The Impact of Covid-19 on Audit Quality: A Study at Public

Accountants in the Pekanbaru Region, Riau Province

Nurul Yusyawiru, Ezky Tiyasiningsih and Indra Firdiyansyah

Faculty of Economics & Business Maritime Raja Ali Haji Maritime University Tanjungpinang, Indonesia

Keywords: Work Experience, Professionalism, Remote Audit, Audit Quality.

Abstract: Auditor's work experience and professionalism could have significant influence on audit quality, both in

conventional audit situations or with remote audits. Extensive experience in conducting audits can help the

auditor identify potential risks and problems that affect the quality of the audit report. The auditor's experience

will help them overcome technical issues and adapt to a different audit environment when conducting remote

audits. The auditor's high professionalism is necessary to ensure that client data and information is kept

confidential. Thus, the work experience and professionalism of the auditor remain important in a remote audit,

but they must also address the challenges that arise in these different audit environments. Appropriate

application of technology, a deep understanding of the client's business, and good cooperation will contribute

to better audit quality in these situations. This research was conducted to determine the effects of auditor

working experience and professionalism on audit quality with remote audit as moderated. From this research

we concluded that work experience and professionalism have significant effect on audit quality and remote

audit is moderating variables which affect both work experience and professionalism on audit quality.

1 INTRODUCTION

The COVID-19 pandemic has had a tremendous

impact on many aspects globally, including the

business and finance sectors. Companies worldwide

have faced uncertain business environment, rapid

economic fluctuations, and drastic changes in

business operations and strategies as a response to

these challenges. The audit function is playing an

increasing role in ensuring the transparency,

reliability, and accountability of financial information

in this context. Audit quality includes the validity and

reliability of audit results.

To face these challenges, a comprehensive

analysis of the impact of COVID-19 on audit quality

is needed to identify adaptive measures needed to

maintain the integrity of financial information and

public trust. In this scenario, it is important to

comprehend the effect of the pandemic on audit

quality, i.e. the validity, accuracy, and reliability of

audit results. The evaluation of risks and the

assessment of assumptions underlying financial

statements can be affected by dramatic changes in

business operations. In addition, the separation of

https://orcid.org/0000-0002-4246-7907

auditor teams due to remote working may affect the

coordination and quality of communication within the

audit team. The pandemic has led to the importance

of evaluating the impact on audit quality. By

understanding the changes in the business

environment and operational practices, we can

identify the adaptive measures needed to ensure that

audits maintain a high standard of quality and

relevance amid these unforeseen challenges (Sari et

al., 2022).

Table 1: Public Accounting Office in Pekan.

No Name

Registration

umbe

Partner

1 El

ufri 22.2.1401 El

ufri

2 Hardi, Drs. &

Rekan

02.2.0485 Hardi

3 Khairul 13.2.0944 Khairul

Nurmalia Elfina

23.2.1417 Nurmalia

Elfina

Tantri Kencana

21.2.1336 Tantri

Kencana

6 Yaniswar &

Rekan

18.2.1184 Yaniswar

Yusyawiru, N., Tiyasiningsih, E. and Firdiyansyah, I.

The Impact of Covid-19 on Audit Quality: A Study at Public Accountants in the Pekanbaru Region, Riau Province.

DOI: 10.5220/0012627400003798

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd Maritime, Economics and Business International Conference (MEBIC 2023) - Sustainable Recovery: Green Economy Based Action, pages 53-57

ISBN: 978-989-758-704-7

The table above illustrates that there are six public

accounting firms in Pekanbaru. According to Arens et

al. (Elder et al., 2020) Audit is the collection and

evaluation of books about information to determine

and report the degree of conformity between that

information and predetermined criteria. Audits are

carried out to evaluate financial reports in order to

maintain the quality (Putri et al., 2023), financial

statements will describe how a company will be in the

future.

The COVID-19 pandemic has encouraged

significant paradigm shifts in many aspects of life,

including business practices and professionalism in

many fields, including auditing. Audits were

performed entirely remotely, no client sites were

visited in order to gather proof (Bauer, 2022) The

emergence of remote auditing practices as a response

to physical and health restrictions has presented new

challenges that need to be understood in the context

of the influence of professionalism on audit quality.

