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Suratno Suratno, Syahril Djaddang, Shinta Astuti. "SELF-EFFICACY MEDIATES THE RELATIONSHIP BETWEEN INDIVIDUALISM CULTURE AND AUDIT QUALITY:
EVIDENCE FROM INDONESIA", International Journal of Business Research, 2017
The Role of Self Efficacy of The Professionalism of Accountants, Auditors Individual Cultural Relations With Government Quality Investigative Audit (Study on Auditor BPK Government In Jakarta) Suratno1, Syahril Djaddang2, Shinta Budi Astuti3, Bambang Supriatno4 1. Magister
Akuntansi Universitas Pancasila Jakarta, Indonesia 2. Magister
Akuntansi Universitas Pancasila Jakarta, Indonesia 3. FEB Universitas Pancasila Jakarta, Indonesia 4. FEB Universitas Pancasila Jakarta, Indonesia Email:[email protected]/
[email protected] Abstract This study aims to determine the effect of culture on the quality of the individual auditor in the
auditor BPK investigative audit, verify the role of self- efficacy
perofesionalisme accountants and auditors to analyze the individual culture has an influence on the quality of the BPK investigative audit. To achieve these objectives the researchers used several approaches or theories. The approach used is the stakeholder theory, the theory of efficacy and Social Cognitive theory, cultural individual auditors and audit quality investigative. The method used in this study with a random sample populations BPK auditor in Jakarta as many as 288 auditors and investigative auditors sample as much 69 BPK auditor. The sampling method in this study using snowball sampling method. Analysis of data using analysis tools Structural Equation Modeling with WarpPLS Program 4.0. Variance or component is based Structural Equation Modeling was used to test the hypothesis. The results of this study describes the role of self-efficacy on cultural relations individual auditor positive and
significant impact on the quality of investigative audit, which means that
individual cultures auditor diverse applied in the CPC to further improve the quality of an audit investigation, because the culture of the
individual auditor based on local wisdom of each region and self eficacy as mediator on audit quality and inclusive adhesive soul potential
(independence, competence, and practice investigative audit process knowledge) government auditor excel in Indonesia. Keywords: Self- efficacy, Social Cognitive, and stakeholders I. Introduction Since Enron, a giant company in the US committed horrendous scandal colluded with the firm Arthur Anderson. The scandal began with the story of the
destruction of thousands of e-mails and other documents related to Enron audited by officials at the auditing firm Arthur Andersen.
According to the Asian Wall Street Journal, this causes the client to switch to another auditor Andersen. Deloitte Touche and (10%), KPMG (11%), Price water Cooper (20%), and Ernst & Young (28%). And the rest move on to other small auditor or do not know where (40%).
Corruption in Indonesia began a familiar surrounding communities in 1997-1998, during the fall of the new order followed by the prolonged economic crisis. Corruption has become a culture invidu certain
elements and has penetrated almost all sectors of the public, law and economics in the state system of Indonesia, but corruption is often not covered by law, so do not be surprised if Indonesia was ranked third as the most corrupt country in the world like some examples cases in Indonesia which is now being hotly discussed, such as the case of bank century bailout scandal, hambalang scandal, corruption, embezzlement of homestead development athletes. While some overseas examples of cases in the United States, such as the Enron case that led to the
bankruptcy of 70 billion lost in a very large market capitalization
significant number of investors, employees and retirees. Stakeholders in the field of audit, a wide range of studies to try to connect cultures to the audit process. Some studies tend to compare countries with similar cultural backgrounds. For example, Umar and Anandarajan (2004)
"investigate the pressure faced by auditors and the reaction to this
pressure in a cultural environment that is the same as the United Stated and Australia," according to Hofstede 's cultural dimensions (2001).
Research Perdany and Suranta (2013) Effect of Competence Auditor Independence and the Quality audit Office investigative at BPK-RI Yogyakarta "to the conclusion that competence variables have an
influence on the quality of the investigative audit, independence variable does not affect the quality of investigative audits. in the field of
auditing. Audit quality impact on national culture and core business activities, capital structure (Chui et al., 2002) to the group's
performance Auditor (Gibson, 1999). Donaldson (2003) and Shoaf (2008) noted when Arthur Andersen was indicted for his role in the Enron case, that although many companies have never heard of Enron, the entire culture of the company are under indictment. Wyatt (2004) argued that companies such as Andersen culture had changed from one of professionalism to one of greed and individual cultural change
towards a professional. The importance of the cultural characteristics of individual auditors in accounting, and indirectly in the process of audit, documented in numerous studies. Agacer and Doupnik (1991), Arnold and Bernardi (1997), Cohen et al. (1995), Doupnik and Salter (1995), Kachelmeier and Shehata (1997), Lampe and Sutton (1995), and Siegel et al. (1997) noted that There is a clear cultural differences have
properties in accounting research. The study of self-efficacy comes from the theory of self-efficacy is a belief, attitude and willingness to grow and become professionals including illustrated in the field of accounting and auditing is the professionalism of accountants based culture to
improve the quality of investigative audits in the field of forensic accounting and investigative audits. The purpose of this study was to determine the individual culture auditor has an influence on the quality of investigative audits and whether the auditor culture has an influence on the quality of investigative audits when mediated by self-efficacy professionalism of accountants. To achieve adequate quality
investigative audits required Self-efficacy professionalism individual culture-based accountant auditor. II. Theoretical Framework The approach used is the stakeholder theory, the theory of efficacy and Social Cognitive theory, cultural individual auditors and audit quality investigative described in state of the art as follows: Theory of Self
Efficacy Self-efficacy is what a person believes he can achieve using her skills in specific circumstances (Snyder & Lopez, 2007). Self-efficacy has been regarded as a version of self-esteem (Lunenburg, 2011). The basic principle of the theory of Self- Efficacy. Assessment of self-efficacy is generally measured by three basic scale: scale, strength, and
general. Self-efficacy theory is that the performance and motivation is partly determined by how effectively people believe (Bandura, 1982; as cited in Redmond, 2010). This theory is illustrated in a quote by
Mahatma Gandhi the following: Figure 1: Self Efficacy Sources of Information Sources: Bandura (1977) and Hofstede (1980:27) Self- Efficacy Self-Efficacy developed by Albert Bandura as part of a larger theory, Social Learning Theory (Ashford & LeCroy, 2010), which has developed into the Social Cognitive Theory (Levin, Culkin, & Perrotto, 2001). Social Cognitive Theory Social Cognitive Theory delivered by Bandura in response to dissatisfaction with the principles of behaviorism and psychoanalysis. In these two theories, the role of cognition in
motivation and role largely ignored situations (Bandura, 1977; as cited in Redmond, 2010). Cognitive theory The term"Cognitive"comes from the word cognition means understanding, understand. Understanding the extent of cognition (cognition) is the acquisition, structuring, and use of knowledge. In subsequent developments, then this cognitive term became popular as one of the areas of human psychology / a
general concept that includes all forms of recognition which includes any mental behavior related to the problem of understanding, pay attention.
