the influence of locus of control on audit …

THE INFLUENCE OF LOCUS OF CONTROL ON AUDIT JUDGMENT

THROUGH TIME DEADLINE PRESSURE AND TIME BUDGET

PRESSURE

SKRIPSI

By

Windy

008201400111

Presented to

Faculty of Business President University

In partial fulfillment of the requirement

For

Bachelor Degree in Business Major in Accounting

President University

Cikarang Barat - Bekasi

Indonesia

2018

iii

CONSENT FOR INTELLECTUAL PROPERTY RIGHT

Title of Skripsi: The Influence Of Locus Of Control On Audit Judgment

Through Time Deadline Pressure and Time Budget

Pressure

1. The Author hereby assigns to President University the copyright to the

Contribution named above whereby the University shall have the

exclusive right to publish the Contribution and translations of it wholly or

in part throughout the world during the full term of copyright including

renewals and extensions and all subsidiary rights.

2. The Author retains the right to re-publish the preprint version of the

Contribution without charge and subject only to notifying the University

of the intent to do so and to ensuring that the publication by the University

is properly credited and that the relevant copyright notice is repeated

verbatim.

3. The Author retains moral and all proprietary rights other than copyright,

such as patent and trademark rights to any process or procedure described

in the Contribution.

4. The Author guarantees that the Contribution is original, has not been

published previously, is not under consideration for publication elsewhere

and that any necessary permission to quote or reproduce illustrations from

another source has been obtained (a copy of any such permission should

be sent with this form).

5. The Author guarantees that the Contribution contains no violation of any

existing copyright or other third-party right or material of an obscene,

vi

PLAGIARISM

vii

ACKNOWLEDGEMENT

First and most of all, the researcher would like to thank and praise to Lord

Jesus Christ for His blessing, love, help, guidance, and make the researcher able

to fulfill the dream to finish the education in President University.

The researcher would be facing many difficulties in finishing this research

without a help from many special people around. Therefore, the researcher want

to give special thanks to the people that deserve a special mention that always

support me from the beginning until the end of this skripsi.

1. Deepest gratitude goes to my family, especially my parents, brother, and

sister. Thank you so much for the support that has been given to me both

moral and material. Without family’s support, the researcher wouldn’t be

able to go through many difficult times.

2. To Mr. Asep Supriatna as Skripsi Advisor. The researcher would like to

thank you for giving many useful advises and making the researcher able

to finish the skripsi.

3. To Dean Faculty of Business, Head of Accounting Study Program,

Accounting study program lecturer and staff. Thank you for your help in

organizing the accounting study program.

4. To Maria Cristal Miranda and Lia Cintya. Thank you for teaching me how

to use SEM analysis and always there when I need your help.

5. To my office-mate from internship period, Mr. Suhardin Husna, Mrs.

Juniaty Gunawan, Mrs. Ade Ernawati, Mr. Muhammad Trianto, Mr. Ali

Azulfiqar. Thank you so much for all the laughters and support to finish

my thesis.

6. To my best friends in accounting at President University. Maria Cristal

Miranda, Lia Cintya, Febrina Yahya. Thank you for the precious

friendship in our university life.

viii

7. To all-accounting students batch 2014. Thank you for your friendship and

I am glad to know you as well as meet you guys.

Last, but not the least to all parties that the researcher could no mention one by

one who help the researcher during the skripsi writing process.

Sincerely,

Windy

ix

Table of Contain

COVER PAGE ........................................................................................................ i

PANEL OF EXAMINERS APPROVAL SHEET ................................................ ii

CONSENT FOR INTELECTUAL PROPERTY RIGHT .................................. iv

DECLARATION OF ORIGINALITY ................................................................. v

PLAGIARISM CHECK ......................................................................................... vi

ACKNOWLEDGEMENT ..................................................................................... viii

TABLE OF CONTENT .......................................................................................... xi

ABSTRACT ............................................................................................................. 1

INTISARI ................................................................................................................ 2

CHAPTER I- Introduction..................................................................................... 3

1.1Research Background............................................................................... 4

1.2 Research Questions ................................................................................. 5

1.3 Research Objectives ................................................................................ 6

1.4 Significance of the Study ........................................................................ 6

1.5 Thesis Organizations ............................................................................... 8

CHAPTER II - Literature review and Hypothesis Development ...................... 9

2.1.1 Audit Judgment .................................................................................... 10

2.1.2 Locus of control ................................................................................... 10

2.1.3 Time Pressure ....................................................................................... 10

2.2 Hypothesis development ......................................................................... 12

x

2.3 Theoretical Frame Work and Research Model ....................................... 12

2.3.1 The influence of internal locus of control to time deadline pressure ... 12

2.3.2 The influence of internal locus of control to time budget pressure ...... 13

2.3.3 The influence of external locus of control to time budget pressure ..... 13

2.3.4 The influence of external locus of control to time budget pressure ..... 13

2.3.5 The influence of time deadline pressure to audit judgment ................. 14

2.3.6 The influence of time budget pressure to audit judgment .................... 14

2.3.7 External Locus of Control influence Audit judgment .......................... 14

2.3.8 Internal Locus of Control influence Audit judgment ........................... 14

2.3.9 Internal and External locus of control simultaneously influence

audit judgment through time pressure ................................................ 15


audit judgment through budget pressure ............................................ 15


audit judgment .................................................................................... 15

2.3.12 Research model .................................................................................. 16

CHAPTER III - RESEARCH METHODOLOGY .............................................. 17

3.1 Sampling ................................................................................................. 18

3.2 Instrument ............................................................................................... 19

3.3 Operational Definitions of Variable ........................................................ 19

3.3.1 Internal locus of control ....................................................................... 19

3.3.2 External locus of control ...................................................................... 20

xi

3.3.3 Time Budget pressure .......................................................................... 20

3.3.4 Time Deadline pressure ....................................................................... 20

3.3.5 Audit Judgment .................................................................................... 20

3.4 Statistical analysis ................................................................................... 21

CHAPTER IV - RESULT AND DISCUSSION ................................................... 22

4.1 Result ...................................................................................................... 23

4.4.1 Measurement Model analysis ............................................................... 29

4.4.2 Structural Model analysis ..................................................................... 32

4.4.3 Hypothesis Testing ............................................................................... 33

4.2 Discussions .............................................................................................. 35

CHAPTER V - CONCLUSION AND RECOMMENDATION ......................... 36

5.1 Conclusion .............................................................................................. 36

5.2 Recommendation..................................................................................... 37

LIST OF REFERENCES ....................................................................................... 40

APPENDICES ......................................................................................................... 51

1

The Influence Of Locus Of Control On Audit Judgment Through Time

Deadline Pressure and Time Budget Pressure

Abstract

This research aims to identify the mediating effect of time deadline pressure and

time budget pressure on the relationship between internal locus of control and

external locus of control towards audit judgment. This research is using

quantitative method with primary data as a source of information. The research

took 172 samples of external auditors in around Indonesia.

