Do work experience, good governance, and independence influence the audit quality?

Abstract

Financial auditors play an important role in the financial reporting of business entities. The auditor must examine the report or bookkeeping company. When conducting its audit work, auditors are required to have competence in accounting or finance and always maintain an independent attitude. Even so, until now there are still many people who doubt the competence and independence of public accountants. This is compounded by the many cases involving the public accounting profession, in many financial statement fraud cases that occurs worldwide such as the Enron, Phar-Mor, Crazy Eddie case. This study aims to analyze in order to obtained statistical result regarding how auditor work experience, understanding of Good Governance (GG), independence of auditor influenced quality of the audit result. The sample in our study was obtained by using a purposive sampling method for certified auditor firm in the Jakarta Special Capital Region. We have 200 auditors as our respondents from various audit firms. Hypothesis testing is done by using ordinary least square. We used determination of coefficient, t test and f test. On the conclusion, we have evidence that good governance variable significantly influences audit quality, while work experience variables and independence variable do not significantly influence audit quality. Our study also stated that all the independent variables give influence magnitude 64.8 percent for explaining quality of audit.