Accuracy of Audit Opinion : Factors that Influence it

Objective – The accuracy of providing audit opinions is very important for stakeholders in the context of business decision making. In order to provide the right opinion, the auditor must have sufficient expertise, independence and experience to support his work. This study aims to analyze the influence of the factors of expertise, independence and experience of auditors on the accuracy of giving audit opinions. Design/methodology – Data collection techniques used in this study are primary data in the form of questionnaires distributed to auditors working in public accounting firms in the Central Jakarta area. The population in this study was 61 KAPs located in Central Jakarta registered in the IAPI 2019 directory. Sampling in this study used a purposive nonprobability sampling technique. There are 78 auditors working in 15 KAP in central Jakarta selected as respondents. This study uses Structure Equation Models (SEM) to achieve the objectives.


Introduction
According to Arens & Oebbecke (2012) "Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria. Auditing should be done by a competent, independent person." The opinion given by the auditor on the company's financial statements reflects the quality of the company in conducting its business. This will be very useful for company stakeholders as a reference and consideration in the context of making a business decision. In other words, the opinion given by the auditor regarding the reasonableness of the company's financial statements must be precise and be able to provide adequate certainty of what actually happens in the company. The auditor must be able to plan and carry out the audit as well as possible and be responsible for the opinions given. However, in practice, there have been several cases of manipulation of financial statements that have tarnished the names of auditors and public accounting firms as well as diluting the trust of the public and other interested parties in the public accounting profession.
One of them is the case of PT SNP Finance which occurred in 2018. PT SNP Finance's annual financial reports have been audited by public accountants from the Public Accountants Office of Satrio, Bing, Eny, and Partners and have obtained reasonable opinions without exception. However, based on the results of the Financial Services Authority examination, PT SNP Finance has indicated that it has presented financial statements that are significantly not in accordance with the actual financial condition, thus causing losses to many parties. The Financial Services Authority considers that Marlinna Public Accountants and Public Accountants Merliyana Syamsul have committed serious violations according to (Otoritas Jasa Keuangan, POJK Number 13/POJK.03/2017) regarding the use of public accountant services and public account-ing firms with three considerations. First, the Public Accountant has provided an opinion that does not reflect the actual condition of the company; secondly, the magnitude of the loss of the financial services industry and society caused by the opinions of the two Public Accountants on PT SNP Finance's Annual Audited Financial Statements and; third, reducing public confidence in the financial services sector due to the quality of the presentation of the Audited Annual Financial Statements by public accountants. For the mistakes that have been made, the Financial Services Authority imposes administrative sanctions in the form of cancellation of registration to public accountants Marlinna, public accountants Merliyana Syamsul and the Public Accountant Office Satrio, Bing, Eny, and Associates related to the results of the OJK examination of PT Sunprima Nusantara Financing or SNP Finance (Lestari, 2018).
Once the importance of the opinion given by the auditor for a company, therefore, an auditor must have good expertise and competence to carry out an audit, collect and analyze audit evidence in order to provide the right opinion (Gusti & Ali, 2008). One of the causes of an audit failure as in the case above is the lack of expertise possessed by the auditor so that he is unable to carry out the audit properly and analyze the potential for fraud or irregularities in the auditee's financial statements. Based on the above cases, things that have not been fully fulfilled are understanding the control of information systems related to customers and the accuracy of the financing receivables journal, obtaining sufficient and appropriate audit evidence on consumer financing accounts receivable. In addition, the Financial Professional Development Center also noted the absence of the reasonableness of assertions and the occurrence and assertions of separate financing income account limits (Kartika, 2019). Auditing