Characteristics of Cognitive Theory Learning theory kognitiv importance of the process of learning rather than the result of learning itself.
Learning does not just involve the relationship between stimulus and response, more than that learning involves thinking very complex.
Learning is a change in perception and understanding. Changes in
perception and understanding is not always a change in behavior could be observed. Stakeholders theory Stakeholder theory says that the company is not an entity that only operates for its own account, namely against the owners (shareholders), but should benefit the stakeholders (shareholders, creditors, customers, suppliers, government, the public, analysts and other parties). It is based on the argument Friedman (1983) which says that the company's main goal is to maximize the benefit of their owners. Culture and Organization Hofstede lowering the cultural concept of mental program that differentiated in three levels (Hofstede 1980: 15), namely: 1) the universal level, ie the mental
program shared by all humans. At this level the mental program entirely inherent in human beings, 2) the level of collective, ie mental programs that are owned by a few, not all humans. At this level of specialized mental program on a group or category and can be studied. 3) the
individual level, the mental unique program which is owned by only one, two people will have exactly the same mental program. Dimensions of Culture As stated by Hofstede (1991) that the local culture is a mental
program that affects the way of thinking and behavior, collective mental program a group of people in a country called the national culture.
Individual Cultural Characteristics Auditor Audit involves professional ethics and independence (Tsui & Windsor, 2001; Patel & Psaros, 2000;
Cohen et al., 1995; Cohen, Pant & Sharp, 1993), the conflict auditor- client (Patel et al, 2002; Lin & Fraser, 2008), and the behavior of
decision- making on audit procedures (Sim & Goodwin, 2004;. Arnold et al, 1999; Yamamura et al, 1996). Professionalism Accountant The sense of professionalism by Tjokrowinoto, Tangkilisan and Nteseo (2013) is the ability to plan, coordinate, and carry out its functions in an efficient, innovative, and have a high work ethic. Messier, et al. and sumantri (2011: 5) defines professionalism broadly, refers to the behavior, purpose, or qualities that characterize or characterize a profession or professional people throughout the profession set rules or codes of
conduct which define ethical behavior (professional) for members of the profession the. Dimensions of Professionalism Hall R and Yendrawati (2008: 2) developing the concept of professionalism of the individual level used for the professionalism of the external auditor includes five dimensions of dedication (dedication), social obligations (social
obligation), independence (autonomy demands), confidence in the regulatory profession (belief in self-regulation), and relationships with other professions (professional community affiliation). Investigative audit According to Bologna and Shaw, Single (2005a: 36) states that an investigative audit as follows: "Forensic accounting, sometimes called fraud auditing or investigative accounting, is a skill that goes beyond the realm of corporate and management fraud, embezzlement or bribery comercial. Indeed, forensic accounting skills go beyond the general realm of collar crime. "Tuanakota (2007: 207) argues that the
investigative audit investigation and examination fraud is used in turns as synonyms. Ideally there is a similarity of meaning concepts of
auditing and legal, but in terms of auditing philosophy and philosophy of law it is not possible. Audit Investigatif Quality Definition of audit quality by De Angelo (in Perdany and Suranta, 2013) As the probability that the auditor will find and report violations to the client's accounting system.
The probability of finding a violation depends on the technical ability of the auditor and the probability of reporting a violation depending on auditor independence. Knetchel, et al. (In Somantri, 2013) defines the quality of the audit investigation as follows: The combination of the systematic examination of the good, in accordance with generally accepted standards by the auditors judgments (skepticism and
professional judgment) of high quality, which is used by auditors are competent and independent in applying the inspection process to
produce high-quality audits. While Moizer and Irawati (2011) states that the measurement of the quality of the audit process centered on the performance of auditors and compliance standards that have been outlined. Empirical Theoretical Model This led the company to focus on quality and self efficacy arising from auditors and stakeholders.
Stakeholder theory and the theory of efficacy can be explained that the use of cultural auditor and reduce the dysfunctional behavior of the auditor is the auditor's decision to increase the quality of audits, which serve as the basic theory (Grand Theory). Based on the theoretical study and previous empirical studies, the following is a presentation image on the basis of theoretical models to explain how culture auditor and auditor dysfunctional behaviors affect the quality of audit mediated by self-efficacy, the following; Figure 2: Context of Individual Cultural Relations Investigative Auditor with the Audit Quality Development Hypothesis Cultural relations individual auditors with audit quality
investigative Behaviors that directly affect the quality of audit
investigative include the completion of the audit process at an early stage without improvement of audit procedures (Otley and Pierce, 1995; Rhode, 1978; Alderman and Deitrick, 1978; Donnelly et al, 2003.: 88), the collection of audit evidence is not adequate (Alderman and Deitrick, 1982; Donnelly et al, 2003 :. 88), inaccuracies in the audit process (McDaniel, 1990; Donnelly et al, 2003: 88) and the elimination of certain audit measures (Margheim and Pany, 1986; Donnelly et al, 2003: 88) and Siti Kustinah (2013). This hypothesis is based on the idea mentioned above, as follows: H1: There is a cultural influences individual investigative auditor to audit quality. Cultural Relations Self Efficacy individual auditors with Professional Accountants. Brent R.
MacNaba and Reginald Worthley (2012) found the basic model and predictors of individual cultural management for empirical research in education intelligence of the cultural development of the individual.
Cognitive theories on the development of cultural intelligence of individuals for consideration cultural attributes of individual auditors.
This research effort to test a group of multi-culture of more than 246 managers, test theoretical between individual characteristics of auditors (ie self-efficacy auditor, experience of international audit, management and work experience of auditors) with (aspects of meta- cognitive, motivational and behavioral) development of intelligence culture of individual auditors. Based on the theoretical study and previous
empirical findings by Brent R. MacNaba and Reginald Worthley (2012) and Bandura (1977) developed for this study so that the statement of the literature review and previous studies above hypothesis stated in 3 and is presented in Figure 2.2 below; H2: There is a cultural influence on the self-efficacy of individual auditors professionalism accountant.
