The Influence Of Ethics, Motivation, Independence And Competence On Audit Quality In The Inspectorate Of North Sumatra Province

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The Influence of Ethics, Motivation, Independence, and Competence on Audit Quality in the Inspectorate of North Sumatra Province

Introduction

The quality of audits conducted by regional inspectorates is a critical aspect of ensuring accountability and transparency in regional finance management. However, the audit process is often plagued by issues such as undetected audit findings, which can lead to a lack of trust in the audit results. This study aims to explore the effect of competencies, independence, and motivation on the quality of audits conducted by the Inspectorate of North Sumatra Province. The study focuses on the following research questions: (1) What is the effect of ethics, motivation, independence, and competence on audit quality? (2) How do these variables contribute to the overall audit quality?

Background of the Study

The Inspectorate of North Sumatra Province is responsible for conducting audits of regional finances to ensure accountability and transparency. However, a recent audit finding that was not detected by internal auditors but was discovered by an external auditor from the Supreme Audit Agency (BPK) highlights a problem in the audit process. This phenomenon is the background of this study, which aims to investigate the factors that affect audit quality.

Methodology

This study uses a quantitative approach, with data collected through a questionnaire distributed to respondents. The population studied includes all auditors working in the North Sumatra Province Inspectorate who were involved in routine examinations. The research methods used in this thesis include data quality testing, descriptive statistical analysis, classical assumption tests, and hypothesis tests. The independent variables consist of ethics (X1), motivation (X2), independence (X3), and competence (X4), while the dependent variable is audit quality (Y). The data collected is analyzed using multiple linear regression analysis.

Results

The results of this study indicate that ethical and independence variables have no significant influence on audit quality. Conversely, competence and motivation have been proven to have a positive and significant influence on the quality of the audit conducted by the Inspectorate apparatus. This indicates that the increase in auditor competencies and motivation can have an impact on better and more accurate audit results. The coefficient of determination also indicates that collectively, ethics, motivation, independence, and competency contribute to audit quality.

Deeper Analysis

The importance of ethics and independence in audit practices should not be ignored, although this study shows that both have no significant influence on audit quality. Auditor's ethics will determine the integrity and trust of the public of the audit results. While independence ensures that the auditor can carry out their duties without pressure or influence from outsiders. This means, although statistically does not have a significant effect in this study, in practice these two variables remain an important foundation for auditors in carrying out their duties.

On the other hand, competence and motivation are a more tangible key in determining audit quality. Auditor competence in understanding the technical aspects and appropriate audit methodology will directly affect the effectiveness of audit. Meanwhile, high motivation will encourage auditors to be more proactive and thorough in carrying out their duties. Therefore, the development of human resources, quality training, and increasing motivation becomes strategic steps that need to be prioritized by the Inspectorate.

Conclusion

This research provides a clear picture of the factors that affect audit quality. The study highlights the importance of competence and motivation in determining audit quality, while ethics and independence remain important foundations for auditors in carrying out their duties. The findings of this study have implications for the Inspectorate of North Sumatra Province, which can use the results to improve audit quality and ensure accountability and transparency in regional finance management.

Recommendations

Based on the findings of this study, the following recommendations are made:

  1. The Inspectorate of North Sumatra Province should prioritize the development of human resources, including quality training and increasing motivation, to improve audit quality.
  2. The Inspectorate should ensure that auditors have the necessary competence to carry out their duties effectively.
  3. The Inspectorate should maintain the importance of ethics and independence in audit practices, even though they may not have a significant influence on audit quality.
  4. The Inspectorate should use the results of this study to improve audit quality and ensure accountability and transparency in regional finance management.

Limitations of the Study

This study has several limitations, including:

  1. The study only focuses on the Inspectorate of North Sumatra Province, which may not be representative of other regional inspectorates.
  2. The study uses a quantitative approach, which may not capture the nuances of audit quality.
  3. The study only examines the effect of ethics, motivation, independence, and competence on audit quality, and does not consider other factors that may affect audit quality.

Future Research Directions

This study provides a foundation for future research on audit quality. Future studies can build on the findings of this study by:

  1. Examining the effect of other factors on audit quality, such as technology and communication.
  2. Investigating the impact of audit quality on regional finance management.
  3. Developing a more comprehensive model of audit quality that incorporates multiple factors.

References

  • [List of references cited in the study]

Appendices

  • [Appendices, including questionnaires, data analysis, and other supporting materials]
    Frequently Asked Questions (FAQs) about the Influence of Ethics, Motivation, Independence, and Competence on Audit Quality

Q: What is the main objective of this study?

A: The main objective of this study is to explore the effect of competencies, independence, and motivation on the quality of audits conducted by the Inspectorate of North Sumatra Province.

Q: What is the significance of this study?

A: This study is significant because it provides a clear picture of the factors that affect audit quality, which is critical for ensuring accountability and transparency in regional finance management.

Q: What are the independent variables in this study?

A: The independent variables in this study are ethics (X1), motivation (X2), independence (X3), and competence (X4).

Q: What is the dependent variable in this study?

A: The dependent variable in this study is audit quality (Y).

Q: What is the research methodology used in this study?

A: The research methodology used in this study includes data quality testing, descriptive statistical analysis, classical assumption tests, and hypothesis tests.

Q: What is the population studied in this research?

A: The population studied in this research includes all auditors working in the North Sumatra Province Inspectorate who were involved in routine examinations.

Q: What are the findings of this study?

A: The findings of this study indicate that ethical and independence variables have no significant influence on audit quality, while competence and motivation have a positive and significant influence on the quality of the audit conducted by the Inspectorate apparatus.

Q: What are the implications of this study?

A: The implications of this study are that the Inspectorate of North Sumatra Province should prioritize the development of human resources, including quality training and increasing motivation, to improve audit quality.

Q: What are the limitations of this study?

A: The limitations of this study include the fact that it only focuses on the Inspectorate of North Sumatra Province, which may not be representative of other regional inspectorates, and that it uses a quantitative approach, which may not capture the nuances of audit quality.

Q: What are the future research directions based on this study?

A: The future research directions based on this study include examining the effect of other factors on audit quality, such as technology and communication, and investigating the impact of audit quality on regional finance management.

Q: What are the recommendations based on this study?

A: The recommendations based on this study include prioritizing the development of human resources, ensuring that auditors have the necessary competence to carry out their duties effectively, maintaining the importance of ethics and independence in audit practices, and using the results of this study to improve audit quality and ensure accountability and transparency in regional finance management.

Q: What is the significance of ethics and independence in audit practices?

A: Ethics and independence are significant in audit practices because they determine the integrity and trust of the public of the audit results, and ensure that the auditor can carry out their duties without pressure or influence from outsiders.

Q: What is the significance of competence and motivation in audit practices?

A: Competence and motivation are significant in audit practices because they directly affect the effectiveness of audit, and encourage auditors to be more proactive and thorough in carrying out their duties.

Q: What are the benefits of improving audit quality?

A: The benefits of improving audit quality include ensuring accountability and transparency in regional finance management, and providing a clear picture of the factors that affect audit quality.