standards in Professional Standards for Public Accountants, especially general standards, the first item states that the audit must be carried out by someone or more who has adequate technical expertise and training as an auditor. An expert auditor certainly has a lot of knowledge, which he gets from formal and non formal education as well as from the many work experiences he has. With their expertise, auditors will be able to analyze and evaluate audit findings in a professional manner so that they can affect the accuracy of opinion delivery. An auditor must have sufficient competence before he actually plunges into the world of auditing and must be employed according to his expertise in order to produce good output. Widiarini & Suputra (2017) in their research concluded that the higher the audit expertise possessed by an auditor, the more opinion he gave would be more precise.
The following factor that can influence the accuracy of opinion giving is independence. In the case of PT SNP Finance, auditors were judged not to be independent in carrying out their practices due to a long-standing audit engagement since 2016 (Fuad, 2018). Audit engagements between senior personnel (audit team managers) with the same client for a long period of time certainly had an impact on auditor independence. Auditors will tend to side with the client and be not independent in preparing the audit program, verification, and reporting based on the evidence found. Independence according to general standard SA section 220 in SPAP means that it is not easily influenced, therefore it carries out its work in the public interest. Independence is a very important factor in auditing. Independence can increase the credibility of financial statements so that users can rely on the information presented. Independence is one of the most important characteristics for auditors and is the basis of the principle of integrity and objectivity. Independence is a neutral attitude, impartial or impartial to others and free from influence. In essence, being neutral is a very difficult or even impossible thing, where when we are faced with two choices, namely between right and wrong, between the interests of many people or business interests, between government policies/regulations or company policies, between company interests or interests parties outside the company, and others. So partiality is something that cannot be avoided but must side with the right things. Prasetya & Sari (2017) in their research concluded that the more independent the auditor is free from the influence of other parties so that the JAROE VOL. 2(3) consideration of giving an opinion will be free from other parties. Or in other words, opinions formulated according to reality.
Another factor that can affect the accuracy in giving an opinion is the auditor's work experience. The experience of public accountants will continue to increase as more and more audits are conducted. The more experience the auditor has, the auditor will be better able to detect frauds that exist in the financial statements. Thus the higher the ability to determine which opinion is the most appropriate to be given on the financial statements that are examined appropriately.
Based on the description above, the author's motivation to conduct this research is first, the accuracy of opinion is very important for various parties and the auditor's error in expressing opinions on the audit report will have a negative impact on many interested parties who need the information and the public accounting firm where the auditor works. Second, various previous studies on the expertise, independence, and experience of auditors on the accuracy of giving opinions still show inconsistent results. Research conducted by Widiarini & Suputra (2017) states that expertise influences the accuracy of opinion giving, while research conducted by Puspaningsih & Fadlilah (2017) states that expertise has no effect on the accuracy of giving audit opinion. Research on the effect of independence on the accuracy of opinion giving Prasetya & Sari (2017) shows that there is a positive influence between independence and the accuracy of opinion giving. These results contradict the research conducted by Hellena (2015) which states that there is no influence between independence and accuracy of opinion giving. Research conducted by Sukendra, Yuniarta, & Atmadja (2015) the effect of the auditor's experience on the accuracy of giving opinion states that there is a positive influence between the experience of the auditor with the accuracy of giving an opinion. This is contrary to the results of research conducted by Puspaningsih & Fadlilah (2017) which states that there is no influence between the auditor's experience with the accuracy of giving opinions.