The research found that time deadline pressure and time budget pressure is not

give significant effect on the relationship between internal locus of control to

audit judgment. The direct test result revealed that one or more independent

variables have significant influence toward time deadline pressure and time

budget pressure towards audit judgment. Time pressure does not give significant

effect toward audit judgment, While R-squared analysis showed that the research

model is able to describe audit judgment by 10%.

Keywords: time pressure, budget pressure, external locus of control, internal

locus of control, audit judgment.

2

Pengaruh Locus Of Control Pada Audit Judgment Melalui Tekanan Waktu

dan Tekanan Anggaran waktu

Intisari

Penelitian ini bertujuan untuk mengidentifikasi efek mediasi tekanan waktu dan

tekanan anggaran waktu pada hubungan antara locus control internal dan locus

control eksternal terhadap penilaian audit. Penelitian ini menggunakan metode

kuantitatif dengan data primer sebagai sumber informasi. Penelitian ini

mengambil 172 sampel auditor eksternal di seluruh Indonesia.

Penelitian ini menemukan bahwa tekanan waktu dan tekanan anggaran waktu

tidak memberikan pengaruh yang signifikan terhadap hubungan antara locus of

control internal dengan penilaian audit. Hasil uji langsung menunjukkan bahwa

satu atau lebih variabel independen memiliki pengaruh signifikan terhadap

tekanan waktu dan tekanan anggaran waktu terhadap penilaian audit. Tekanan

waktu tidak memberikan pengaruh yang signifikan terhadap penilaian audit,

Sedangkan analisis R-squared menunjukkan bahwa model penelitian mampu

menggambarkan penilaian audit sebesar 10%.

Kata kunci: tekanan waktu, tekanan anggaran waktu, locus of control eksternal,

3

CHAPTER I - INTRODUCTION

1.1 Research Background

Nowadays, auditor is a party that has expertise in the field of accounting in

the examination of financial statements relating to material misstatements in the

financial statements. Auditors examine the company's financial statements with

generally accepted accounting principles in Indonesia. The main task of an auditor

is to conduct an audit and provide an opinion on a company's financial statements

which are based on existing legislation is based on education, experience and

training they have and with the attitude of a competent, objective and impartial.

Audit Judgment is one duties of auditor and it is a personal judgment or

perspective auditor in response to information related to the responsibilities and

risks that will be faced auditor when doing audit, which will affect the

manufacture of the final opinion of auditors on the financial statements of an

entity. Auditor also will faced pressure while doing an audit of financial statement

and auditor who has locus of control can yield better audit judgment, because the

auditor was able to resolved the pressure.

The previous research talked about The impact of social pressures, locus

of control, and professional commitment on judgment auditors. First, auditor that

doing judgment in this paper is related to the case of auditors’ willingness to make

a signature on net equipment balance for assets in question. Second, this research

investigates the role of locus of control and the relationship of multidimensional

professional commitment on judgment auditor under conditions of social pressure

and based on Lord and DeZoort (2001) is to investigated the impact of obedience

and conformity pressures on judgment auditor. However, the previous research

find that failed to provide their hypothesis that conformity pressures is influence

judgment auditor. The third, that paper also observe the impact of Locus of

control and the multidimensionality of professional commitment on judgment

auditor if it is under conditions of social pressure. And the based on Libby (1995)

previous researcher also use the same theory, there are two assumption that has a

4

very strong relation but that is not suitable as the fact that appear. The extent of

effects of motivation and cognitive effort on judgment performance depends on

the incentive contract type and process, the knowledge base, and task structure

find it by Libby and Lipe (1992). There are assumption about inconsistent

predictions economics and behavioral research that give a change in

environmental uncertainty influences decision performance.

Based on the previous research above this study has different variables

with a significant influence one to another. Firstly is the independent variables are

internal and external LOC. Locus of control is a personality variable (personalty),

which is defined as an individual's beliefs on whether or not capable of controlling

the fate (destiny) own (Kreitner and Kinicki, 2005). Internal locus of control that

characterizes people has a belief that they are responsible for the behavior of their

work in the organization and this study will examine the relation of internal and

external LOC to the pressure while doing audit. Secondly, the mediating variables

is time pressure that have an significant influence with audit judgment, and time

pressure divided into time deadline pressure and time budget pressure and this

study will be test the significant influence both time pressure to audit judgment.

For this study the audit judgment will be the dependent variable.

1.2 Research questions

Based on the research background above there are several question:

1a : Does Internal LOC have a significant influence to time budget pressure?

1b : Does Internal LOC have a significant influence to time deadline pressure?

2a : Does External LOC have a significant influence to time budget pressure?

2b : Does External LOC have a significant influence to time deadline pressure?

3a : Does time budget pressure have a significant influence to audit judgment?

3b : Does time deadline pressure have a significant influence to audit judgment?

5

4 : Does External Locus of Control have a significant influence to audit judgment?

5 : Does Internal Locus Of Control have a significant influence to audit judgment?

6 : Does Internal and External locus of control simultaneously influence audit

judgment through time pressure?

7 : Does Internal and External locus of control simultaneously influence audit

judgment through budget pressure?

8 : Internal and External locus of control simultaneously influence audit judgment

1.3 Research objectives

The objective is to explore the Effect of locus of control, time deadline pressure

and time budget pressure to audit judgment and also to examine the relationships

of locus of control, time deadline pressure and time budget pressure to audit

judgment. And the benefits for this study is to know the relationship between

locus of control, audit pressure to audit judgment.

To test the relationships between internal LOC and time budget pressure.

To test the relationships between external LOC and time deadline pressure.

To test the relationships between internal LOC and time deadline pressure.

To test the relationships between external LOC and time budget pressure.

To test the relationship between time deadline pressure and audit judgment.

To test the relationship between time budget pressure and audit judgment.

To test External Locus of Control have a significant influence to audit judgment.

To test Internal Locus Of Control have a significant influence to audit judgment.

To test Internal and External locus of control simultaneously influence audit

judgment through time pressure.

6


judgment through budget pressure.


judgment.

1.4 Significant of the Research

By doing the research and studying how LOC influences Time deadline pressure,

Time Budget Pressure to audit judgment, this research is expected to contribute to

the development of science and organization. In addition, this study is expected to

provide the following benefits:

1. Theoretical Benefits:

The results of this study are expected to contribute to science, provided empirical

evidence and understanding of the influence of LOC, Time deadline pressure,

Time Budget Pressure to Audit Judgment taken auditor and for accounting, is

expected to be a study in the process of accounting and audit learning.

This research is expected to be reference material of research to do further

research.

For writers, can contribute to matters relating to locus of control, time pressure

and audit judgment, provide an overview of the dynamics that occur in the public

accounting firm, especially about the LOC, Audit judgment and audit pressure.

For others, may contribute to the development of theory, especially in relation to

audit judgment, and may be used by further researchers as one of the references in

the study.

For public accounting firm, can give practical contribution to take good judgment,

and not to contradict SPAP, and code of ethics.

