Implications on external audit practices resulting from material misstatements in Indonesia / Triyanto Parno Suwito
The inception of Sarbanes Oxley by the United States government was due to the many cases of corporate fraud that affected public accounting firms. Researchers can see the cases experienced by KAP Purwanto, Suherman and Surja, Public Accountant Marlinna and Public Accountant Merliyana Syamsul and Ac...
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| Main Author: | |
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| Format: | Thesis |
| Language: | English |
| Published: |
2022
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| Online Access: | https://ir.uitm.edu.my/id/eprint/75230/1/75230.pdf |
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| Summary: | The inception of Sarbanes Oxley by the United States government was due to the many cases of corporate fraud that affected public accounting firms. Researchers can see the cases experienced by KAP Purwanto, Suherman and Surja, Public Accountant Marlinna and Public Accountant Merliyana Syamsul and Accounting Firm Satrio, Bing, Eny and Partners (SBE) were sanctioned because they were proven to have failed to carry out an audit based on existing procedures. The purpose of this study was to determine what factors could influence the determination of the auditor's Risk Material Misstatement (RMM). There are three main factors that can influence RMM which is the focus of this study, namely government regulatory factors, individual factors and cultural factors. This research is qualitative research and leads to an interpretive paradigm. Sources of data come from interviews with auditors Pricewaterhouse Coopers (PwC), Ernest and Young (EY), Deloitte, KPMG, Doli Bambang Sulistyanto Dadang & Ali (DBSD & A) and regulators namely IAPI and the Financial Services Authority (OJK). The results showed that the factors affect the level of risk of material misstatement are due to government regulatory factors, individual factors and cultural factors. Government regulatory factors that can influence auditors in determining RMM can: 1) encourage an increase in personnel capabilities, 2) increase in skill abilities, and 3) self-awareness of the ability to carry out duties and responsibilities. To increase good cooperation with regulators, it is necessary to hold open discussions from the government and auditors so that the supervisory function can also be carried out properly. Then the individual factors that can influence the determination of the Auditor's RMM include: 1) understanding of culture and governance, 2) determination of risk, 3) potential and human resources owned by the auditor. The determination of government culture in relation to the rules made by the government regarding the performance of auditors must be understood and implemented by the auditors concerned. Then, the determination of risk must be carried out carefully by the auditor even though there is no 100% guarantee that the auditor's work is error free. The competence and human resources possessed by the auditor must then be augmented with competent knowledge and understanding by participating in educational activities conducted by companies or governments. On the other hand, cultural factors in the field of auditing that influence auditors are less critical or profound, contributing factors that do not genuinely accept the distribution. The competence of auditors in determining RMM is still not optimal and standards or lack of supervision. This, shows that increasing the competence of auditors must always be improved by participating in training related to the duties and responsibilities they carry. Standards or supervision must also be improved by examining the performance of auditors in relation to the tasks they have carried out and then making SOPs (Standard Operating Standards) to be used as guidelines for auditors in their work. |
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