Attribution Theory
The concept that underlies the theory of the accuracy of opinion giving refers to behavioral accounting theory, especially Fritz Heider's attribution theory. Attribution refers to how people explain the causes of other people's behavior or themselves. Attribution is a cognitive process in which people draw conclusions about factors that influence or make sense in the behavior of others (Luthans, 2006:209). If related to this research, this theory is used to explain the effect of auditor expertise. Attribution causes the auditor himself to use his professional expertise to plan and carry out audits properly. The auditor must use his expertise carefully to plan audit procedures and evaluate the evidence obtained. Thus, it will be able to give the right opinion.

Theory of Attitude and Behavior
Another theory that also supports this research is the Theory of Attitude and Behavior. This theory is seen as a theory that underlies the factor of independence. Attitude and behavior theory developed by Triandis (1971) in Prasetyo & Sukardi (2013) states that a person's behavior is determined by attitudes related to what people want to do and consists of beliefs about the consequences of doing behavior, rules socially related to what they think they are, and habits related to what they are used to doing. Attitude and behavior theory is able to influence the auditor to manage his personal factors so that he is able to act honestly, not in favor of particular interest, and think rationally, which will later influence the auditor in taking the appropriate opinion.

Planned Behavior Theory
Theory Planned Behavior is a theory that connects beliefs and behavior. This concept was proposed by (Ajzen, 1985). The purpose and benefits of this theory are to predict and understand the effects of behavioral motivation, both the individual's will and the will of the individual. Basically, this theory is a function of three basic determinants. First, related to one's basic attitude (person in nature) is called attitude toward the behavior (one's attitude towards behavior). The second basic function of determinants is to describe social influences called subjective norms. Third, relating to the issue of control (issues of control) which is called perceived behavioral control (perception of behavioral control). This factor is related to beliefs about the supporting and inhibiting factors for performing a behavior based on an individual's prior experience of the behavior and one's perception of how difficult it is to perform a certain behavior (Achmat, 2010). An example is the auditor's experience in conducting audit procedures to provide an opinion on the financial statements. Thus the selection of this theory is used to explain the auditor's experience of the accuracy of giving opinions (Sabrina & Januarti, 2012).

Audit Opinion
Audit opinion according to Agoes (2012:74) is an opinion about the reasonableness of financial statements prepared by management and is the responsibility of management. While the auditor's opinion according to (Ikatan Akuntan Indonesia, 2011), SA Section 110, the purpose of the audit of financial statements by auditors, in general, is to express opinions about the fairness, in all material respects, financial position, results of operations, changes in equity and cash flow accordingly with accounting principles generally accepted in Indonesia. Audit opinions are expressed in the opinion paragraphs included in the audit report section. Audit reports are very important in an audit or another attestation process because they inform the user of information about what the auditor is doing and the conclusions he obtained. According to (Public Accountant Professional Standards, 2011) PSA 29, audit opinion consists of 5 types namely:(1) Unqualified Opinion; (2) Modified Unqualified Opinion; (3) Qualified Opinion; (4) Adverse Opinion; (5) Disclaimer of opinion.

Expertise
The first general standard in auditing standards states that audits must be carried out by skilled people and have sufficient technical training as auditors (Agoes, 2012:32). Therefore an auditor must take both formal and informal education and have professional experience. The auditor must have the necessary expertise in his duties, this expertise includes expertise regarding auditing which includes, among others: planning an audit work program, compiling an audit work program, carrying out an audit work program, compiling an examination work paper, compiling an inspection report, and an audit report. Expertise is an important element that must be possessed by an independent auditor to work as a professional.

Independence
The second general standard in Professional Standards for Public Accountants reads "In all matters relating to the engagement, the independence of the mental attitude must be maintained by the auditor. "This standard requires the auditor to be independent, meaning that he is not easily influenced because he is carrying out his work in the public interest (distinguished in that he practices as an internal auditor). Thus he is not justified in favor of anyone's interests, because however perfect his technical expertise is, he will lose his impartiality which is very important to maintain his freedom of opinion.

Auditor's Experience
Experience is a process that brings someone to a higher pattern of behavior. Experience can provide a great opportunity for someone to do a better job. The experience referred to here is the experience of auditors in examining financial statements. Libby & Frederick (1990) in Puspaningsih & Fadlilah (2017) found that the more auditor experience can produce various kinds of guesses in explaining audit findings. Butt (1988) in Puspaningsih & Fadlilah (2017) also revealed that experienced audit accountants will make relatively better judgments in professional tasks than inexperienced examining accountants. According to Agoes (2012) in Fiastri & Yudowati (2018) states that the auditor's experience is an auditor who has a better understanding. They are also able to provide reasonable explanations for errors in financial statements and can classify errors based on audit objectives and the structure of the underlying accounting system. The auditor's experience includes the length of work as an auditor and the number of audit assignments.