7

1.5 Thesis organization

This thesis consists of five chapters, in which all chapters have interrelated

relationships between chapters one to the other. The systematic writing of this

research is as follows:

Chapter I Introduction Introduction discusses background issues,

research questions, research objectives,

usefulness of research, and systematics of

writing.

Chapter II Literature Review and Hypothesis

Development

Theories used to support this research are

Rotter (1966) auditing, social learning

theory, time budget pressure, locus of

control, time deadline pressure, and audit

judgment.

Chapter III Research Method

This chapter describes the research design,

the location and scope of the study area, the

object of study, the identification of

variables, the operational definitions of

variables, types and sources of data,

populations, samples and sampling methods,

data collection methods, and data analysis

techniques.

Chapter IV Data Collection and Analysis

The results of the study and discussion

covering the general description of research

respondents, respondent characteristics,

discussion of research results on descriptive

statistics, instrument test, classical

assumption test, multiple linear regression

8

test.

Chapter V Conclusion In conclusion part we make a summarize of

the main point of this study.

9

CHAPTER II - LITERATURE REVIEW AND

HYPOTESIS DEVELOPMENT

2.1.1 Audit Judgment

Auditing becomes a necessity in the current era. Companies are required to

present audited financial statements. According to Alvin A. Arens, Mark S.

Beasley and Randal J. Elder (2011) auditing is the accumulation and evaluation of

evidence about information to determine and report the level of compliance

between information and predefined criteria. Audits should be conducted by a

competent and independent person. According to William F. Meisser, Jr. (2003)

audit is a systematic process with the purpose of evaluating evidence of economic

action and occurrence to ensure the level of compliance between assignment and

predetermined criteria, the results of the assignment is communicated to the

interested parties. Hogarth (1992) defines judgment as a cognitive process that is a

decision-making behavior. In making a judgment, the auditor collects relevant

evidence at different times and then integrates the information from the evidence.

Research on audit judgment has been done by some researchers. The Chung and

Monroe (2001) studies examining the effect of gender and task complexity on

audit judgment suggest that high gender and task complexity significantly

influence judgment taken by the auditor. According to Libby (1993) cited by

Chung and Monroe (2001) knowledge is believed also affect the judgment of an

auditor. Judgment given by an auditor will be better if the auditor has good

knowledge. Similarly, if the knowledge that is owned by a few auditors will be

more not qualified judgment or assessment given by it. Therefore it is necessary to

do research that shows the influence of knowledge possessed by auditors to audit

judgment. Libby (1995) said that a person's performance can be measured by

several elements such as ability (ability), knowledge. Hogart (1992) defines audit

judgment as a cognitive process that is a decision-making behavior. Judgment is

an ongoing process of obtaining information, (including feedback from previous

actions) the choice to act or not to act, and acceptance of further information. The

10

quality of judgment is a function of capacity, effort, internal and external data

(Kennedy, 1993).

2.1.2 Locus of Control

Locus of control (LOC) is the degree to which a person believes they can control

their own destiny (Robbins, 2008). The LOC Rootter's (1966) theory classifies

individuals whether included in internal or external LOCs. Internal locus of

control is the level at which an individual hopes that the reinforcement or outcome

of their behavior depends on their own behavior or their personal characteristics.

The external locus of control is the level at which one expects that reinforcement

or outcome is a function of chance, luck or destiny under another or unpredictable

control. The view of life according to internal and external LOC is very different.

A person who has an internal locus of control can confidently control their own

goals, see the world as predictable and individual behavior plays a role in it.

Individuals with internal locus of control are identified to rely more on their own

expectations and also prefer skill sets than just favorable situations. In individuals

who have external locus of control will view the world as something

unpredictable, so also in achieving the goal so that individual behavior will not

have a role in it. The external locus of control is identified as relying more on the

expectation of being dependent on others, their lives tend to be controlled by

forces outside themselves (such as luck), as well as more searching and choosing

favorable conditions. Chen and Cholin (2008) say accountants who have an

internal locus of control better able to resolve the stress from a higher work

environment that will result in better judgment. Thus it can be concluded that A

person who has an internal locus of control will view the world as something

predictable, and individual behavior plays a role in it so that it will produce a good

judgment. In individuals who have external locus of control will view the world as

something unpredictable, so it is also for achieving the goals that will make the

behaviour of individual can't get role in it and that make people who has external

locus of control can't make a good quality of audit judgment.

11

2.1.3 Time Pressure

According to DeZoort and Lord (1998) states that time budget pressure is defined

as "the obstacle that occurs to the audit engagement because of limited resources

in the form of time allocated to carry out all audit tasks". Time budget pressure is

a time constraint that and or may arise from the limited resources allocated to

perform the task (De Zoort and Lord 1997). According to Ahituv and Igbaria

(1998), the existence of time budget pressure can affect a person's performance.

Auditors often work within time constraints, which may affect their performance

to obtain quality audit results. Liyanarachchi and McNamara (2007) provide a

similar opinion that time budget pressure can lead to auditors' perverse behavior,

which can have serious implications for audit quality, ethics, and welfare of

auditors. Pierce and Sweeney (2004) find time deadline pressure with time budget

strictness to significant variables in describing Quality threatening behavior

(QTB). According to Pierce and Sweeney (2004) time deadlines are related to the

pressure to complete work with a certain date, while the time budget relates to the

pressure to control the amount of time (hours) charged for a job. The occurrence

of time deadline pressure is caused by the need to complete the audit tasks based

on certain time guidelines. Whereas according to (Cook & Kelley, 1991) (cited by

Heriningsih, 2002) time pressure is a pressure on the budget time audit that has

been prepared, so that this pressure will result in reduced efficiency and

effectiveness of audit, audit judgment and job satisfaction, to increase one's stress

level. Time pressure has two dimensions: time budget pressure and time deadline

pressure.

2.2 Hypothesis Development

H1a: Internal Locus of Control influence to Time deadline pressure.

H1b: Internal Locus of Control influence to Budget pressure.

H1b: External Locus of control influence to Time deadline pressure.

H2b: External Locus of control influence to Budget pressure.

12

H3a: Time deadline pressure influence to Audit judgment.

H3b: Budget pressure influence to Audit judgment.

H4: External Locus of Control influence Audit judgment.

H5: Internal Locus of Control influence Audit judgment.

H6: Internal and External locus of control simultaneously influence audit

judgment through time pressure.


judgment through budget pressure.


judgment.

2.3 Theoretical frame work and Research model

2.3.1 The influence of Internal Locus of Control to Time deadline pressure

The internal locus of control have a significant influence to Time deadline

pressure because based on McShane & Von Glinow (2003) said that people with

higher internal locus of control will be stronger when they face hard work

situations and they tend to be more successful in their career than with external

ones. Rootter's (1966) states that people who feel that they are very responsible

for their own destiny have an internal locus of control orientation. For the time

deadline pressure is the pressure of the deadline to occur when the auditor is

pressured to complete an examination task while doing audit, so if person has a

higher internal Locus of control and they can face a higher time pressure they will

think and solve it as a challenge.

