The Influence Of Accountability, Competencies, Professionalism, Integrity And Objectivity Of Public Accountants On Audit Quality With Independence As Moderating Variables (empirical Studies In Medan City KAP)

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The Influence of Accountability, Competencies, Professionalism, Integrity, and Objectivity of Public Accountants on Audit Quality in Medan City: The Role of Independence as Moderating Variables

Introduction

The audit process is a crucial aspect of ensuring the accuracy and reliability of financial statements. Public accountants play a vital role in this process, and their professionalism, integrity, and objectivity are essential in maintaining audit quality. However, the relationship between these variables and audit quality is complex, and the role of independence as a moderating variable is not well understood. This study aims to examine the effect of accountability, competence, professionalism, integrity, and objectivity of public accountants on audit quality in Medan City, Indonesia, with independence as a moderating variable.

Methodology

This study uses an associative quantitative method, with a research population covering all public accounting firms in Medan City. A questionnaire was distributed to 120 respondents, representing the entire population of public accounting firms in Medan. Data were analyzed using descriptive statistics and sem-partial least square (PLS) with the help of SmartPLS 3.0 software.

Results

The results of this study show that professionalism and integrity have a positive influence on audit quality, while accountability, competence, and objectivity have a negative influence. The independence variable plays a complex role, weakening the effect of accountability, competence, and professionalism on audit quality, but strengthening the effect of integrity and objectivity on audit quality.

Deeper Analysis

Positive Influence of Professionalism and Integrity

The results of this study indicate that professionalism and integrity have a significant positive influence on audit quality. This is in line with the audit theory, which states that a professional and high-integrity public accountant will produce a higher quality audit. Professionalism includes technical competencies, knowledge, and professional ethics, while integrity refers to honesty, objectivity, and commitment to the principles of ethics.

Negative Effects of Accountability, Competencies, and Objectivity

The results showing the negative effects of accountability, competence, and objectivity on audit quality may seem contradictory. However, this can be explained by paying attention to the research context. Accountability that is too high may lead to excessive compliance behavior, where public accountants are more focused on fulfilling formal rules than the actual audit quality. Low competencies may be caused by lack of training and development, which results in the inability of public accountants to carry out the audit task well. Low objectivity can be caused by conflicts of interest, bias, or pressure from the client.

The Role of Independence as a Moderating Variable

Independence is an important factor in the audit. The results of this study indicate that independence weakens the effect of accountability, competence, and professionalism, but strengthens the effect of integrity and objectivity. This shows that independence can be a counterweight in the relationship between these variables and audit quality.

Implications and Recommendations

The results of this study have important implications for practitioners and stakeholders in the field of audit.

Strengthening Professionalism and Integrity

Public Accounting Firms need to prioritize the development of professionalism and integrity of their public accountants. This can be done through a sustainable training program, the development of professional ethics, and the application of a strong internal control system.

Re-evaluation of Accountability

It is necessary to evaluate the accountability system in a public accounting firm. Excessive accountability systems can hamper audit quality.

Increasing Competencies and Objectivity

Increased competencies can be done through training and professional certification, while objectivity can be increased through mechanisms such as peer review and strengthening professional ethics.

Importance of Independence

Independence is an important factor in the audit. The Public Accounting Firm needs to ensure that their auditors are truly independent of clients and are in conditions that allow them to carry out the audit task objectively.

Conclusion

This research makes an important contribution in understanding the relationship between accountability, competencies, professionalism, integrity, and objectivity of public accountants with audit quality. This study also highlighted the important role of independence as a moderating variable in the relationship. The results of this study are expected to be input for practitioners and stakeholders in the field of audit to improve audit quality in Indonesia.

Limitations of the Study

This study has several limitations. Firstly, the study was conducted in Medan City, Indonesia, and the results may not be generalizable to other cities or countries. Secondly, the study relied on a questionnaire survey, which may be subject to biases and limitations. Finally, the study did not examine the impact of other factors, such as firm size and industry, on the relationship between accountability, competencies, professionalism, integrity, and objectivity of public accountants with audit quality.

