Auditor Case Study

Abstract

The purpose of this article is to discuss and determine what are the function and effect of competence and independence of auditor on the audit quality. In the other word, there should be the relationship and interaction among competence and independence of auditor as well as the audit quality. First of all, it is known that competence of auditor is referring to the individual characteristics and abilities which contribute the effects on the success and the actions to be taken for any circumstances with application of the knowledge and knowhow as well as skills of individual in order to achieve the strategic goals or objectives, and obtain an outstanding competitiveness. The five indicators for strengthening of competence of internal

Referring to Mills (1993:84), it also figured out the similar argument that competence of auditor can be observed from two factors: knowledge and behavior in which knowledge itself is related to education, skills and experience. The result of education, training and experience will lead to knowledge and skills. Somethings in the system, sub-systems and application may be reduced, such as inaccurate records, improper accounting methods, poor business interruption and decision making, violation of laws or regulations, increases on costs, loss of capitals and competitive positions of markets, due to the entering of competence of human resources (Sawyer et al, 2006: 113). The function of internal audit should be independent in which the internal auditors have to aim on the objective in proceeding their works and tasks. The independence of the firms refers to the situation of the internal audit function while the auditor’s objectivity refers to the individual’s mental attitude. The internal audit function was measured by the four-dimension, namely the scope of the task of the internal audit function, the characteristic function of internal audit, internal audit functions audit implementation, and management of the internal audit

According to De Angelo (1981), it was said that the audit quality is the probability of combination of competent auditors who are going to find the violations in term of client's accounting system and to prepare the report with such violated findings independently without any interference or pressure. The quality of audit can be measured by two formative indicators which are (1) reputation of auditor that is the public perceptions about the past performance of auditor in term of audit quality and the standards of professional conduct that are consistent in auditing process, and (2) industry specialist auditor who is often assigned to specific industries becoming very skillful to identify and figure out the problems of specific industry audit so as to give out the result in a high quality audit. According to Moeller, (1999: 553), it was claimed that the quality of the internal audit is an internal investigation to be carried out regularly and systematically in the same way as the members of the internal audit staff to assess the quality of the performed audit work have conducted the internal audit to others. Based on Hiro Tugiman (1997: 11), it was argued that the internal audit or internal