Determination of Material and Pervasive Misstatement in Auditing

Managerial Auditing Journal, 2011

Purpose -This paper seeks to focus on the issue of materiality judgements and the need for public disclosure of materiality levels. Insights about the concept of materiality are drawn from the words of users of audited financial reports, auditee managements, suppliers to the market for audit services and auditing standard setters and regulators. Design/methodology/approach -This paper reports findings arising from face-to-face office interviews with individuals representing identified groups of stakeholders in the market for audit services about the issue of "materiality" as this concept is applied in auditing. The interviews canvassed many issues related to audit as part of a larger project entitled "The future of audit". Findings -In general, stakeholders perceive that the concepts involved in audit materiality are not well understood and they point to the difficulty in providing educative materiality about it, especially in relation to qualitative materiality, to retail investors in particular. There are mixed views as to whether the actual level of tolerable error, as per one of the meanings of materiality in the audit space, should be disclosed, with some feeling that it might be detrimental or dangerous. Practical implications -If incremental information about materiality is to be disclosed, the issue of where, what to whom, by whom and when arise. Various suggestions are made by stakeholders in respect of these questions. Originality/value -The paper concludes by drawing from the insights gained by the authors through the comments of participant stakeholders to make recommendations that deal with the issue of audit materiality.

The purpose of current study is to identify and evaluate the current state of key factors which influence the professional power of CPA from the perception of users in Iran. A questionnaire designed and developed in order to gathering data from financial mangers of listed companies in Tehran Stock Exchange during 2011. The results of the study show that there is a huge gap between the current states of auditors' specifications and users' demands. In the other hand users of audit services believe that, CPAs does not have sufficient professional power. The current paper is the first study which covers professional power of auditors in Iran so; it may help the Iranian condition to improve the auditors' professional powers.

2010

The assessment of a significant ascertainment made by the auditor is particularly sensitive which shapes the quality of a mission as a whole. Materiality plays a primary role in determining the relevance of information provided by the users of financial statements. This material highlights the role of qualitative factors in determining materiality, as far as many practitioners are accustomed to consider this item only in terms of quantitative factors. Although legislation does not set precise rules in determining materiality, the issue is necessary because decisions of the auditors and users of audited information hang on this item.

The International Journal of Business & Management, 2019

Opinion about the subject of a financial report makes the public accounting or auditor to be an important profesion. The auditor considers the decisions regarding opinions in the audit report whether or not the material of a commission is influenced by the professionalism and experience of the auditor. Previous research revealed that there were other factors that could weaken and strengthen the direct influence of auditor professionalism and auditor experience on materiality levels, namely professional ethics & client credibility. The number of samples in this study were 86 auditors. The sampling technique uses saturated samples. The number of respondents who filled in completely and returned the results of the questionnaire was 74 auditors. The analysis technique used is MRA. The test results show that (1) professional ethics is not able to moderate the influence of professionalism on the consideration of materiality levels, (2) professional ethics reinforces the experience of the auditor on consideration of materiality levels, (3) client credibility strengthens the influence of professionalism and auditor experience on materiality.

AFRE (Accounting and Financial Review), 2022

This study aims to determine whether independence, competence, professional skepticism, audit structure and role stress affect audit quality. This research was conducted on auditors who work at the Financial and Development Supervisory Agency (BPKP) RI Representatives of the Special Region of Yogyakarta (DIY). This study uses nonprobability sampling and obtained a sample of 34 people. Data was collected using a questionnaire method distributed to respondents. The results of this study indicate that independence, competence, professional skepticism and audit structure partially have a positive and significant effect on audit quality. Meanwhile, role stress (role conflict and role ambiguity) has a negative effect on audit quality.

2020

The title of this research is factors that affect audit quality. This research aims to know, analyze, and show the effects of the relationship between experience, auditor professionalism, time budget pressure, audit tenure, and knowledge of detecting errors on audit quality. The research population is all auditors at a public accounting firm in Jakarta. This research used a purposive sampling technique with some criteria for the research sample. The research sample obtained was 89 respondents. This research used survey technique as collecting the data with sharing questionnaire and multiple linear regression with SPSS software for the data analysis technique. The result of this study indicates that auditor experience and knowledge of detecting errors have a positive effect and significant on audit quality, whereas auditor professionalism, time budget pressure have a positive effect but not significant on audit quality and audit tenure have a negative effect but not significant on au...