Relationship between Self Efficacy Professionals Akuntan with Quality Audit. Patti Cybinski and Carolyn Windsor (2005) found discover the relationship between self-efficacy and engagement of the independent auditor's work may offer different insights on the domain of the internal auditor and the positive effect on audit quality. Kuang-Hsun Shih (2009) results showed that there was a significant and positive relationship between self-efficacy auditors and internal auditors work involvement.
The strength of organizational controls showed no intervention effects on self-efficacy auditor or job involvement. Based on the study of
theoretical and empirical findings earlier by Cybinski (2000, 2003), Patti Cybinski and Carolyn Windsor (2005) and Kuang-Hsun Shih (2009) developed for this study so that the statement of the literature review and previous studies above stated in hypothesis 3 and is presented in Figure 2.2 below; H3: There is a positive effect of Self Efficacy
professionalism investigative accountant to audit quality. Cultural relations Individual auditors of the quality of Investigative Audit Self efficacy is mediated by the Professional Accountants. Based on the
theoretical study and the findings of previous empirical by Mochtar Lubis
"written by Amarilldo and quoted Wahyu Ancol, Siti Kustinah (2013) and Jamal (2014) was developed for dissertation (2015) so that the
statements of some of the literature review and previous studies above stated in hypothesis 6. This hypothesis is based on the idea mentioned above, as follows: H4: There are cultural influences Individual Auditor to audit quality investigative Self Efficacy mediated by professional
accountants III. Research methods The population in this study are all auditor BPK investigative work in Jakarta. Population auditor BPK
investigative work in investigative auditor amounted to 288, not the auditor Investigative (198) auditor, auditor Investigative number 90 auditors and responses to questionnaires were incomplete (21) auditor,
then the amount of sample 69 auditors. The sampling method in this study using snowball sampling method is the method of sampling using one auditor expert in distributing questionnaires to each - each auditor investigative so selected samples relevant to the purpose of research.
Calculation of the sample in accordance with predetermined criteria, are presented in the following table: To measure the culture of individuals who proxied by the local culture by Shirev & David (2012) is set
Attitudes, Behavior, and Symbols. andangan normative local culture is a form habits that are common/ normative agreed together in a
particular group. In Structural A kinship system/patterns of interaction among individuals by Kroeber and Kluckhohn (1952). Variable
professionalism will be linked with the dedication, social obligations, self-reliance, confidence and relationships among professions
profession. Summary operational definition of each variable can be seen in Table 1. Table 1 Operationalization of Variables Self Efficacy Variable mediating Auditor Professionalism Investigative audit quality as the dependent variable will be connected with the accuracy of the audit findings, the value of recommendation, an attitude of skepticism, clarity of financial statements, the benefits of audit and audit follow- up
results. Table 2 Operasionalization of Variable Data collection techniques in the first year with the auditor's observations on the BPK investigative questionnaire related to the BPK auditor. Therefore, researchers
presented an investigative auditor with two opposing statements and should state more closely how an investigative auditor as an informant match with statements on a Likert scale of 1-5 questionnaires. The
purpose of this study was to examine the mediating effect of the role of self-efficacy on the relationship between the individual culture auditor to audit the quality of the investigation. Testing is done with a program WarpPLS 4.0. This study using analysis tools Structural Equation
Modeling SEM-PLS with WarpPLS Program 4.0. Variance or component is based Structural Equation Modeling (WarpPLS) was used to test the hypothesis. Analysis tools have been because there are several
advantages that are designed to be able to resolve issues such as the small sample size, the data were not normally distributed as
multivariate, the missing value, and the problem of inter-variable multicoloniarity oxygen (Ghozali and southern, 2014). The Conversion flowcharts into the equation. The model of this study, the following.
Based on the above hypothesis development, it can be applied to our model, the following: Q = β1X + β2X* β3M + ε Z = β1X + ε Notation : Y = Investigative audit quality Z = Self Efficacy professionalism
Accountant X = Cultural individual auditor β1,2, = Coefficien ε = error IV. Results and Discussion Validity Testing with WarpPLS 4.0 testing the validity of construct and valid indicators mostly> 0.05 except self
efficacy -0219 indicator because as intervening variables but the main effect of cultural variables of individual auditors and audit quality
investigative amount each correlation value> 0.05 is valid can be seen in table 3 below: Table 3: Correlations among vs. with sq. rts. of AVEs BIA (X) SE (Z) KAI (Y) BIA (X) 1.000 -0.219 0.141 SE (Z) -0.219 1.000 0.372 KAI (Y) 0.141 0.372 1.000 Testing Reliability with WarpPLS 4.0 In the reliability test in which a construct or variable has a value of
Cronbach's alpha 1.000> 0.60 (Nunnaly) which means that all contracts or variable that each indicator is reliable, a construct that can be done to further testing by the relationship between variables, namely the role of self-efficacy on individual culture auditor to audit the quality of
investigation which can be seen in table 4 below; Table 4: Latent
Variabel Coeffisien dan Uji R eliabilitas BIA (X) SE (Z) KIA (Y) R-squared 0.167 0.288 Adj.R-squared 0.154 0.267 Composite reliab. 1.000 1.000
1.000 Cronbach’s alpha 1.000 1.000 1.000 Avg.var.extrac. 1.000 1.000 1.000 Full collin. VIF 1.118 1.272 1.235 Q-squared 0.152 0.290 Full Testing Model The test results of research denganWarpPLS 4.0 full model presented by figure 3 table 5.3. Based on the output of the
model fit and quality indices models have value APC = 0373, P <0.001, ARS = 0.228, P = 0.003, Aars = 0211, P = 0.004, AVIF = 1,020,
(acceptable if <= 5, ideally <= 3.3, AFVIF = 1.208, acceptable if <= 5, ideally <= 3.3, GoF = 0.477, small> = 0.1, medium > = 12:25, large >
= 0.3). Provisions for WarpPLS stated that the p-value for the APC and ARS should be less than 0.05 (significant). AVIF and AFVIF value as an indicator multikolonearitas must be smaller than 5, and the provisions for GoF value is small> = 0.1, medium> = 12:25, large> = 0:36.
Referring to these provisions, it can be concluded that this research model is fit. Figure 3 and Table 4.3 show the path coefficients and p- value of any direct relationship (direct effect), the relationship is not direct (indirect effect), the total effect and the effect size in our model.