2.3.2 The influence of Internal Locus of Control to budget pressure

Internal locus of control has a significant influence to budget pressure because

Rootter's (1966) States that those who feel that they are very responsible for their

13

own destiny have an internal locus of control orientation. So people who own

Locus of control consider that time budget is something to be done and people

with Internal Locus of control can solve the time budget pressures better than

people who do not have Internal Locus of control.

2.3.3 The influence of External Locus of control to budget pressure

The External LOC is influence budget pressure because based on McShane &

Von Glinow (2003) States People who think that all events in their lives are

caused by fate or luck to have an external locus of control orientation. Time

budgets can only arise when the amount of time budgeted is shorter than the total

time provided and the auditor is able to respond to this pressure by completing the

work at the expense of their own time and reporting the amount of time actually

spent in a lower-scoring job of what should be reported. If someone has an

External LOC The pressure faced can make the person think that the pressure is

fate or no luck.

2.3.4 The influence of External Locus of control to Time deadline pressure

The external locus of control has a significant influence to time deadline pressure.

McShane & Von Glinow (2003) state People who think that all events in their

lives are caused by fate or luck to have an external locus of control orientation.

The influence of people who have an External LOC against the pressure to

complete the audit task is that the pressure faced will be defined as a misfortune

and destiny. Pressure from time deadline pressure can make people who have

external LOC can not handle it.

2.3.5 The influence of Time deadline pressure to Audit judgment

Time deadline pressure occurs if the auditor is difficult to complete his work

within the prescribed time limit (Gundry, 2007). And audit judgment from

auditors who have pressure from deadlines will have an effect and the effect of

time deadline pressure can make audit judgment not good.

14

2.3.6 The influence of Time budget pressure to Audit judgment

Time budget pressure is significantly influence to audit judgment. Dezoort (1998)

time budget pressure is defined as a form of pressure arising from the limitation of

time allocation in order to complete the task. Auditors who have time budget

pressure also can not produce a good judgment audit because the usual pressure

on the auditor will affect audit judgment.

2.3.7 External Locus of Control influence Audit judgment

The External LOC is influence budget pressure because based on McShane &

Von Glinow (2003) States People who think that all events in their lives are

caused by fate or luck to have an external locus of control orientation. People that

has a higher external locus of control be able to make a good judgment depends

on their external factors.

2.3.8 Internal Locus of Control influence Audit judgment

Rootter's (1966) states that people who feel that they are very responsible for their

own destiny have an internal locus of control orientation. Hogarth (1992) defines

judgment as a cognitive process that is a decision-making behavior. In making a

judgment, the auditor collects relevant evidence at different times and then

integrates the information from the evidence. When people has higher internal

locus of control the judgment will be good because individuals that has higher

internal locus of control think is their responsibility to make everything good.

2.3.9 Internal and External locus of control simultaneously influence audit

judgment through time pressure

Rootter's (1966) The external locus of control is the level at which one expects

that reinforcement or outcome is a function of chance, luck or destiny under

another or unpredictable control. Rootter's (1966) The external locus of control is

the level at which one expects that reinforcement or outcome is a function of

chance, luck or destiny under another or unpredictable control. Time budget

15

pressure is a time constraint that and or may arise from the limited resources

allocated to perform the task (De Zoort and Lord 1997). According to Ahituv and

Igbaria (1998), the existence of time budget pressure can affect a person's

performance. Auditors often work within time constraints, which may affect their

performance to obtain quality audit results.


judgment through budget pressure

Rootter's (1966) states that people who feel that they are very responsible for their

own destiny have an internal locus of control orientation. Rootter's (1966) The

external locus of control is the level at which one expects that reinforcement or

outcome is a function of chance, luck or destiny under another or unpredictable

control. Dezoort (1998) time budget pressure is defined as a form of pressure

arising from the limitation of time allocation in order to complete the task.


judgment

Chen and Cholin (2008) say accountants who have an internal locus of control

better able to resolve the stress from a higher work environment that will result in

better judgment. In individuals who have external locus of control will view the

world as something unpredictable, so it is also for achieving the goals that will

make the behaviour of individual can't get role in it and that make people who has

external locus of control can't make a good quality of audit judgment.

16

2.3.12 Research model

Internal Locus Of Control

H1a

Time Pressure H3a

H1b

Audit Judgment

H2a

H2b

Budget Pressure

External Locus Of Control

H3b

H5

H4

17

CHAPTER III - Research Methodology

3.1 Sampling

The population in this study are auditors who work at Public Accounting Firm

(KAP) The Big Four and Non-The Big Four :

A. KAP Siddharta Siddharta & Widjaja affiliated with KPMG.

B. KAP Osman, Bing Satrio & Associates who are affiliated Deloitte Touche

Tohmatsu.

C. KAP Prasetiyo, Sarwoko, and Sanjaya affiliated with Earns & Young.

D. KAP Haryanto, Sahari & Rekan; KAP Drs. Hadi Sutanto & Associates

affiliated with Price Waterhouse Coopers.

The consideration of location selection is DKI Jakarta city already representing

big cities in Java Island and 79.73% KAP in Indonesia domiciled in Java (KAP

IAI Directory 2005 - 2006 and KAP head office The Big Four is located in DKI

Jakarta. The sample is considered to be representative to represent Indonesia.The

selection of KAP The Big Four and Non-The Big Four in accordance with

research conducted by De Angelo (1981) where there are differences in quality

between the types of KAP.Criteria selected respondents who have worked at least

1 year Up to more than 6 years the auditor works in the field Auditors working 1

to 3 years (auditor staff) tasked with verifying the information contained in the

ledger, ensuring the accuracy of financial statements, documenting material issues

and usually in the second year of the assignment will act as Senior auditor Senior

auditor (3 - 6 years) tasked to conduct a review And documentation of the overall

audit assignment and is responsible for audit risk identification and

documentation. Senior auditors may also engage in meetings with client, partner

and manager meetings. Audit managers (more than 6 years) are absolutely

responsible for all relationships with clients, supervising the work performed by

auditor staff and senior auditors (Alba et al, 2005).

18

Demographic Table

Gender

Male

Female

Percentage of respondents

80.54%

19.46%

Occupation

External Auditor

Internal Auditor

Partner

30.34%

22.76%

46.90%

Tenure

2-4

4-6

>6

29.81%

32.30%

37.89%

Age

22 - 26

27 - 32

>32

32.20%

30.43%

37.27%

3.2 Instrument

This study is about Effect of locus of control, time deadline pressure, time budget

pressure to audit judgment. Primary data will be obtained by using survey

methods, through data collection techniques with questionnaires. External and

internal locus of control is adapted by Rotter (1966), Time budget pressure

19

adapted from Kelley and Margheim (2002); Lord and DeZoort (2001); Herrbach

(2001), Time deadline pressure is adapted from Kelley and Margheim (2002);

Soobaroyen and Chengavroyan (2006), Audit judgment adapted from Siti Jamilah

et al's (2007) because another measurement is using experimental method so from

this study will used Siti Jamilah et al's (2007) questionnaire.

