t value of 3.590 and a significance level of 0.001 which is smaller than 0.05 so that H5 is accepted, which means that internal locus of control has a positive effect on audit judgment;
The statistical test results for the external locus of control variable obtained a t value of -2.425 and a significance level of 0.021 which was smaller than 0.05 so that H6 was accepted, which means that external locus of control has a negative effect on audit judgment.
The first hypothesis (H1) is rejected, this shows that independence has no effect on audit judgment. In this research, independence has no effect on audit judgment because in carrying out audit tasks, auditors do not work alone but work together with team members. The existence of good supervision and review of work from the senior audit team means that any errors that occur due to an auditor's lack of independence can be corrected by the audit team. So, whether an auditor has a high or low level of independence will not affect the resulting audit judgment. The results of this research are in line with research conducted by Primasari and Azzahra (2015), Oktaviana (2017, Yuliyana (2018), Islamie (2019) which states that independence has no effect on audit judgment.
The second hypothesis (H2) is rejected, this shows that professional ethics has no effect on audit judgment. The lack of influence of professional ethics on audit judgment is due to differences in views or interpretations of each auditor regarding the code of ethics. These different views or interpretations cause different implementation but still with the aim of complying with the code of ethics, these different views cannot change the applicable code of ethics. Therefore, professional ethics cannot influence audit judgment. The results of this research are in line with research conducted by Biyantari (2018) which states that professional ethics has no effect on audit judgment.
The third hypothesis (H3) is rejected, this shows that time pressure has no effect on audit judgment. Time pressure has no effect on audit judgment because an auditor before conducting an audit at a government agency must have experience in auditing the entity's financial statements, so that by having experience, the presence or absence of time pressure by superiors will not influence an auditor in determining an audit. judgment. The results of this research are in line with research conducted by Triatmaja (2018) which states that time pressure has no effect on audit judgment.
The third hypothesis (H4) is rejected, this shows that task complexity has no effect on audit judgment. There is no effect of task complexity on audit judgment because the auditor already has technical guidelines regarding the scope of work to be completed, so that the high or low complexity of the tasks faced does not influence the auditor in making audit judgment. The auditor knows what targets he must achieve in carrying out his duties so that it cannot affect the accuracy of the resulting judgment. An auditor who is able to face and complete complex tasks and understands the entity being audited, the judgment produced by the auditor will be more precise and accurate. The results of this research are in line with research conducted by Handayani (2017), Budiman (2018), and Kusumawardani (2019) which states that task complexity has no effect on audit judgment.
The fifth hypothesis (H5) is accepted, namely that internal locus of control has a positive effect on audit judgment. Internal locus of control is an individual's perception of an event, whether or not the individual can control an event that occurs. Individuals with an internal locus of control also tend to have a higher level of work, and have higher job satisfaction with their work and appear to be better able to withstand stress than an external locus of control. This effect indicates that increasing internal locus of control can increase audit judgment. The results of this research are in line with research conducted by Putri (2015), Dewi (2016), and Efendi (2017), which stated that internal locus of control has a positive effect on audit judgment.
The fifth hypothesis (H6) is accepted, namely that internal locus of control has a negative effect on audit judgment. This indicates that external locus of control influences the making and evaluating of auditors' judgments. Auditors who have an external locus of control tend to view a condition or situation as a threat or cause stress so that the judgment made by the auditor will experience a decrease in quality, and individuals with an external locus of control believe that success or success in carrying out a job is external. their control. The results of this research are in line with research conducted by Maengkom (2016), Pertiwi and Budhiarta (2017) which stated that external locus of control has a negative effect on audit judgment.
Independence has no effect on the audit judgment of the Bali Province Representative Audit Board (BPK RI).
Professional ethics has no influence on audit judgment at the Bali Province Representative Audit Board (BPK RI).
Time pressure has no effect on audit judgment at the Bali Province Representative Audit Board (BPK RI).
The complexity of the task does not affect the audit judgment of the Bali Province Representative Audit Board (BPK RI).
Internal locus of control has a positive effect on audit judgment at the Bali Province Representative Audit Board (BPK RI).
External locus of control has a negative effect on audit judgment at the Bali Province Representative Audit Board (BPK RI).
The results of the coefficient of determination test (adjusted R2) show that 34.7% of the independent variables in this research are able to clarify the audit judgment variable, while the remaining 65.3% is influenced by other variables not included in this research so that further research can use other variables. which can influence audit judgment at the Bali Province Representative Audit Agency, such as auditor experience, knowledge of audit standards, compliance pressures and so on, so that the data obtained can better describe the research object as a whole.
Original paper, i.e. Figures, Tables, References, and Authors' Contacts available at http://ivolgapress.com/journals/academ-craft/vol_01_article_03.pdf