KAI BIA Strip shows 0:38 and significant coefficient with a value of p
<0.01, respectively. Hiking BIA SE shows the coefficient of -0.41 and significant with p <0.01, respectively. KAI SE Strip shows 0:33 and significant coefficient with a value of p <0.01, respectively. Figure 3 Testing Full Model Table 5 Model Fit and Quality Indices, Path Coefisiens dan p- Values, Indirect, Total Effects, Effect Size- Full Model Model Fit and Quality Indices APC =0.373, P<0.001 ARS=0.228, P=0.003 AARS=
0.211, P=0.004 AVIF=1.020, acceptable if <= 5, ideally <= 3.3
AFVIF=1.208, acceptable if <= 5, ideally <= 3.3 GoF=0.477, small >=
0.1, medium >= 0.25, large >= 0.36 Jalur Coefficient P-Value SE BIA -0.408 <0.001 KAI BIA 0.379 <0.001 KAI SE 0 .331 <0.001 Indirect Effect KAI BIA -0.135 0.016 Total Effect SE BIA 0.408 < 0.001 KAI BIA 0.244 0.003 KAI SE 0 .331 < 0.001 Effect Size Coefficient BIA BIA SE SE KAI KAI 0.167 0.104 0.127 Notation : APC = Average path
coefficient AARS = Average adjusted R-squared AFVIF = Average full collinearity VIF BIA : Cultural Individual Auuditor KAI: Investigative audit quality ARS = Average R- squared AVIF = Average block VIF GoF
= Tenenhaus GoF SE : Self Efficacy Table 5 presents the R-Squared, Q- Squared and Full collinearity VIF. R2 can be used to explain the
influence of exogenous variables on endogenous latent variable does have a substantive effect. Q2 is used to determine whether the model has predictive relevance while the value of Q2 <0 indicates predictive models have less relevant. While Full collinearity Vif is full of colinearity test results which include vertical multikolinearitas and literal. Criteria for full collinearity test is its value should be lower than 3.3 (Kock, 2013). The test results demonstrate the value of R2 each endogenous variable was 29% (KAI) and 17% (SE). This research has predictive models relevant for Q2 above has a value of 0 (nul). Based Full collinearity VIF value under 3.3 indicate in our model there can multicolinearity described in Table below: Tabel 6. R-Squared, Q- Squared dan Full Collinearity VIF R-Squared KAI 0.29 SE 0.17 Q- Squared KAI 0.290 SE 0.152 Full collinearity VIF KAI 1.235 SE 1.272 Notation : SE : Self Efficacy KAI: Investigative Audit Quality Testing Model Mediation. Testing the mediation model that will do is self-efficacy mediates the relationship between individual cultures investigative
auditor to audit quality. Assessment of the effect of mediation conducted by WarpPLS program may provide indirect effect and significance
coefficient directly. Although WarpPLS program may provide indirect effect coefficient and its significance in directly but their testing
procedures mediating influence of this study follow the stages of Baron and Kenny (1986), namely: 1. Effect of exogenous variables directly to
the mediating variables to be significant. 2. Effect of exogenous
variables directly against endogenous variables to be significant when pemediasi variables have not been incorporated into the model. 3. Test the simultaneous influence of exogenous variables and variables
mediating Endogenous variables. After pemediasi variables included in the model then indirectly influence should be significant. 4. Additional tests to see the effect of mediation by Ghozali and southern (2014) and Sholihin and Ratmono (2014) approach is to use Hair et.al (2013) that calculates the value of VAF. If VAF above 80% indicates full mediation (full mediation). If VAF worth 20% -80%, can be categorized as
pemediasi partial. VAF value if less than 20%, it can be concluded that almost no mediating effect (Hair et al., 2013). The test results of self- efficacy as a mediating variable between individual cultural relationship with audit quality investigative auditor with WarpPLS 4.0 figure 5.1 and table 5.3. Based on the output of the model Fit and Quality Indices APC
= 0373, P <0.001, ARS = 0.228, P = 0.003, Aars = 0211, P = 0.004 AVIF = 1,020, (acceptable if <= 5, ideally <= 3.3) AFVIF = 1.208, (acceptable if <= 5, ideally <=3.3) GoF = 0.477, (small> = 0.1,
medium> = 12:25, large> = 0.36). Based on the output of the model fit and quality indices can be concluded that this research model fit.
Figure 3 and Table 5 show the path coefficients and p-value of any direct relationship (direct effect), the relationship is not direct (indirect effect), the total effect and the effect size in our model. KAI BIA Strip shows 0:38 and significant coefficient with a value of p <0.01,
respectively. Hiking BIA SE shows the coefficient of -0.41 and significant with p <0.01, respectively. KAI SE Strip shows 0:33 and significant
coefficient with a value of p <0.01, respectively. It shows the
relationship is not direct / indirect effect between BAI and KAI shows coefficient values -0135 and significant with p = 0.016. It shows no direct relationship between BAI and KAI. According to Table 5.3 in mind the magnitude of the effect size value of each relationship. Effect size indicates absolute individual contribution of each predictor variable on the value of R2 latent criterion variable. The results showed the effect size estimates for 0167 SE BIA, BIA KAI , KAI SE for 0104 and for 0127.
The R2 each endogenous variable was 29% (KAI) and 17% (SE). This research has predictive models relevant for Q2 above has a value of 0 (nul). Based Full collinearity VIF value under 3.3 indicate in our model there is no multicolinearity. Interpretation of The Results Strengthening the culture of individuals auditor positive and significant impact on the quality of the investigative audit. That is the culture of individuals auditor diverse applied in the CPC to further improve the quality of an audit investigation, because the culture of the individual auditor based on local wisdom of each region as mediating the relationship between self eficacy with the quality of the audit and the adhesive potential soul inclusive (independence, competence, and applying knowledge of the process investigative audit) government auditor excel in Indonesia. The results of this study are consistent with the characteristics of Cognitive Theory of cognitive learning theory is more concerned with the learning process rather than the result of learning itself. Learning does not just involve the relationship between stimulus and response, more than that learning involves thinking very complex. Learning is a change in
perception and understanding. Changes in perception and
understanding is not always a change in behavior could be observed.