For the questioner will be distributed directly to the auditor in Public accounting

firm non Big Four and Big four. Three months will be given for the respondent to

fulfill the questionnaire, in order to reduce response bias. After three months, it

will be collected. After that, it will be sorted and the selected response will be

input and analyzed.

3.3 Operational Definition of variables

The dependent variable is the type of variable described or influenced by the

variables in this study. The Likers Scale will be used for fulfill the questionnaire

and it is modified so that it has a range of values 1 to 4, with details 1 (Very

Possible), 2 (Possible), 3 (No Maybe) and 4 (Very Unlikely).

3.3.1 Internal Locus of Control

Internal Locus of control will be measured using 8 items form Rotter's (1966).

These items should be reverse scored. Note. Response choices are; l= Strongly

disagree, 2 = disagree moderately, 3 = disagree slightly, 4 = agree slightly, 5 =

agree moderately, 6 = strongly agree . Sample item from this scale are " On most

jobs, people can pretty much accomplish whatever they set out to accomplish",

and " If you know what you want out of a job, you can find a job that gives it to

you".

3.3.2 External Locus of Control

External Locus of control will be measured using 8 items from Rotter's (1966).

Likers scales will be used from the questionnaire. Sample item from this scale are

"The main difference between people who make a lot of money and people who

20

make a little money is luck" and " In order to get a really good job you need to

have family members or friends in high places".

3.3.3 Time Budget Pressure

Time Budget Pressure will be measured using 16 items from Kelley and

Margheim (2002); Lord and DeZoort (2001); Herrbach (2001). Sample item from

this scale are ":Seniors and staff auditors knowingly underreport chargeable time",

and "under a tight budget, auditor tend to handle substantive test faster".

3.3.4 Time deadline Pressure

Time deadline pressure will be measured using 18 items from Kelley and

Margheim (2002); Soobaroyen and Chengavroyan (2006). Sample item from this

scale are "Auditors tend to fucus on risky areas to saves time", and " The length of

time booked for audit assignment is adequate".

3.3.5 Audit Judgment

The question that will be used to measure Judgment Audit variable in this study

was adopted from Siti Jamilah et al's (2007), 9 items about Gender Influence,

Obedience Pressure and Complexity of Duty to Audit Judgment. Judgment Audit

Variables are measured using Likers scale. The Likers scale used in this study is

modified so that it has a range of values 1 to 5, with details of 1 (Strongly

Disagree), 2(Disagree), 3 (Neutral), 4 (Agree)and 5 (Strongly Agree) .

3.4 Statistical Analysis

The last researcher doing the experimental method is used to examine how

financial incentives and time pressure affect audit performance, based on

predictions by both economic and behavioral theories, and the last research using

ANOVA for measure the relationship one variable to another variables and for

this research Partial Least Squares Structural Equation Modeling (SEM-PLS) will

be used to analyze the relationship between the variables. SEM is used because

SEM capable to test complex research model and capable to test overall research

21

model. SEM also capable to analyze unobserved variables (items that using

questionnaire as the measurement) and counting the measurement error.

22

CHAPTER IV - RESULTS AND DISCUSSIONS

4.1 Results

Internal Locus of control will be measured using 8 items form Rotter's (1966)

with the cronbach’s alpha 0.808. External Locus of control will be measured using

8 items from Rotter's (1966) with the cronbach’s alpha 0.862. Time Budget

Pressure will be measured using 16 items from Kelley and Margheim (2002);

Lord and DeZoort (2001); Herrbach (2001) with the cronbach’s alpha 0.862. Time

deadline pressure will be measured using 18 items from Kelley and Margheim

(2002); Soobaroyen and Chengavroyan (2006) with the cronbach’s alpha 0.774.

The question that will be used to measure Judgment Audit variable in this study

was adopted from Siti Jamilah et al's (2007), 9 items about Gender Influence,

Obedience Pressure and Complexity of Duty to Audit Judgment with the

cronbach’s alpha 0.874.

TABLE 1

Correlation of Variables

Variables LOCI LOCE TP BP AJ

1. Internal Locus Of Control

(LOCI) 0.850

2. External Locus Of Control

(LOCE) 0.033 0.855

3. Time Pressure (TP) 0.132 -0.087 0.830

4. Budget Pressure (BP) -0.056 -0.336* 0.116 0.806

5.Audit Judgment (AJ) -0.053 0.294* -0.250* -0.534* 0.852

23

* Significant at p < 0.001

4.1.1 Measurement model analysis

Measurement model is used to check the linkages between variables by assessing

the validity and reliability of the items relating to specific variable construct

(Sholihin & Ratmono, 2013). Construct validity test is divided into two:

convergent validity and discriminant validity (Sholihin & Ratmono, 2013).

Fulfilled convergent validity means that each indicator in a variable have high

correlation to each other. Fulfilled discriminant validity means that the indicator

in a variables is belong to the variable.

According to Sholihin & Ratmono, (2013), the convergent validity is supported if

loading value of each indicator is higher than 0.70 with p-value significant at

<0.05. They suggested indicators below 0.40 should be dropped out from the

construct. Indicators between 0.40-0.70 should be dropped out if it can increase

the value of average variance extracted (AVE). AVE should be more than 0.50.

Due to these criteria, this study dropped out 22 items from the questionnaire. It is

shown in Table 2.

TABLE 2

Loadings of Each Indicator

Indicators

Standardized

Loadings***

Valid/Droppe

d


24

LOCI1 0.596 Dropped

LOCI2 -0.020 Dropped

LOCI3 0.836 Valid


LOCI5 0.860 Valid


LOCI7 0.855 Valid

LOCI8 0.490 Dropped


LOCE1 0.072 Dropped

LOCE2 0.207 Dropped

LOCE3 -0.029 Dropped

LOCE4 0.879 Valid

LOCE5 0.893 Valid

LOCE6 0.883 Valid



Time Pressure

25

TP1 0.803 Valid

TP2 0.337 Dropped

TP3 0.587 Dropped

TP4 0.485 Dropped

TP5 0.311 Dropped

TP6 0.826 Valid

TP7 0.553 Dropped

TP8 0.860 Valid

Budget Pressure

BP1 0.587 Dropped

BP2 0.579 Dropped

BP3 0.634 Valid

BP4 0.832 Valid

BP5 0.839 Valid

BP6 0.850 Valid

BP7 0.568 Dropped

BP8 0.852 Valid

Audit judgment

26

AJ1 0.470 Dropped

AJ2 0.191 Dropped

AJ3 0.864 Valid

AJ4 0.863 Valid

AJ5 0.160 Dropped

AJ6 0.453 Dropped

AJ7 0.876 Valid

AJ8 0.804 Valid

*** significant at p < 0.001

The total of 22 items dropped out because the loading are between 0.40 and 0.70

and this action increased AVE to reach the standard (> 0.50). The remaining

indicators are shown in Table 3 with AVE at least 0.534 and loading at the lowest

0.836, 0.879, 0.803, 0.634, and 0.804 for Internal Locus Of Control, External

Locus of control, Time Pressure, Budget pressure and Audit Judgment.

