Title: The effectiveness of local government financial statement audit by public accounting firm

Authors: Rifatul Fauzia; Dyah Setyaningrum; Dwi Martani

Addresses: The Audit Board of the Republic of Indonesia, Jl. Jenderal Gatot Subroto No. 31, Jakarta Pusat, 10210, Indonesia ' Faculty of Economics and Business, Universitas Indonesia, Widjojo Nitisastro Campus, Prof. Dr. Sumitro Djojohadikusumo, UI Depok, 16424, Indonesia ' Faculty of Economics and Business, Universitas Indonesia, Widjojo Nitisastro Campus, Prof. Dr. Sumitro Djojohadikusumo, UI Depok, 16424, Indonesia

Abstract: This study analyses the audit quality of a public accounting firm (PAF) and the Audit Board of the Republic of Indonesia (SAI). Data were obtained from two groups of samples consisting of government institutions audited by PAF and SAI in 2014 and 2015, with the regression test used to determine the hypothesis. The results show that the audit performed by the SAI has a better quality compared to audits conducted by the PAF. The SAI obtain more findings in terms of the number of the internal control system weaknesses and the non-compliance findings. Furthermore, the results also show no significant differences in the audit time required by PAF and SAI. This result aids the SAI to evaluate the use of PAF's in implementing actions to minimise the weaknesses of the audit program by PAF's.

Keywords: audit quality; findings; time; public accounting firm; SAI; Supreme Audit Institutions.

DOI: 10.1504/IJTGM.2022.120902

International Journal of Trade and Global Markets, 2022 Vol.15 No.1, pp.79 - 87

Received: 28 Jan 2020
Accepted: 01 Jul 2020
Published online: 16 Feb 2022 *

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