Cultural change individual auditor is a learning process that changes the perception and understanding of the ethical audit process that impact on improving the quality of investigative audit. This study supports a previous research that the culture of individual auditors reflected in the
behavior BPK auditors during the audit process berpengaruhi to quality investigative audit includes the completion of the audit process at an early stage without improvement of audit procedures (Otley and Pierce, 1995; Rhode, 1978; Alderman and Deitrick , 1978; Donnelly et al,
2003.: 88) proved that the culture of the individual auditor positive and significant impact on the quality of investigative audits, as acculturation individual auditors based on local wisdom of each region as mediating the relationship between self eficacy with the quality of the audit and the adhesive potential soul inclusive (independence, competence, and practice investigative audit process knowledge) as a catalyst revitalizing the role of government accountants: stakeholder collaboration to the government auditor excel in Indonesia. Cultural individual auditor negative effect on self-efficacy. This means that the individual auditor acculturation diverse applied in CPC further lower self- efficacy. The results of this study are not consistent with the theory of self-efficacy is a person to believe he could achieve using her skills in specific
circumstances (Snyder & Lopez, 2007). Self-efficacy has been regarded as a version of self- esteem (Lunenburg, 2011). The theory of self- efficacy and motivation is that the performance auditors partly
determined by how effectively people believe (Bandura, 1982; as cited in Redmond, 2010). The collection of audit evidence is inadequate
(Alderman and Deitrick, 1982; Donnelly et al, 2003 :. 88), inaccuracies in the audit process (McDaniel, 1990; Donnelly et al, 2003: 88) and the elimination of certain audit measures (Margheim and Pany , 1986;
Donnelly et al, 2003: 88) and Siti Kustinah (2013). Proves that the culture of individual auditors negatively affect the quality of
investigative audit. Self-efficacy positive and significant impact on the quality of the investigative audit, meaning that self-efficacy is an
individual performance and motivation auditor high determined by the effectiveness of the trust auditee, including the state, enterprises, the State Ministry and the departments concerned which concerned will improve the quality of audit investigative. The results of this study are consistent with the theory of self-efficacy is a person to believe he could achieve using her skills in specific circumstances (Snyder & Lopez,
2007). Self- efficacy has been regarded as self-actualization Lunenburg, 2011). Proving that self-efficacy positive and significant impact on the quality of the investigative audit, for the actualization of the potential of science and knowledge in the field of investigative audits can create audit process based on the suitability standard government audit good goverment governance (transparency, accountability, responsibility, independence and fairness) to produce quality investigative audit is expected by stakeholders. Self-efficacy mediates the relationship between individual cultures investigative auditor to audit quality. The study provides empirical evidence that cultural influence individual
auditors on audit quality investigative directly or indirectly through self- efficacy. The results of this study support previous research partially.
Self-efficacy in gathering audit evidence is inadequate (Alderman and Deitrick, 1982; Donnelly et al, 2003:. 88), inaccuracies in the audit process (McDaniel, 1990; Donnelly et al, 2003: 88) and the elimination of certain audit measures (Margheim and Pany, 1986; Donnelly et al, 2003: 88) and Siti Kustinah (2013). Cultural individual auditors are reflected in the behavior at the time of the audit process impact to
quality investigative audit includes the completion of the audit process at an early stage without improvement of audit procedures (Otley and Pierce, 1995; Rhode, 1978; Alderman and Deitrick, 1978; Donnelly et al, 2003.:88) proved that the role of self-efficacy mediates the
relationship between culture and the individual auditor positive effect on
the quality of investigative. V. Conclusions, Implications and Future
Research Results Cultural individual auditor positive effect on the quality of investigative audit. This means that the individual auditor diverse culture applied in the CPC to further improve the quality of investigative audit. The results of this study are consistent with the characteristics of Cognitive Theory of cognitive learning theory is more concerned with the learning process rather than the result of learning itself. Learning does not just involve the relationship between stimulus and response, more than that learning involves thinking very complex. Learning is a change in perception and understanding. Changes in perception and understanding is not always a change in behavior could be observed.
Cultural change individual auditor is a learning process that changes the perception and understanding of the ethical audit process that impact on improving the quality of investigative audit. Cultural individual auditor negative effect on self-efficacy. This means that the individual auditor diverse culture applied in the CPC further lower self- efficacy.
The results of this study are not consistent with the theory of self- efficacy is a person to believe he could achieve using her skills in
specific circumstances (Snyder & Lopez, 2007). Self-efficacy has been regarded as a version of self- esteem (Lunenburg, 2011). Self-efficacy positive effect on the quality of investigative audit. That is Self- Efficacy is that the performance and motivation high auditors determined by the effectiveness of the auditee confidence will improve the quality of
investigative audit. The results of this study prove that self-efficacy and significant positive effect on the quality of the investigative audit. Self- efficacy mediates the relationship between individual cultures
investigative auditor to audit quality. The study provides empirical evidence that cultural influence individual auditors on audit quality
investigative directly or indirectly through self-efficacy. Recommendation Implications of Research Results The implication of this research is
expected to contribute in the development of science as well as for practitioners: Theoretical implications Theoretically, this research is
expected to contribute to the science of accounting, especially regarding the quality of investigative audits, self-efficacy theory, social cognitive theory and the theory of stakeholders, through empirical explanation of the role of self-efficacy in affecting the relationship between the
individual culture investigative auditors and audit quality. Practical implications In practical terms this research can be used as reference for various parties regarding the individual culture of the auditor of the behavior of government investigative auditor at the Supreme Audit Agency, the Inspectorate, Directorate General of Taxes, government internal audit and independent auditors as well as academics in the field of accounting education. Future research It is expected to expand the research unit of analysis of the BPK auditor all representatives in Indonesia, the government's internal auditor and the independent
auditor in public accounting in Indonesia in order to be able digeneralisis of individual cultures over the behavior of auditors to improve audit quality investigative through self efficacy. We suggest for future research adding variables such as; Competence, Independence, experience in auditing, integrity, quality control audit, the client' s industry specialization, audit quality benchmarks and others that can improve investigative audit quality in government References (1) Bandura, A. (1997). Self-efficacy: The exercise of control . New York:
Freeman. (2) Bandura, A. (1999). Social cognitive theory of personality.
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Smith & M.A. Hitt (Eds.) Great Minds in Management. (p.1) Oxford:
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(1977). Cognitive processes mediating behavioral change. Journal of Personality and Social Psychology, 35 (3). Baotham, Sumintorn. (2007).
Effects of Professionalism on Audit Quality and Self-image of CPAs.