Discriminant validity is attained by comparing square roots of AVEs with the

correlation between the constructs. If the AVE square roots of construct are higher

than the correlation between pairs of constructs, then it considered valid (Sholihin

& Ratmono, 2013). Table 1 provides the correlation among the constructs and

square roots of AVE in the diagonal. It shows that all diagonal elements are

greater than the correlation between variables in the same column. Therefore, the

discriminant validity is accepted.

27

Table 1 also indicates that external locus of control has a negative significant

relationship with budget pressure (r = -0.336, p <0.001). It proves that individuals

that has higher external locus of control will not affect pressure that given.

Positive significant relationship between external locus of control with audit

judgment (r = 0.294, p <0.001). It means individuals that has higher external locus

of control must be the judgment of audit also higher. Time pressure has a

negatively significant influence to audit judgment (r = -0,250 p <0.001). It means

Time deadline pressure occurs if the auditor is difficult to complete his work

within the prescribed time limit (Gundry, 2007). And audit judgment from

auditors who have pressure from deadlines will have an effect and the effect of

time deadline pressure can make audit judgment not good. Budget pressure

negatively significant to audit judgment (r = -0,534 p <0.001). It's means time

budget pressure is negatively influence to audit judgment. Dezoort (1998) time

budget pressure is defined as a form of pressure arising from the limitation of time

allocation in order to complete the task. Auditors who have time budget pressure

also can not produce a good judgment audit because the usual pressure on the

auditor will affect audit judgment.

Besides fulfilling validity criteria, reliability assessment also need to be noted.

Reliability shows how consistent measuring model measures the concept. The

measurement can be said reliable if cronbach’s alpha and composite reliability are

more than 0.70 (Sholihin & Ratmono, 2013). Table 3 shows that all constructs are

reliable with cronbach’s alpha and composite reliability at the lowest 0.774 and

0.869 respectively. Overall, the analysis indicates the measurement model already

valid and reliable.

28

TABLE 3

Result of Confirmatory Factor Analysis

Scale Items Standardized

Loadings***

Cronbach's

alpha

Composite

Reliability AVE

Internal Locus of Control 0.808 0.887 0.723

LOCI3 0.836

LOCI5 0.860

LOCI7 0.855

External Locus of Control 0.862 0.916 0.783

LOCE4 0.879

LOCE5 0.893

LOCE6 0.883

Time pressure 0.774 0.869 0.689

TP1 0.803

TP6 0.826

TP8 0.860

29

Budget pressure 0.862 0.902 0.649

BP2 0.634

BP4 0.832

BP5 0.839

BP6 0.850

BP8 0.852

Audit Judgment 0.874 0.914 0.726

AJ3 0.864

AJ4 0.863

AJ7 0.876

AJ8 0.804

*** Significant at p < 0,001

4.1.2 Structural Model Analysis

In SEM-PLS approach, goodness-of-fit criteria can be indicated by average path

coefficient (APC), average R-squared (ARS), and average variance inflation

factor (AVIF). P value for APC and ARS should be less than 0.05 (significant).

AVIF as the multicolinearity indicator should be less than 5. The output of this

study shows that the criteria for goodness of fit are fulfilled with APC=0.262 and

30

ARS=0.191 significant at p<0.05 and AVIF=1.083. Moksony, (1990) stated that

10% of R-squared is acceptable in social sciences research because human

behavior cannot accurately predicted. The multicolineraity should be less than 5,

the lower the AVIF means 2 or more cause variables have high correlation.

Therefore this structural model shows in Figure 2 then used to test the

hypothesized relationship, especially to investigate the indirect effect of Locus Of

Control (both External and Internal Locus of Control) on audit Judgment through

Audit Pressure (Time Pressure, Budget Pressure).

Figure 2

Relationship for each variables:

Direct effect models :


Audit Judgment =0.39 p < .01

H4

31

Result H6 ,H7, H8:


Audit Judgment = -0.16 p= 0.19

H5

R2=0.18

LOCE and LOCI Audit Judgment P = 0.02

H8

LOCE and LOCI Audit Judgment

Time Pressure

R2=0.22

R2=0.04

H6

LOCE and LOCI Audit Judgment

Time Pressure

= 0.42

R2=0.22

R2=0.04

H7

= -0.21 p= 0.02

p<.01

= -0.44 = -0.40

p= 0.13

= 0.24

p= 0.02

= 0.38

p= 0.21 = 0.20

p<.01

32

Mediations each variables:

The results indicate Time pressure in 2 dimensions are not significantly mediation

the dependent variables, the relationship of LOCI - AJ has no significant

relationship (path coefficient = -0.16, p= 0.19). LOCI - TP - AJ (path coefficient =

-0.06, p= 0.33) which is TP is not mediated locus of control internal (LOCI).LOCI

- BP - AJ (path coefficient = -0.17, p= 0.07) which is budget pressure (BP) is not

mediated locus of control internal (LOCI). Shown in Table 4 the mediation is

significantly influence the another dependent variable LOCE - AJ has a

significant relationship (0.39). Time pressure is partially mediated (0.35), budget

pressure is also partially mediated (0.23).


Time Pressure

Audit Judgment


Budget Pressure

Audit Judgment

= 0.35 p < .01

= 0.23 p < .01

33

TABLE 4

Direct and Indirect Effects

Path Path Coefficient

LOCE - AJ 0.39***

LOCE - TP - AJ 0.35***

LOCE - BP - AJ 0.23***

*** Significant at p < .01

4.1.3 Hypothesis Testing

Results in Figure 2 show that Internal Locus of control has no significant

relationship with time pressure (path coefficient = 0.21, p = 0.13) while Internal

Locus of control has no significant relationship with budget pressure (path

coefficient = -0.12, p = 0.17). Hence, hypothesis H1a and H1b is rejected. There

must be factor x in this research that make the result is not significant. The results

also shows that External locus of control has no significant relationship with time

pressure (path coefficient = 0.17, p= 0.16), and External locus of control has

negative significant influence with time budget pressure (path coefficient = -0.37,

p < .01). Therefore, H2b is supported but H2a is rejected . Figure 2 also indicates

time pressure and budget pressure has significant influence to audit judgment with

(path coefficient = -0.20, p < .01), ( path coefficient = -0.50, p < .01) it means H3a

and H3b is supported. The result of direct relationship between the LOCE to AJ in

direct test model is the External locus of control is significant influence the audit

judgment. In the other hand, the relationship of LOCI to AJ is not significant

34

influence, this happen because there are X factor that made the relationship is not

significant. It's means H4 is supported and H5 is rejected. For the result of the

External and internal is not simultaneously influence time deadline pressure and

also time budget pressure. External and internal LOC not simultaneously audit

judgment. It's means H6,H7,H8 is rejected.