The importance of professionalism in quality audit

practice cannot be overstated. Remote audit practices

may have unique implications for these aspects of

professionalism. Direct communication between the

auditor and the client may be limited in a remote audit

practice. This may affect the auditor's ability to

identify subtler signals related to ethical issues or

potential fraud. In addition, auditor independence in

performing their duties is also a focus of attention.

There are potential risks associated with undetected

outside influence in remote auditing practices.

Therefore, strong regulations on independence and

avoidance of conflicts of interest should be more

strictly enforced.

The quality of a remote audit is largely determined

by the extent to which an auditor is able to integrate

the work experience gained over the years in

conventional business and auditing environments.

Work experience includes a deep understanding of

the client's industry, business processes, potential

risks, and mature communication and analysis skills.

The success of a remote audit depends not only on

technical proficiency in using digital audit software

(Teeter et al., 2010), but also on the auditor's ability

to contextually apply knowledge gained from work

experience in different audit scenarios. By combining

strong industry insights and good communication

skills, auditors with diverse work experience have

greater potential to identify potential discrepancies,

make informed audit decisions, and provide more

substantial recommendations to clients. An in-depth

knowledge of how work experience impacts the

quality of remote audits will be crucial for optimizing

the audit process in an increasingly digitally

connected environment.

The influence of professionalism on audit quality

must not only be maintained but also enhanced in

light of these new dynamics. Auditor's must be

proactive in adapting to changes in their work

environment and maintaining standards of ethics,

independence, competence, and professional

responsibility. The integrity of financial information

and public trust can be maintained and improved by

maintaining these aspects in remote audit practice.

Based on the descriptions above, researchers are

interested in conducting research on "Factors that

affect Audit Quality due to Covid-19" with the object

of research by auditors of public accounting firms

(KAP) in the Pekanbaru, Riau Province.

The problem identification in this study is as

follows:"

1. Does work experience affect audit quality due

to the Covid-19 pandemic at KAP in

Pekanbaru?

2. Does professionalism affect audit quality due

to the Covid-19 pandemic at KAP in

Pekanbaru?

3. Does remote audit moderate the effect of work

experience on audit quality due to the Covid-

19 pandemic at KAP in Pekanbaru?

4. Does professionalism moderate the effect of

work experience on audit quality due to the

Covid-19 pandemic at KAP in Pekanbaru?

2 LITERATURE REVIEW

2.1 Audit Quality

There is a consensus in the auditing community on

the statement that an audit carried out by an auditor

will be of high quality when they have followed

auditing and quality control standards, this aligns

with statements from The Indonesian Institute of

Public Accountants in the Professional Standards of

Public Accountants (SPAP). The capacity of an

auditor to find and disclose fraud or mistakes in a

client's accounting information system is known as

audit quality. It is an important aspect of ensuring the

accuracy and reliability of financial statements. The

importance of maintaining a high level of quality

when conducting audits cannot be overstated. This

assists in minimizing any disagreements between

management and shareholders, as financial statement

users rely heavily on their accuracy to make informed

decisions. Shareholders heavily rely on audited

MEBIC 2023 - MARITIME, ECONOMICS AND BUSINESSINTERNATIONAL CONFERENCE

financial statements to help them make decisions

(Shintya, 2016).

2.2 Work Experience

Soekrisno Agoes (Sukrisno, 2012) states an

individual cannot fulfill the requirements intended in

auditing standards, despite his ability in other fields,

including business and finance if he does not possess

adequate auditor experience and education in auditing

will be negatively affected an audit quality.

Experience gained by an auditor also gives him the

ability to deal with obstacles and problems

encountered as they perform their duties, as well as to

be capable of bridging any emotional tendencies they

have towards the party to be examined (Mulyani et

al., 2019).

2.3 Professionalism

Professionalism is the collective responsibility of

individuals to behave better than simply complying

with existing laws and regulations in society and

having their behavior governed by those laws and

regulations (Elder et al., 2020).

2.4 Remote Audit

The use of information and communication

technology (ICT) in remote auditing allows for the

collection, storage, processing, analysis, and sending

of data, which effectively simulates an on-site audit

(ISO 19011, 2018). It is necessary for auditors to

adjust to this new way of working because the remote

audit process involves planning, doing fieldwork,

reporting, and communicating via a variety of digital

media.