Thailand, International Journal of Bussiness Strategy. (5) Chan, K. H., Lin, K. Z., & Mo, P. L. L. (2003), an empirical study on the impact of culture on auditdetected accounting errorsǁ, Auditing: A Journal of Practice & Theory, 22(2), 281–295 (6) Davidson R. & Gist W. (1996), Empirical Evidence on the Functional Relation between Audit Planning and Total Audit Effort, Journal of Accounting Research, Vol.34, No.1 (7) De Angelo, L.E. (1981). Auditor Independence, Low Balling, and
Disclosure Regulation. Journal of Accounting and Economics 3, 1981. (8) Dimas Andika dan Syahril Djaddang (2015), Model Perilaku Auditor
Terhadap Kualitas Audit Investigatif (Studi Empiris Pada Auditor
Investigatif di BPKP- RI, Penelitian Internal, FEB-UP. (9) Ghozali Imam dan latan (2014), Partial Least Squares, Konsep Metode Dan Aplikasi, menggunakan Program WarpsPLS 4.0 Second Edition, Fakultas
Ekonomika dan Bisnis Iniversitas Diponegoro, Semarang (10) Heliza Syafifah Jufry dan Trado Vansa Adraga (2014), The Effect Of Locus Of Control, Organisational Commitment, And Position Toward Dysfunctional Audit Behaviour, The 2nd IBEA – International Conference on Business, Economics and Accounting Hong Kong, 26 – 28 March. (11) Hofstede, G. (2001), Culture‘s consequence: comparing values, behaviors,
institutions, and organizations across nations, 2nd edition, London:
Sage Publication (12) Institut Akuntan Publik Indonesia. (2011).
Standar Profesional Akuntan Publik. Salemba Empat, Jakarta. (13) Lin, Ling. (2012). Auditor Independence and Audit Quality : a Literature Review. University of Massachusetts Darmouth. (14) Lowenshon, S., Johnson E.L., dan Elder J.R. (2005). Auditor Specialization and
Perceived Audit Quality, Auditee Satisfaction, and Audit Fees in the Local Government Audit Market. (15) Lubis, Haslinda. (2009). Pengaruh
Keahlian, Independensi, Kecakapan Professional dan Kepatuhan pada Kode Etik Terhadap Kualitas Auditor pada Inspektorat Provinsi Sumatera Utara. Jurnal Ilmiah. Universitas Sumatera Utara, Sumatera. (16)
Mansouri, Ali., Reza Pirayesh, dan Mahdi Salehi. (2009). Audit Competence and Audit Quality: Case ini Emerging Economy.
International Journal of Business and Management. Vol. 4 No. 2. (17) Nteseo, Agustiany. (2013). Pengaruh Profesionalisme Terhadap Kualitas Audit (Studi Pada Auditor Di Provinsi Gorontalo). (18) Patel, C.,
Harrison, G. L., &McKinnon, J. L. (2002), ―Cultural influences on judgments of professional accountants in auditor–client conflict resolutionǁ, Journal of International Financial Management and Accounting, 13, 1–31 (19) Regis Emmanuel HELL and Danni WANG (2009), Cultural impact on the audit planning Phase An empirical study in China and France, Umeå School of Business, Master thesis, p.30. (20) Siti Kustinah (2013), The Influence Of Dysfunctional Behavior And
Individual Culture On Audit Quality, International Journal Of Scientific &
Technology Research Volume 2, Issue 5, May, Issn 2277-86 (21) Suranta, Sri., Annisa Perdany. (2013). Pengaruh Kompetensi dan
Independensi Auditor Terhadap Kualitas Audit Investigatif Pada Kantor Perwakilan BPK-RI Yogyakarta. Jurnal Ilmiah. Fakultas Ekonomi
Universitas Sebelas Maret. (22) Somantri, Dessy. (2011). Pengaruh Independensi Auditor dan Profesionalisme Auditor Terhadap Kualitas Audit (Survey pada Kantor Akuntan Publik di Wilayah Bandung). Artikel Ilmiah. Fakultas Ekonomi Universitas Komputer Indonesia. (23)
Yendrawati, Reni. (2008). Analisis Hubungan Antara Profesionalisme
Auditor dengan Pertimbangan Tingkat Materialitas dalam Proses Pengauditan Laporan Keuangan. Jurnal Fenomena : Vol. 6 No.1.
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SELF-EFFICACY MEDIATES THE RELATIONSHIP BETWEEN INDIVIDUALISM CULTURE AND AUDIT QUALITY: EVIDENCE FROM INDONESIA
Suratno Suratno, Pancasila University, Indonesia Syahril Djaddang, Pancasila University, Indonesia
Shinta Budi Astuti, Faculty of Economics and Business, Pancasila University, Indonesia dx.doi.org/10.18374/IJBR-17-1.9
ABSTRACT:
This study investigates the effects of individualism culture on audit quality. Specifically, it examines the mediating effects of self-efficacy on the relationship between individualism culture and audit quality.
Social cognitive theory is employed as a theoretical framework. Using the purposive sampling method, 69 auditors of the Indonesian Supreme Audit were selected as the sample. Structural Equation Modeling with WarpPLS Program 4.0 was used to test the hypotheses. The results of this study show that individualism culture has a significant impact on audit quality. This study also finds that self-efficacy acts as a mediator variable.
Keywords: self-efficacy, government auditor, social cognitive theory, audit quality, Indonesia
1. INTRODUCTION
DeAngelo (1981, p. 186) defines audit quality as ‘‘the market assessed joint probability that a given auditor will both discover a breach in a client’s accounting system, and report the breach”. A high-quality auditor will detect errors and enhance the reliability of the financial statements (D. Chan and Wong, 2002;
Gul et al, 2002; Chang et al, 2009). Carcello et al (2002) find that audit quality is directly linked to the amount of audit work. Many factors affect the quality of the audit, and these factors come not only from within the auditor but also from the outside. In this study, individualism culture and self-efficacy variables are expected to influence audit quality.
The importance of the cultural characteristics of individual auditors in the audit process has been widely documented. For example, studies by Agacer and Doupnik (1991), Bernardi et al (1997), Cohen et al (1996), Doupnik and Salter (1995), Lampe and Sutton (1994) suggest that cultural differences significantly affect the audit process. Self-efficacy is derived from social cognitive theory (Bandura, 1986).
It suggests that most of the knowledge and behaviour of members of an organization is derived from the environment, and thought processes in response to information received are continuous. It affects the motivation, attitudes, and behavior of individuals. Some research suggests that self-efficacy contributes significantly on an individual destination level, i.e., achievement of goals and performance (Lock and Latham, 1990).
Although prior studies have investigated the determinants of audit quality, few studies in the organizational behavior and auditing literature have tested the mediating effects of self-efficacy. The first objective of this study is to examine the effect of individualism culture on audit investigative quality. The second is to investigate whether self-efficacy mediates the relationship between individualism culture and audit investigative quality. This study was carried out because of the importance of audit quality in the decision-making process of stakeholders. By understanding the factors that affect the quality of an audit, auditors can increase their capabilities and thus minimise the occurrence of fraud.