4.2 Discussions

This study proposed and examined Time pressure and Budget pressure as the

mediators of the influence between External locus of control, Internal locus of

control to Audit judgment in Indonesian public accounting firms. This study also

investigates the effect of two dimensions of Locus of control. The results show

that time pressure and budget pressure is not mediates Internal locus of control to

audit judgment. Locus of control internal is not affect the budget pressure. Locus

of control internal is not affect the time pressure. Locus of control external not

affect the time pressure. The external and internal LOC not simultaneously

influence audit judgment through time deadline pressure. External and internal

LOC not simultaneously influence time budget pressure. To obtain better

understanding regarding the unsupported result, this study performed informal

interview with one person from the sample by asking them directly regarding the

unsupported relation.

Negative relationship between locus of control internal to budget pressure. From

the interview session, expressed different opinion from the unsupported result . If

he faced a higher pressure he will think that is a challenge for him to solved it all

the pressure because that is his responsible to do that, it is make the locus of

control internal has a negative relationship with budget pressure. Positive

relationship between internal locus of control to time pressure. It not supported

because he said because there are another factor that influence the pressure like

stress and individuals that has higher internal locus of control must be still feel

higher pressure event though individuals that has internal locus of control will

think the pressure that faced as a challenge. Positive influence between external

35

locus of control to time pressure. Unsupported, he said if individuals think that all

that happen to him based on external factor like his manager, his work

environment, luck or destiny that's mean the external locus of control of that

individuals are higher and when a higher pressure faced him he will super stress.

It means if pressure faced by the individuals that has higher external locus of

control that individual will face a really higher pressure. Times pressure and

budget pressure does not mediates internal locus of control to audit judgment. It is

because there are another factor that can be the mediates of internal locus of

control that researcher not observes.

For the supported result are the negative significant relationship between external

locus of control to budget pressure. Negatively significant relationship between

time pressure to audit judgment. Positively significant relationship between

budget pressure to audit judgment. Time pressure is mediates external locus of

control to audit judgment. Budget pressure mediates external locus of control to

audit judgment.

36

CHAPTER V - CONCLUSION AND

RECOMMENDATION

5.1 Conclusion

From the data that already get from external auditor, internal auditor, and

accounting shows that the time pressure and budget pressure not as a mediation of

internal locus of control to audit judgment because there are another factor that

mediates the internal locus of control but in this research that factor is not being

observed. The unsupported result is not significantly mediation the dependent

variables LOCI - AJ has no significant relationship (path coefficient = -0.16, p=

0.19). LOCI - TP - AJ (path coefficient = -0.06, p= 0.33) which is TP is not

mediated locus of control internal (LOCI).LOCI - BP - AJ (path coefficient = -

0.17, p= 0.07) which is budget pressure (BP) is not mediated locus of control

internal (LOCI).Locus of control internal is not influence time pressure and

budget pressure. Locus of control external is not influence time pressure.

This study also proved that the criteria of mediation significantly influenced by

another dependent variable that is Locus of control external. LOCE - AJ has a

significant relationship (0.39). Time pressure is partially mediated (0.35), budget

pressure is also partially mediated (0.23).

This study also has supported result that proof if the higher pressure faced by

individual that has a higher internal locus of control the pressure will be low,

because that individuals think that when that pressure is not solved that must be

the destiny of that individual and based on another external factor that's also will

impact the low judgment audit.

5.2 Recommendation

There is a limitation of this study. The data of this study was collected by

using electronic media which is linked in. Therefore, the respondent of this study

may estimate their behavior more or less than the actual values that develop the

37

bias of research result. There are also other factors that can affect the acceptance

of audit judgment such as work experience and stress. Suggestion for the future

research is to find the other factor that will influence LOC to audit judgment of an

external auditor in Indonesia. It may help public accounting firms to make a new

behavioral policies, so they can prevent bad performance in judgment audit.

38

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of control, and professional commitment on auditors’ judgment

Indonesian evidence. Asian Review of Accounting, 20, (Iss 2), 163 - 178.

Doi: 10.1108/13217341211242204.

Dezoort, T. (2002). Time pressure research in auditing implication for practice.

The Auditor’s Report, 22, 1-5.

De Zoort, F.T, & Lord, A. T. (1997). A Review and Synthesis of Pressure Effects

Research in Accounting. Journal of Accounting Literature, 16, 28-86.

Retrieved from: Scientific research. DOI: 10.4236/ojapps.2016.64025.

Gundry, L.C. (2007). Time budget pressure and auditors’personality type on

reduced audit quality practices. Pacific Accounting Review, 19,

(Iss.2), 125-152.

Gundry Leanne C. & Liyanarachchi Gregory A. (2007). Time budget pressure,

auditors' personality type, and the incidence of reduced audit quality

practices. Pacific Accounting Review, 19, (Iss 2), 125-152. DOI:

10.1108/01140580710819898.

Hua Lee. (2012). Incentive contracts and time pressure on audit judgment

performance. Managerial Auditing Journal, 27, (Iss 3), 263-

283.Doi:10.1108/02686901211207492.

Kelley, T. & Margheim, L. (1990). The Impact of Time budget pressure,

Personality and Leadership Variables on Dysfunctional Behaviour.

Auditing: A Journal of Practice and Theory, Spring, 21-41.

Kelley, T. & Seiler, R. E. (1982). Auditor Stress and Time Budgets.” The CPA

Journal, December, 24-34.

http://dx.doi.org/10.4236/ojapps.2016.64025

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Kreitner & Kinicki. (2005). Organizational behaviour. Publisher: McGraw-

Hill/Irwin.

Libby, R., & Lipe, M.G. (1992). Incentive effects and the cognitive processes

involved in accounting judgment. Journal of Accounting Research, 30,

249-273.

Libby, R. (1995). The role of knowledge and memory in audit judgment, in

Ashton, R.H. and Ashton, A.H. (Eds). Judgment and Decision Making

Research in Accounting and Auditing,Cambridge University Press, New

York, NY, 76-206.

Lord, A. T. & F. T. DeZoort. (2001). The impact of commitment and moral

reasoning on auditors’ responses to social influence pressure.

Accounting, Organizations and Society, 26, (Iss3), 215–235. DOI:

10.1108/S0361368200000222.

Mahfud sholihin, Ph.D & Dr. Dwi Ratmono . (2013).Analisis SEM-PLS dengan

WarpPLS 3.0 untuk Hubungan Nonlinier dalam Penelitian sosial dan

Bisnis. Publisher: ANDI OFFSET.

McShane, Steven L, Von Glinow, Mary Ann. 2003. Organizational Behavior:

Emerging Realities for The Workplace Revolution. Publisher: Mc Graw-

Hill/Irwin, New York.

Otlay & Pierce. 1996. Auditor time budget pressure : consequences and

antecedent”. Accounting. Auditing & Accountability Journal, 9. (Iss 1),

31-54. DOI: 10.1108/09513579610109969.

Siti, Jamila, Zaenal, Fanani dan Grahita, Chandrarin. Pengaruh gender, tekanan

ketaatan dan kompleksitas tugas terhadap audit judgment. Simposium

Nasional Akuntansi X, Makasar, 2007.

