The role of intrinsic motivation in mediating the impact of auditor characteristics on audit quality in Indonesia

Authors

  • Anak Agung Bagus Amlayasa Universitas Warmadewa
  • I Made Sudarma Universitas Brawijaya
  • Imam Subekti Universitas Brawijaya

Keywords:

Knowledge, experience, independence, intrinsic motivation, audit quality

Abstract

Purpose The research aims to empirically test the role of intrinsic motivation in mediating the influence of auditor characteristics on audit quality. The use of intrinsic motivation as a mediation variable is intended to clarify the influence of the various individual characteristics of a particular auditor on the quality of the results of the audit work.

Design/methodology/approach The study was conducted on 110 auditors from various Public Accounting Offices using the snowballing survey approach and Partial Least Square (PLS) analysis with the help of SmartPLS 3.2.9.

Findings The research finds that intrinsic motivation is influenced by the knowledge and independence of the auditor and, consequently, that internal motivation, knowledge, and independentness of the auditors affect the audit quality. The study also demonstrated that the intrinsic motivation of auditors has a low influence in mediating the influence of audit knowledge on the audit quality and that the auditor's instrumental motivation tends to have a moderate influence on mediating the relationship of independence with the audit authority. Furthermore, it was found that audit experience did not affect the intrinsic motivation and quality of the audit.

Practical implicationsBased on the findings, auditors and public accounting firms are advised to reevaluate the quality of their audit through knowledge, independence, and intrinsic motivation. The results of this empirical research have successfully demonstrated that the audit quality is improved by influencing the characteristic audit resource quality.

Professional knowledge and independence with the mediation of intrinsic motivation, although its influence is still low and moderate.

Originality/value The findings support the development of the self-determination theory in explaining the role of the human capital theory as justification for the influence of auditor characteristics in improving the quality of its audit.

Keywords Knowledge, experience, independence, intrinsic motivation, and audit quality.

Paper type Research Paper

References

Akkerman, S., Admiraal, W., Brekelmans, M., & Oost, H. (2008). Auditing quality of research in social sciences. Quality and Quantity, 42(2), 257–274. https://doi.org/10.1007/s11135-006-9044-4

Ardhani, L., Subroto, B., & Hariadi, B. (2019). Does auditor independence mediate the relationship between auditor rotation and audit quality? Jabe (Journal of Accounting and …. http://journal2.um.ac.id/index.php/jabe/article/view/8145

Bonner, S. E., & Lewis, B. L. (1990). Determinants of Auditor Expertise. Journal of Accounting Research, 28, 1–20.

Chen, X., Dai, Y., Kong, D., & Tan, W. (2017). Effect of international working experience of individual auditors on audit quality: Evidence from China. Journal of Business Finance and Accounting, 44(7–8). https://doi.org/10.1111/jbfa.12257

Cheng, Y. S., Liu, Y. P., & Chien, C. Y. (2009). The association between auditor quality and human capital. Managerial Auditing Journal, 24(6), 523–541. https://doi.org/10.1108/02686900910966512

Chi, W., Myers, L. A., Omer, T. C., & Xie, H. (2017). The effects of audit partner pre-client and client-specific experience on audit quality and on perceptions of audit quality. Review of Accounting Studies, 22(1). https://doi.org/10.1007/s11142-016-9376-9

Chiang Christina. (2016). Conceptualizing the linkage between professional skepticism and auditor independence. Pacific Accounting Review, 28(2), 180–200. https://doi.org/10.1108/PAR-08-2015-0034

DeAngelo, L. E. (1981). Auditor size and audit quality. Journal of Accounting and Economics. https://doi.org/10.1016/0165-4101(81)90002-1

Deci, E. L., & Ryan, R. M. (1985). Intrinsic Motivation and Self-Determination in Human Behavior. In Plenum Press. https://doi.org/10.1007/978-1-4899-2271-7

Du, X., Yin, J., & Hou, F. (2018). Auditor human capital and financial misstatement: Evidence from China. China Journal of Accounting Research, 11(4), 279–305. https://doi.org/10.1016/j.cjar.2018.06.001

Fearnley, S., Hines, T., McBride, K., & Brandt, R. (2002). The impact of the financial reporting review panel on aspects of the independence of auditors and their attitudes to compliance in the UK. British Accounting Review, 34(2). https://doi.org/10.1006/bare.2002.0192

Fossung, M. F., & La Fortune, M. W. S. (2019). External audit and quality of accounting and financial information in Cameroonian companies. European Journal of Accounting, Auditing and Finance Research, 7(3), 55–72.