Proceedings of the 3rd International Conference of Business, Accounting, and Economics, ICBAE 2022, 10-11 August 2022, Purwokerto, Central Java, Indonesia, 2022

This research aims to identify the model of audit knowledge, professionalism, accountability and independence of the quality of auditor work. Specifically this research aims to prove the influence of audit knowledge, professional commitment, accountability, and independence on the quality of auditor work. The population of this research are auditors working in the public accounting firms (KAP) and in the Audit Board of Indonesia (BPK) Central Java representative office. There were 100 questionnaire sheets sent directly to the auditors working in KAP Semarang and BPK Central Java representative office. The questionnaires were sent and given for two months, and the researchers also visited the auditors in person. To complete the data and discussion, a depth interview to the auditors who were randomly selected was conducted. In this case, the hypothesis testing was done using multiple regression to analyze the relationship between the dependent variable (quality of auditor work) and the independent variables (audit knowledge, professional commitment, accountability, and independence). The general form of the formula for multiple linear regression in this research is: Y = α + β1X1 + β2X2 + β3X3 + β4X4 + ε. The results of this research can prove the hypothesis, that the four independent variables (audit knowledge, professional commitment, accountability, and independence) have a significant positive influence on the quality of auditor work. There are positive and significant influences of professional commitment and accountability on the quality of auditor work. Meanwhile, audit knowledge and independence have no positive influence on the quality of auditor work.

2012

This research was motivated by the global crisis that occurred in 2008, which resulted in the leaders of the G20 countries (in the London Summit 2008) decided some of the policies to be taken in the reform of the economy. One of the important policies to increase transparency and accountability of financial reporting in capital markets, including improving the quality of audits of public accounting to ensure transparency and accuracy of corporate financial information. The population on this research was the Auditor's Ofice Public Accountant IAI compartments * registered public accountant on 2009 in Bandung, amounting to 27 KAP. The design used in this research was an explanation (explanatory research) with descriptive and verification method research approach, because it explained the causal relationship between variables by testing the hypothesis. Data analysis in this research used the multiple linear regression method. The results was showed in this study that the Auditor te...

ACEBISS 201

Rapid business competition causes companies to improve the quality of products and services produced. In addition to improving the quality of its output, companies also need the services of a reliable auditor to examine financial statements so that they can be trusted with fairness. However, there is a phenomenon that the Public Accountant has not fully obtained sufficient and appropriate audit evidence and has not fully complied with the professional code of ethics in accepting and carrying out audit engagements. The purpose of this study is to find empirical evidence about the effect of audit evidence and enforcement of the code of ethics on audit quality, and to know the impact simultaneously, as well as partially. The research sample was taken using a purposive sampling technique that is as many as 54 public accountants in the city of Bandung, West Java-Indonesia. The statistical method used to test the hypothesis is multiple regression. The results of this study by using the test of the coefficient of determination obtained the value of the coefficient of determination or R-square of 23.8%, which shows the variable that the audit evidence and ethics code enforcement variables simultaneously influence the audit quality variable. Furthermore, a partial test of audit evidence has a significant positive effect on audit quality, but the enforcement of a code of ethics does not affect audit quality.

IMPACT: International Journal of Research in Business Management, 2018

Auditors' characteristics have effects on the quality of financial information which is fundamental to users' decision-making. This study was done in order to evaluate the auditors' characteristics and quality of financial information provided. The main problem studied is that management prepares financial statements that contain financial information, in order to be useful for decision making by different stakeholders and management services, a proper examination of such information in today's business environment and legal framework requires the assurance, credibility, and confidence from a third party that will certify what managers have reported. Thus, auditors are required to demonstrate certain qualities in conducting such work. This study followed exploratory research design. Findings demonstrated that auditors should possess technical and functional qualities (ethical skills, technical and competence skills, independent mind and in appearance, objectivity and other human skills for communication and relationships) which all help them to be effective examiners and assessors of financial information quality in terms of relevance, reliability, comparability, and understandability for clear decision making. The empirical studies demonstrated the negative effects of bad auditors' behaviors on violation of audit and professional standards and the study concluded and recommended that audit services are considered as financial, medical services to different beneficiaries and that auditors should protect their profession and stakeholders' interests.