40

Spector Paul E.1988. Development ofthe Work Locus of Control Scale. Journal of

Occupational Psychology, 61, 335-3. Retrieved from: http/: Great

Britain 335 ©1988 The British Psychological Society.

Svanberg Jan & Öhman Peter. (2013). Auditors' time pressure: does ethical

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572-591. DOI: 10.1108/MAJ-10-2012-0761

41

APPEDINCES

Questioner:


1.(R) If employees are unhappy with a decision made by their boss, they should do

something about it.

2.Getting the job you want is mostly a matter of luck.

3.(R) Most people are capable of doing their jobs well if they make the effort.

4.When it comes to landing a really good job, who you know is more important than

what you know.

5.(R) Promotions are given to employees who perform well on the job.

6.To make a lot of money you have to know the right people.

7.(R) People who perform their jobs well generally get rewarded for it.

8.(R) Most employees have more influence on their supervisors than they think they

do.


1.(R) A job is what you make of it.

2.(R) On most jobs, people can pretty much accomplish whatever they set out to

accomplish.

3.(R) If you know what you want out of a job, you can find a job that gives it to you.

42

4.Making money is primarily a matter of good fortune.

5.In order to get a really good job you need to have family members or friends in high

places.

6.Promotions are usually a matter of good fortune.

7.It takes a lot of luck to be an outstanding employee on most jobs.

8.The main difference between people who make a lot of money and people who

make a little money is luck.

Time Pressure

1.Time deadline pressure interferes with the proper conduct of an audit.

2.Auditors tend to rely on internal auditors’ work to save time.

3.Time deadlines have become tighter in recent years.

4.Time deadlines are very tight, practically unattainable.

5.Time deadlines tend to be given without consultation.

6.Auditors are asked by their superiors to handle substantive tests and generally

operate faster to meet time deadlines.

7.Normally, time deadlines are met ethically when the manager and the senior

coordinate things together in setting up the budget.

8.Auditors tend to focus on risky areas to save time.

Budget Pressure

1.Under time-budget pressure, auditors prematurely sign-off a required audit step that

43

is not covered at other stages of the audit, without completing the work or noting the

omissions of procedures.

2.Auditors tend to perform superficial reviews of clients’ documents to comply with

budgeted time allocated to the audit assignment.

3.Under time-budget pressure, auditors tend to reduce the amount of work on a step

beyond the normal.

4.Under a tight budget, auditors may accept insufficient or light explanations from the

client.

5.Under time budget pressure, auditors insufficiently document a technical point

needed for the execution of a step.

6.Under a tight budget, auditors declare in their working papers that they have

performed a control that they did not actually perform.

7.Under a tight budget, auditors tend to handle substantive tests faster.

8.Under a tight budget, auditors tend to tick mark audit schedules after an essentially

superficial review of supporting client documents.

Audit judgment

1.You will try to prevent the client accountant from following you to record

information about the test sample.

2.You will conduct a review or examination of the recording of sample information

performed by the client.

3.You will follow your supervisor's instructions and allow the client accountant to

continue taking down your test samples.

44

General project information

Version of WarpPLS used: 3.0

Project path (directory): C:\Users\Compaq\Desktop\

Project file: test paling baru boss.xls

Last changed: 10-Mar-2018 11:55:31

Last saved: Never (needs to be saved)

Raw data path (directory): C:\Users\Compaq\Desktop\

Raw data file: test paling baru boss.txt

Model fit indices and P values

APC=0.262, P<0.001

4.You will protect the reputation of the current client company and maintain good

relationships and decide not to disclose any material misstatements in the audited

financial statements.

5.You will make a judgment correction journal to the financial statements.

6.You will conduct an examination or review of the findings and explain the results of

your review to the client.

7.You will follow the supervisor's instructions and remove the customer from the

confirmation process as requested by the controller.

8.You will not confirm to the controller first though it is a high risk.

(R) QUESTIONS THAT MUST BE REVERSE

45

ARS=0.191, P=0.003

AVIF=1.083, Good if < 5

General model elements

Algorithm used in the analysis: Warp3 PLS regression

Resampling method used in the analysis: Bootstrapping

Number of data resamples used: 172

Number of cases (rows) in model data: 176

Number of latent variables in model: 5

Number of indicators used in model: 18

Number of iterations to obtain estimates: 6

Range restriction variable type: None

Range restriction variable: None

Range restriction variable min value: 0.000

Range restriction variable max value: 0.000

Only ranked data used in analysis? No

Laten variables coefficient

46

* Indirect and total effects *

Indirect effects for paths with 2 segments

LOCI LOCE TP BP AJ

LOCI

LOCE

TP

BP

AJ 0.020 0.156

Number of paths with 2 segments

LOCI LOCE TP BP AJ

LOCI

LOCE

TP

BP

AJ 2 2

P values of indirect effects for paths with 2 segments

LOCI LOCE TP BP AJ

LOCI

47

LOCE

TP

BP

AJ 0.402 0.010

Standard errors of indirect effects for paths with 2 segments

LOCI LOCE TP BP AJ

LOCI

LOCE

TP

BP

AJ 0.082 0.066

Effect sizes of indirect effects for paths with 2 segments

LOCI LOCE TP BP AJ

LOCI

LOCE

TP

BP

AJ 0.003 0.060

48

Sums of indirect effects

LOCI LOCE TP BP AJ

LOCI

LOCE

TP

BP

AJ 0.020 0.156

Number of paths for indirect effects

LOCI LOCE TP BP AJ

LOCI

LOCE

TP

BP

AJ 2 2

P values for sums of indirect effects

LOCI LOCE TP BP AJ

LOCI

LOCE

49

TP

BP

AJ 0.402 0.010

Standard errors for sums of indirect effects

LOCI LOCE TP BP AJ

LOCI

LOCE

TP

BP

AJ 0.082 0.066

Effect sizes for sums of indirect effects

LOCI LOCE TP BP AJ

LOCI

LOCE

TP

BP

AJ 0.003 0.060

50

Total effects

LOCI LOCE TP BP AJ

LOCI

LOCE

TP 0.206 0.168

BP -0.120 -0.373

AJ 0.020 0.156 -0.198 -0.506

Number of paths for total effects

LOCI LOCE TP BP AJ

LOCI

LOCE

TP 1 1

BP 1 1

AJ 2 2 1 1

P values for total effects

LOCI LOCE TP BP AJ

LOCI

LOCE

51

TP 0.133 0.158

BP 0.167 <0.001

AJ 0.402 0.010 0.006 <0.001

Standard errors for total effects

LOCI LOCE TP BP AJ

LOCI

LOCE

TP 0.185 0.167

BP 0.124 0.075

AJ 0.082 0.066 0.078 0.064

Effect sizes for total effects

LOCI LOCE TP BP AJ

LOCI

LOCE

TP 0.057 0.043

BP 0.011 0.136

AJ 0.003 0.060 0.054 0.272

the influence of locus of control on audit …

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