M 2. LITERATURE REVIEW AND HYPOTHESES
“Social cognitive theory was used by Bandura in response to dissatisfaction with the principles of behaviorism and psychoanalysis. According to the theory, the role of cognition in motivation and the role of motivation are mostly ignored” (Bandura, 1977). The term "cognitive" comes from the word cognition,
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which means understanding or understand. The wider definition of cognition is the acquisition, structuring, and use of knowledge. In subsequent developments, this cognitive term, then, became popular as one of the areas of human psychology/a general concept that includes all forms of recognition, which includes any mental behavior related to the problem of understanding or paying attention.
Hofstede (1991) and Hofstede (2001) “identified five dimensions along which national cultures could be compared and contrasted: individualism versus collectivism, large versus small power distance, strong versus weak uncertainty avoidance, masculinity versus femininity, and short-term versus long-term orientation. One cultural dimension (individualism) is identified as a dimension that is closely related to factors affecting errors detected in auditing. Members of an individualist culture are expected to act according to their own interest, and they champion individual achievement. Management in an individualist organization is management of individuals, and the relationship between employer and employee is conceived as a business transaction based on mutual benefit. From a control perspective, this cultural dimension relates to the behavioral aspects of the internal control system and the inherent risks.” There is a growing recognition of the importance of personnel policies and practices in implementing effective controls to prevent and detect errors or irregularities in financial statements (Glover and Aono, 1995). K. H. Chan et al (2003) argue that “based on cultural characteristics, individualist companies have more reliance on accounting numbers for individual performance evaluation”.
H1: Individualism culture is related to audit quality.
Social cognitive theory suggests that self-efficacy is a dynamic judgment that changes with organizational context, and it can be affected by individuals’ forethought of the trade-offs between effort and payoff (He and Freeman, 2010). Organizational culture is one type of environmental influence that impacts the way people (employees) think, perform tasks, and communicate/interact with each other. The culture of an organization provides a corporate framework, which provides guidance on issues like how work is done, the use of technology, how people think, and standards for interaction and communication. It then impacts and can be influenced by people’s behavior with respect to various things, such as how to solve problems, how to perform a job, and how to communicate. These, in turn, affect an individual’s job performance and satisfaction, impacting firm performance.
H2: Individualism culture is related to self-efficacy.
Self-efficacy refers to the belief in one’s capabilities to successfully perform a specific task (Bandura, 1986). Perceived self-efficacy is concerned with judgments of how well one can execute courses of action that are required to deal with prospective situations (Bandura, 1986, p. 122), and ‘beliefs in one’s capabilities to mobilize the motivation, cognitive resources, and courses of action needed to meet given situational demands’ (Wood et al, 2000). Self-efficacy is concerned with whether a person believes he can use his skills in specific circumstances (Stajkovic and Luthans, 1998; Snyder and Lopez, 2009). Self- efficacy has been regarded as a version of self-esteem (Lunenburg, 2011). The basic principle of self- efficacy is assessment, which is generally measured by three basic scales: scale, strength, and general.
(Bandura, 1997) contend that performance and motivation are partly determined by the degree to which people believe.
Cybinski and Windsor (2005) found that the relationship between self-efficacy and independent auditor's work may offer a different insight into the domain of the internal auditor and audit quality. (Shih et al, 2009) concluded that there was a significant and positive relationship between the self-efficacy of the auditor and the performance of internal auditors. “Previous studies demonstrate that high self-efficacy improves performance in a wide range of work settings, including education, training, sports and management” (Shea and Howell, 2000). “An individual's belief that he or she has the ability to execute certain tasks contributes to better performance. Individuals with high self-efficacy tend to perform well on a variety of tasks” (Bandura, 1997; Stajkovic and Luthans, 1998) “ In contrast, low self-efficacy individuals tend to avoid tasks and situations that they believe exceed their capabilities. Highly motivated auditors only demonstrate a better audit judgment performance when the audit tasks are simple.”
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Many studies have demonstrated that level of self-efficacy can predict work attitude, job training, work performance, job satisfaction, educational development, and knowledge sharing ((Randhawa, 2004;
Cabrera et al, 2006). “Therefore, self-efficacy is widely perceived as one critical factor in determining how much effort and resources a person invests when confronting challenges. Auditors with higher self- efficacy are more likely to continue investing in goal achievement behavior. Therefore, self-efficacy infuences behavior by affecting the motivation and confidence to overcome difficulties and improve performance “(Shue-Ching Lee, Jau-Ming Su, Sang-Bing TsaiEmail author, Tzu-Li Lu and Weiwei Dong).
H4: Self-efficacy mediates the relationship between individualism culture and audit quality
3. RESEARCH METHODS
The purposive sampling method is used to select the sample. The sample in this study consists of 69 investigative auditors from Indonesian Supreme Audit. The sample selection is presented in Table 1. In 2015, the total number of auditors at Indonesian Audit Supreme was 288. Of the respondents, 198 are not investigative auditors. Of the 90 invesitgative auditors who sent the questionnaire, 21 were not responsive. Thus, the final sample was 69.
Table 1 – Sample Selection
Description N
Total auditors 288
Auditor who doesn’t include as investigative
auditor (198)
Available sample 90
Respondents didn’t respon the questionnaire (21)
Final sample 69
In this study, the variable of individualism culture is proxied as local culture. The dimensions consist of attitudes, behavior, and symbols. The normative approach views local culture as habits that are common or normatively agreed upon by a particular group. The second independent variable is self-efficacy, which is measured by five dimensions: loyalty to profession, social obligations, independence, confidence, relationship. The instrument was adapted from (Bandura, 1977). The dependent variable of this study is audit quality. It is measured by six indicators: accuracy, skepticism, recommendation, audit benefits, and audit follow-up. Using a 1-5 Likert scale, the respondents are asked to answer the questions. Data analysis was based on variance or the component approach of Structural Equation Modeling SEM-PLS with WarpPLS Program 4.0. The model of this study is as follows:
Y = β1X+ β2X* β3M + ε Z = β1X+ ε
Notation :
Y = audit quality
Z = self-efficacy X = individualism culture
β1, 2, = coefficient
ε = error
4. RESULTS
Table 2 presents the result of the correlation test. Based on the table, it can be seen that individualism culture is negatively correlated with self-efficacy and positively related with audit quality. This result also shows that self-efficacy is positively correlated with audit quality.
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Table – 2 Correlation of variables
Table 3 exhibits the result of reliability testing of variables. The result shows that all variables have a Cronbach’s alpha score higher than 0.60. It suggests that all variables can be reliably analysed.