Effect of Expertise on the Accuracy of Opinion
Attribution theory causes the auditor to use his professional expertise to plan and carry out his audit properly. This means that if an auditor uses facts within himself such as his ability or business, the auditor will be able to carry out his work well. Expertise is an important and fundamental component that must be owned by auditors in carrying out audits which include knowledge and abilities in accounting and auditing in general. With this knowledge, the auditor will provide an appropriate assessment of the various considerations that he faces in auditing the client's financial statements. Triyanto (2014) in Widiarini & Suputra (2017) states that the auditor in carrying out his duties must use their expertise carefully to plan audit procedures and evaluate the evidence obtained, thus, the auditor will be able to provide an accurate opinion. As an "expert" the auditor is considered to have a good understanding of everything related to his field of work. Therefore he will carry out his duties as well as possible and provide the right opinion based on the facts that he found. Research conducted by Widiarini & Suputra (2017) concludes that expertise has a positive effect on the accuracy of opinion giving. This is also in line with the results of research conducted by Pelu, Abduh, & Hesty (2018) which states that expertise has a significant effect on the accuracy of giving opinions. From the description above, the hypothesis can be proposed that: H1: Expertise influences the accuracy of opinion giving

Effect of Independence on the Accuracy of Giving Opinion
Independence is important in carrying out accounting checks because of the trust of clients and users of financial statements in terms of proving the fairness of the preparation of financial statements. Kautsarrahmelia (2013) that auditors who uphold their independence will not be influenced by outside parties in considering the facts found in the examination. Independence means being free from influence, not taking sides, not being controlled by other parties, not dependent on other parties and being honest in considering facts and expressing opinions. The attitude and behavior theory described earlier is able to influence the auditor to manage his personal factors so that he is able to act honestly, not in favor of particular interest, and think rationally, which in turn will affect the auditor in taking the appropriate opinion. With high independence, the auditor will be more free in giving opinions. Research conducted by Prasetya & Sari (2017) concluded that independence had a positive and significant effect on the accuracy of opinion giving. From the description above, the hypothesis can be proposed that H2: Independence influences the accuracy of giving opinions

Effect of Experience on the Accuracy of Opinion
Based on planned behavior theory, the auditor's experience influences the auditor to provide an appropriate opinion. Experience makes the auditor carry out audits better and more proficient again. The experience referred to is the auditor's experience in examining financial statements in terms of the length of time, as well as the number of assignments that have been made. An auditor who has a lot of experience will have more ability to find unusual errors or fraud contained in financial statements and can also provide a more accurate explanation of these findings compared to auditors who are still with little experience (Sukendra et al., 2015). Experienced auditors make a relatively better judgment in professional tasks than inexperienced auditor accountants. The more experienced an auditor, the better the results of auditing will be able to minimize errors in audits that are armed with previous audit experience so that appropriate audit opinion can be given. Research conducted by Pelu et al., (2018) concluded that the auditor's experience had a significant and positive effect on the accuracy of opinion delivery. This is in line with the results of research Sukendra et al., (2015) states that the auditor's experience has a significant positive effect on the accuracy of opinion delivery. From the description above, the hypothesis can be proposed that H3: The auditor's experience influences the accuracy of opinion delivery Based on the framework previously described, the research design is as follows: Expertise H1 Independence H2 Accuracy in Giving Opinion Experience H3

Population and Sample
The population in this study was 61 KAPs located in Central Jakarta that is registered in the IAPI 2019 directory. Sampling in this study used a purposive nonprobability sampling technique which meant taking samples according to certain criteria and members of the population did not have the same opportunity to be selected as samples. Where the criteria are determined solely by the researcher. KAP criteria used as samples in this study are: (a) Public Accounting Firm located in Central Jakarta ; (b) Central Jakarta Public Accountant Office with a business license/branch maximum of 2017 ;(c) Public Accounting Firm that is willing to be used as a research sample. Based on these criteria, the sample in this study amounted to 15 public accounting firms. Respondents in this study are auditors who work at the 15 Public Accountant Firms with the following criteria: (a) Auditors who work as seniors, supervisors, managers, and partners ; (b) Has taken a formal education majoring in accounting/auditing at least strata I (S1) and is expected to have experience. The number of respondents in this study is adjusted to the maximum number of questionnaires that can be accepted by the Public Accounting Firm that is used as the sample of this study.