García-Blandon, J., Argilés-Bosch, J. M., & Ravenda, D. (2020). Learning by doing? partners audit experience and the quality of audit services. Spanish Accounting Review, 23(2), 197–209. https://doi.org/10.6018/rcsar.366921

Gul, F. A., Wu, D., & Yang, Z. (2013). Do individual auditors affect audit quality? Evidence from archival data. Accounting Review, 88(6), 1993–2023. https://doi.org/10.2308/accr-50536

Halim, A., Sutrisno, T., & Achsin, M. (2014). Effect of Competence and Auditor Independence on Audit Quality with Audit Time Budget and Professional Commitment as a Moderation Variable. International Journal of Business and Management Invention, 3(6).

Iskandar, R., Ramadhan, M. S., Mansyuri, M. I., & Ramadhan, R. (2022). Determinants of Auditor’s Ability to Detect Fraud: Internal and External Factors. International Journal of Science, Technology & Management, 3(1). https://doi.org/10.46729/ijstm.v3i1.452

Kaawaase, T. K., Bananuka, J., Peter Kwizina, T., & Nabaweesi, J. (2019). Intellectual capital and performance of small and medium audit practices: The interactive effects of professionalism. Journal of Accounting in Emerging Economies. https://doi.org/10.1108/JAEE-03-2018-0032

Kadous, K., & Zhou, Y. (2019). How Does Intrinsic Motivation Improve Auditor Judgment in Complex Audit Tasks? Contemporary Accounting Research, 36(1), 108–131. https://doi.org/10.1111/1911-3846.12431

Kang, M., Lee, H. Y., Son, M., & Stein, M. (2017). The association between human resource investment by audit firms and their audit quality*. Asia-Pacific Journal of Accounting and Economics, 24(3–4), 249–271. https://doi.org/10.1080/16081625.2016.1214605

Kantohe, M. S. S., Sudarma, M., Subekti, I., & Adib, N. (2021). Determinants of Internal Audit Quality in Provincial Government. Turkish Online Journal of Qualitative Inquiry (TOJQI), 12(6), 684–694.

Lamboglia, R., & Mancini, D. (2021). The relationship between auditors’ human capital attributes and the assessment of the control environment. Journal of Management and Governance, 25(4), 1211–1239.

Mautz, R. K., & Sharaf, H. A. (1993). The Philosophy of Auditing. In American Accounting Association.

Miller, K. A., Deci, E. L., & Ryan, R. M. (1988). Intrinsic Motivation and Self-Determination in Human Behavior. Contemporary Sociology, 17(2). https://doi.org/10.2307/2070638

Patrick, Z., Vitalis, K., & Mdoom, I. (2017). Effect of Auditor Independence on Audit Quality: A Review of Literature. International Journal of Business and Management Invention ISSN, 6(3).

Ryan, Richard, M., & Deci, Edward, L. (2000). Self-Determination Theory and the Facilitation of Intrinsic Motivation, Social Development, and Well-Being. American Psychologist, 55(1).

Ryan, R. M., & Deci, E. L. (2017). Self-Determination Theory: Basic Psychological Needs in Motivation, Development, and Wellness. In The Guilford Press. https://doi.org/10.1521/978.14625/28806

Ryan, R. M., & Deci, E. L. (2020). Intrinsic and extrinsic motivation from a self-determination theory perspective: Definitions, theory, practices, and future directions. Contemporary Educational Psychology, 61. https://doi.org/10.1016/j.cedpsych.2020.101860

Sila, M., Subroto, B., Baridwan, Z., & Rahman, A. F. (2015). The Effect of Knowledge and Experience on Professional Auditor ’ s Judgment : Study on State Auditor in Indonesia. International Journal of Management and Administrative Sciencesurnal of Management and Administrative Sciences, 3(10), 98–106.

Tepalagul, N., & Lin, L. (2015). Auditor independence and audit quality: A literature review. Journal of Accounting, Auditing & Finance, 30(1), 101–121.

Vergara, M. J., & DeValle, M. (2021). From the Basic Psychological Needs Satisfaction to Intrinsic Motivation: Mediating Effect of Academic Integration. Frontiers in Psychology, 12. https://doi.org/10.3389/fpsyg.2021.612023

Ye, K., Cheng, Y., & Gao, J. (2014). How individual auditor characteristics impact the likelihood of audit failure: Evidence from China. Advances in Accounting, 30(2). https://doi.org/10.1016/j.adiac.2014.09.013

Published

01-12-2024

How to Cite

The role of intrinsic motivation in mediating the impact of auditor characteristics on audit quality in Indonesia. (2024). The International Journal of Accounting and Business Society, 32(3). https://ijabs.ub.ac.id/index.php/ijabs/article/view/740

Similar Articles

1-10 of 96

You may also start an advanced similarity search for this article.

Most read articles by the same author(s)