Table 3 – Coefficient and reliability test of latent variable Indicator Individualism culture
(X) Self-efficacy
(Z) Audit quality (Y)
R-squared 0.167 0.288
Adj.R-squared 0.154 0.267
Composite reliable. 1.000 1.000 1.000
Cronbach’s alpha 1.000 1.000 1.000
Avg.var.extrac. 1.000 1.000 1.000
Full collin. VIF 1.118 1.272 1.235
Q-squared 0.152 0.290
Table 4 presents the result of WarpPLS for full model testing. Based on the table, it can be shown that all indicators fullfilled the criteria of a fit model. The score for Average Path Coefficient is 0.373 with p-value less than 0.001. The Average R-Squared is 0.228, and the p-value is 0.003.
Table 4 also shows the regression results. The path coefficient of individualism culture audit quality is 0.379, and the p-value is less than 0.001. It can be concluded that individualism positively affects audit quality. Thus, H1 is accepted.
The second hypothesis (H2) stated that individualism culture is related to self-efficacy. The regression result shows that the coefficient of individualism culture self-efficacy is -0.408 with a p-value less than 0.001. Therefore, the H2 is also accepted. The positive relationship between self-efficacy and audit quality is also supported. The path coefficient self-efficacy audit quality is 0.331 (p-value =
<0.001).
Finally, the mediation effect of self-efficacy in the relationship between individualism culture and audit quality is shown by the fact that the path coefficient of the indirect effect is positively significant. Thus, H4 is accepted.
Variables Individualism
culture Self-efficacy Audit quality Individualism
culture 1.000 -0.219 0.141
Self-efficacy -0.219 1.000 0.372
Audit quality 0.141 0.372 1.000
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Table 4 – Model Fit and Quality Indices, Path Coefficients and p- Values, Indirect, Total Effects, Effect Size - Full Model
Model Fit and Quality Indices
Average Path Coefficient: 0.373, p < 0.001 Average R-Squared: 0.228, p = 0.003 Average Adjusted R-Squared: 0.211, p = 0.004
Average Block VIF: 1.020, acceptable if <= 5, ideally <= 3.3
Average Full VIF: 1.208, acceptable if <= 5, ideally <= 3.3
Tenenhaus GoF: 0.477, small >= 0.1, medium >= 0.25, large >= 0.36
Path Coefficient P-Value
Self-efficacy Individualism
culture -0.408 <0.001
Audit quality Individualism culture
0.379 <0.001
Audit quality Self-efficacy 0.331 <0.001 Indirect Effect
Audit quality Individualism culture
-0.135 0.016
Total Effect
Self-efficacy Individualism
culture 0.408 < 0.001
Audit quality Individualism culture
0.244 0.003
Audit quality Self-efficacy 0.331 < 0.001
Effect Size Coefficient
Audit quality Self-efficacy 0.167
0.104 0.127 Individualism culture Audit
quality
Self-efficacy Audit quality
Table 5 – R-Squared, Q-Squared and Full Colinearity VIF R-Squared
Audit quality 0.29
Self-efficacy 0.17
Q-Squared
Audit quality 0.290
Self-efficacy 0.152
Full Colinearity VIF
Audit quality 1.235
Self-efficacy 1.272
The strengthening of individualism culture positively affects audit quality. This suggests that the culture of the individual auditor improved audit quality; the culture of the individual auditor is based on local wisdom.
The result of this study is consistent with the characteristics of cognitive theory. Cognitive learning theory is more concerned with the learning process rather than the result of learning itself. Learning does not just involve the relationship between stimulus and response; learning involves a complex thinking process.
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Learning is a change in perception and understanding. Changes in perception and understanding are not always a change in behavior that can be observed.
A change in individualism auditor culture is a learning process that changes the perception and understanding of the ethical audit process, improving the quality of the investigative audit. This study supports a previous study suggesting that the culture of individual auditors is reflected in the audit process of Indonesian Audit Supreme. It influences the quality of the audit (e.g. completion of the audit process at an early stage without improvement of audit procedures).
The culture of individualism auditor negatively affects self-efficacy. Therefore, the diverse acculturation of the individual auditor applied further lowers self-efficacy. The results of this study are not consistent with social cognitive theory. According to the theory, a person believes he/she is able to use his/her skills in specific circumstances (Snyder and Lopez, 2009). Self-efficacy has been regarded as a version of self- esteem (Lunenburg, 2011).
Self-efficacy positively and significantly impacts audit quality, meaning that self-efficacy is an individual performance that is determined by the effectiveness of the trust audited, including the state. Self-efficacy has been regarded as self-actualization (Lunenburg, 2011). Proving that self-efficacy positively and significantly impacts the quality of the audit is necessary for the the potential of science and knowledge in the field of investigative audits; an audit process can be created based on the suitability standard of good governance (transparency, accountability, responsibility, independence and fairness), producing a quality audit that stakeholders expect.
The study also provides empirical evidence that the individual culture of auditors directly influences audit quality, and self-efficacy indirectly influences it. The results of this study partially support previous research; it is possible that the self-efficacy in gathering audit evidence was inadequate, there was inaccuracies in the audit process, or certain audit measures were eliminated. The culture of individual auditors reflected in the behavior at the time of the audit process influences the quality of the investigative audit and includes the completion of the audit process at an early stage without improvement to audit procedures.
5. CONCLUSIONS
The individualism culture of the auditor positively affects the quality of audit. The results are consistent with the characteristics of social cognitive theory. Cognitive learning theory is concerned with the learning process rather than the results of learning. The individualism culture of the auditor negatively affects self- efficacy. The result is not consistent with social cognitive theory. Self-efficacy positively affects the quality of the audit. That is, self-efficacy is the performance and motivation of auditors and is determined by the confidence of the auditor, which will improve the quality of the audit. Self-efficacy mediates the relationship between individualism culture and audit quality. This study provides empirical evidence that culture influences audit quality directly or indirectly through self-efficacy.
Theoretically, this study contributes to the organizational behavior and accounting literature. Practically, the results of this study can be used as a reference for various parties regarding the individual culture of the auditor. Specifically, this study is for the Supreme Audit Agency, the Inspectorate, Directorate General of Taxes, government internal auditors and independent auditors and academics in the field of accounting education. Future study may consider other variables which are expected to affect audit quality, such as competence, independence, experience in auditing, integrity, quality control, client industry specialization, and audit quality benchmarks.
REFERENCES:
Agacer, G. M. and Doupnik, T. S. (1991) Perceptions of auditor independence: A cross-cultural study.
The International Journal of Accounting, 26220-237.