Operational Definitions and Measurement of Research Variables
This study uses one dependent variable (Y) and three independent variables (X). The variables in this study were measured using a 5 (five) point Likert scale, namely (1) strongly disagree, (2) disagree, (3) doubtful, (4) agree, (5) strongly agree.
 Accuracy in Providing Opinion (Y) The accuracy of giving an audit opinion is measured by 12 questions using instruments from Kautsarrahmelia (2013) in Sari (2017)   Expertise (X1) Audit expertise was measured by 12 question items using instruments from (Agoes, 2012;Meinhard et al., 1987;Pelu et al., 2018;Sukendra et al., 2015) and Mayangsari (2003) in Kautsarrahmelia (2013)   Independence (X2) Independence was measured by 11 question items using instruments from Kautsarrahmelia (2013) in Sari (2017). 1) Independence in the Audit Program consists of: (a) Free from managerial intervention; in the audit program ;(b) Free from all interventions in the audit procedure; (c) Are free from all requirements for audit assignments other than those required for an audit process. 2) Independence in Verification consists of : (a) Freely access all records, examine assets, and employees relevant to the audit conducted; (b) Getting active collaboration from management employees during audit verification; (c) Free from managerial efforts to limit the activities examined or limit the acquisition of evidence; (d) Free from personal interests that hinder audit verification. 3) Independence in Reporting consists of (a) Free from feelings must modify the impact or significance of the reported facts; (b) Free from pressure not to report significant matters in the audit report; (c) Avoiding misleading words in reporting facts, opinions, and recommendations in the auditor's interpretation; (d) Be free of any effort to negate the auditor's judgment regarding facts or opinions in the audit report  Auditor Experience (X3) The auditor's experience is measured by 11 questions using instruments from Suraida (2005) and theories from Libby & Frederick (1990), Butt (1988) in Puspaningsih & Fadlilah (2017), Agoes (2012) in Fiastri & Yudowati (2018)

Data Analysis Technique
This study uses univariate data analysis methods for descriptive analysis, bivariate data analysis to test the validity, reliability and other normality data testing and multivariate data analysis using SEM (Structural Equation Modeling) with LISREL 8.80 software. Hair, Black, Babin, & Anderson ( 2010) provide guidance on the number of samples, namely a minimum sample size of 150 for models consisting of ≤7 constructs, with each construct of more than three items (observed variables), and with low communalities items (0,5) and no under-identified construct. Therefore, to meet the SEM requirements, the bootstrapping of the observation sample is carried out to produce a largersized observation sample (Wijanto, 2008:308). In the study 195 observation samples were used.

Overview of Respondents
Based on the established criteria, the number of Public Accountant Firms sampled was 15, with 78 auditors as respondents.

Instrument Quality Test
Before further analysis, a pre-test or an instrument trial is performed first. The purpose of the trial is to determine the level of validity and reliability of the instrument that will be used to collect primary research data. Trial of 30 respondents chosen randomly from a predefined sample frame. Test results as follows:

Cronbach's Alpha
Audit  Table 2 shows that from the items or questionnaire items to measure the variables of Audit Expertise, Independence, Auditor's Experience and Accuracy in Providing Auditor's Opinion, the Corrected item-total Correlation value is greater than the cut-off Alpha limit value of 0.60 so all items are declared valid and reliable.