Future Research Directions

Future research should aim to replicate this study in other cities and countries to increase the generalizability of the results. Additionally, future research should examine the impact of other factors, such as firm size and industry, on the relationship between accountability, competencies, professionalism, integrity, and objectivity of public accountants with audit quality. Finally, future research should investigate the effectiveness of different mechanisms, such as training and professional certification, in increasing competencies and objectivity of public accountants.

References

  • [List of references cited in the study]

Appendix

  • [Appendix containing additional information, such as the questionnaire used in the study and the data analysis results]
    Q&A: The Influence of Accountability, Competencies, Professionalism, Integrity, and Objectivity of Public Accountants on Audit Quality in Medan City

Q: What is the main objective of this study?

A: The main objective of this study is to examine the effect of accountability, competence, professionalism, integrity, and objectivity of public accountants on audit quality in Medan City, Indonesia, with independence as a moderating variable.

Q: What is the significance of this study?

A: This study is significant because it provides insights into the relationship between accountability, competencies, professionalism, integrity, and objectivity of public accountants with audit quality. The results of this study can be used by practitioners and stakeholders in the field of audit to improve audit quality in Indonesia.

Q: What are the key findings of this study?

A: The key findings of this study are:

  • Professionalism and integrity have a positive influence on audit quality.
  • Accountability, competence, and objectivity have a negative influence on audit quality.
  • Independence weakens the effect of accountability, competence, and professionalism on audit quality, but strengthens the effect of integrity and objectivity on audit quality.

Q: What are the implications of this study?

A: The implications of this study are:

  • Public Accounting Firms need to prioritize the development of professionalism and integrity of their public accountants.
  • The accountability system in a public accounting firm needs to be evaluated to ensure that it does not hamper audit quality.
  • Increased competencies can be done through training and professional certification, while objectivity can be increased through mechanisms such as peer review and strengthening professional ethics.
  • Independence is an important factor in the audit, and public accounting firms need to ensure that their auditors are truly independent of clients and are in conditions that allow them to carry out the audit task objectively.

Q: What are the limitations of this study?

A: The limitations of this study are:

  • The study was conducted in Medan City, Indonesia, and the results may not be generalizable to other cities or countries.
  • The study relied on a questionnaire survey, which may be subject to biases and limitations.
  • The study did not examine the impact of other factors, such as firm size and industry, on the relationship between accountability, competencies, professionalism, integrity, and objectivity of public accountants with audit quality.

Q: What are the future research directions?

A: Future research should aim to replicate this study in other cities and countries to increase the generalizability of the results. Additionally, future research should examine the impact of other factors, such as firm size and industry, on the relationship between accountability, competencies, professionalism, integrity, and objectivity of public accountants with audit quality. Finally, future research should investigate the effectiveness of different mechanisms, such as training and professional certification, in increasing competencies and objectivity of public accountants.

Q: What are the practical implications of this study?

A: The practical implications of this study are:

  • Public Accounting Firms need to prioritize the development of professionalism and integrity of their public accountants.
  • The accountability system in a public accounting firm needs to be evaluated to ensure that it does not hamper audit quality.
  • Increased competencies can be done through training and professional certification, while objectivity can be increased through mechanisms such as peer review and strengthening professional ethics.
  • Independence is an important factor in the audit, and public accounting firms need to ensure that their auditors are truly independent of clients and are in conditions that allow them to carry out the audit task objectively.

Q: What are the policy implications of this study?

A: The policy implications of this study are:

  • Regulatory bodies need to ensure that public accounting firms prioritize the development of professionalism and integrity of their public accountants.
  • Regulatory bodies need to evaluate the accountability system in public accounting firms to ensure that it does not hamper audit quality.
  • Regulatory bodies need to promote the development of competencies and objectivity of public accountants through mechanisms such as training and professional certification.
  • Regulatory bodies need to ensure that public accounting firms maintain the independence of their auditors and provide them with the necessary conditions to carry out the audit task objectively.