Measurement Model Analysis
The measurement model models the relationship between latent variables and observed/measured variables. To do the analysis, Confirmatory Factor Analysis (CFA) is used. CFA according to Joreskog & Sorbom (1993) is used to test unidimensional, validity and reliability of construct measurement models that cannot be measured directly that show the operationalization of variables or research constructs into measurable indicators that are formulated in the form of equations and or specific path charts. The purpose of the Confirmatory Factor Analysis (CFA) is to confirm or test the measurement model, the measurement model whose formulation is derived from theory. The construct validity is measured by the size of the loading factor (path coefficient) of each dimension of the construct, while the reliability of the construct is measured by the composite reliability measure (CR) and the variance extracted measure (VE) Wijanto (2008). The construct is declared reliable if CR> 0.70 and extracted average variance: VE> 0.50 (Brown, 2015). The analysis results are as follows:

SEM (Structural Equation Modeling) analysis
In general, SEM analysis in LISREL can be divided into two, the first is related to the measurement model and the second is related to the structural model. Figure 2 shows the full basic (hybrid) path diagram model, obtained the measurement model and structural model as follows: 1) Model Accuracy (goodness of fit) In structural equation modeling analysis, the overall model compatibility test does not only use a single test statistic but uses several test statistics (Hair, 2006). Most researchers clarify fit index based on absolute, relative, and parsimonious match sizes (Malhotra, 2010).

GoF Statistics
Hasil  Table 4 above shows objective estimates that show that the model match parameters meet the requirements for the goodness of fit.

3) Structural Model
From the analysis of the model above, the model is obtained based on the estimated parameters (coefficients) of the model that can explain the relationship of structural models. The full structural equation above shows: a) Audit Expertise variable (KEA) with path coefficient of 0.29 and t-value = 4.01> 1.97, the effect on Accuracy of Auditor Opinion (KPO) is positive and significant. This means that the higher the value of Audit Expertise will increase the value of the Auditor's Opinion Opinion. Thus the H1 research hypothesis: (There is a positive influence of Audit Expertise on the Accuracy of Auditor Opinion). Proven or accepted. b) Independence variable (IND) with path coefficient of 0.50 and t-value = 7.61> 1.97, the effect on Accuracy of Auditor Opinion (KPO) is positive and significant. This means that the higher the value of Independence will significantly increase the value of the Auditor Opinion Graduation Opinion. Thus the H2 research hypothesis: (There is a positive effect of Independence on the Accuracy of Providing Auditor's Opinion). Proven or accepted. c) Auditor Experience (PNG) variable with path coefficient of 0.38 and t-value = 6.39> 1.97, the effect on Auditor Opinion Accuracy (KPO) is positive and significant. This means that the higher the value of the Auditor's Experience will significantly increase the value of the Auditor's Opinion Opinion. Thus the H3 research hypothesis: (There is a positive influence of the Auditor's Experience on the Accuracy of the Auditor's Opinion). Proven or accepted. d) Value R2 = 0.84 means the coefficient of determination or the amount of contribution of Audit Expertise, Independence and Auditor's Experience in explaining the Accuracy of Providing Auditor Opinions by 84.0% while the remaining 16.0% is explained by other variables not examined. e) F-count = [(0.84 / 2)] / [(1-0.84) / (195-3-1)] i = 0.42 / 0.000838 = 5,01375> F-table = 2.65, it is significant. Thus the H4 research hypothesis: (There is an influence of the Audit Expertise, Independence and Auditor's experience together on the Accuracy of Auditor Opinion). Proven or accepted. While from the Hypothesis Testing Results, it can be concluded that: H1 (There is a positive influence of Audit Expertise on the Accuracy of Auditor Opinion). Proven or accepted; H2 (There is a positive effect of Independence on the Accuracy of Auditor Opinion). Proven or accepted; H3 (There is a positive influence of the Auditor's Experience on the Accuracy of the Auditor's Opinion). Proven or accepted; H4 (There JAROE VOL. 2 (3) is an influence of Audit Expertise, Independence and Auditor's experience together on the Accuracy of Auditor's Opinion). Proven or accepted.

Conclusions
To increase the value of Accuracy in Providing Auditor's Opinion, it is necessary to increase the value of the auditor's Behavior dimension. In addition, the dimensions of Psychological Characteristics in the Audit Skills construct are also enhanced, the Independence in the Audit Program and the Independence in reporting in the Independence construct and the number of tasks performed in the Auditor Experience construct.