3 RESEARCH METHODOLOGY

The author's use of a qualitative method approach is

to create a structured, original, and precise description

of the nature, facts, and relationships between the data

under study. Qualitative research is a scientific

approach to explain social situations, assembling

words based on linked data analysis collection

techniques. Researchers reasoning in using a

qualitative approach due to this research requires an

explanation in the form of direct information from

auditors related to audit quality through remote audits

at the Public Accounting Firm in Pekanbaru.

Based on the title that has been explained in the

previous discussion, namely "Factors that affect

Audit Quality due to Covid-19" with the object of

research by auditors of public accounting firms

located in Pekanbaru, Riau Province. This research

has several variables that are interrelated, namely the

independent variables which are work experience and

professionalism variables, and the dependent

variable, which is audit quality and the moderating

variable, namely remote auditing.

4 COPYRIGHT FORM

Solemnly declare that the manuscript submitted

above is authentic, self-made, not adapted or

translated from other works, and have not been

published and/or being processed in any form of

media. I am willing to take full responsibility if there

are certain parties who feel aggrieved or demand a

lawsuit in the future by the demand a lawsuit in the

future by the publication of this manuscript.

5 RESULT AND DISCUSSION

5.1 Effect of Work Experience on

Audit Quality

The quality of audit can be affected by work

experience in the field of audit, particularly during the

pandemic. In this discussion, we will explain how

work experience affects audit quality during the

pandemic.

Auditors with extensive experience in a particular

industry have a better understanding when identifying

potential risks that may arise. Furthermore, work

experience allows auditors to develop a better

understanding of the relevant rules and regulations.

Changes in rules and regulations are often made

quickly during the pandemic to address changing

business conditions. Experienced auditors are more

adept at comprehending and accurately implementing

these changes in their audits.

The development of auditors' analytical skills is

heavily influenced by their work experience. Auditors

who have faced various situations and challenges in

their jobs have better analytical abilities to evaluate

financial information and identify potential issues or

discrepancies, this aligns with the research conducted

by Rianto & Diniyanti (Rianto and Diniyanti, 2020)

However, it's important to note that work experience

alone is not sufficient. Auditors also need to ensure

that they stay updated with the latest developments in

the field of audit, especially in the context of the

The Impact of Covid-19 on Audit Quality: A Study at Public Accountants in the Pekanbaru Region, Riau Province

pandemic. This includes understanding evolving

audit technology, changes in audit practices, and

compliance issues related to the pandemic.

In conclusion, work experience has a significant

influence on audit quality during the pandemic.

Experienced auditors have an advantage in

understanding the business, rules, and regulations in

place, as well as the analytical skills necessary to

address the challenges at hand. However, auditors

must also continually update their knowledge to

remain relevant and effective in dealing with the

ongoing changes resulting from the pandemic.

5.2 Effect of Professionalism on Audit

Quality

Professionalism plays a crucial role in determining

the quality of audits conducted by an auditor.

Professional ethics, independence, integrity, and

objectivity play a significant role in an auditor's

ability to make objective and critical assessments of

an entity's financial statements in practice. An auditor

who maintains their independence and is not affected

by conflicts of interest is more likely to identify

potential errors or fraud in financial reports.

Furthermore, professionalism can be gauged by

having a strong grasp of audit standards and relevant

regulations. Auditors who consistently stay updated

with the latest developments in audit practices will

apply these guidelines correctly on their audit

procedures, ultimately enhancing the accuracy and

reliability of audit results.

The required audit quality to ensure public trust in

the presentation of financial information of a

company or organization depends on strong

professionalism.

According to Iskandar's (Iskandar, 2014)

research, professionalism is more defined by one's

attitude and behavior when carrying out their

profession. Professionalism is essential for anyone

who wants to be an auditor, along with having the

necessary skills and maintaining a disciplined and

consistent approach to their work. Siahaan &

Simanjuntak (Siahaan, 2019) stated that

professionalism among auditors has a positive

influence on audit quality at the Public Accounting

Firm (KAP) in Medan. However, in another research,

Nurhayati & Wahyono (Nurhayati, 2017) concluded

there was no effect of professionalism on audit

quality.

5.3 Remote Audit can Moderate the

Effect of Work Experience on

Audit Quality

The influence of remote auditing is an important

factor that can moderate the effect of work experience

has on audit quality. As digital and information

technology continues to evolve, audit practices are

increasingly utilizing remote approaches using

communication technology and specialized software.

When audits are carried out remotely, the influence of

an auditor's work experience on the quality of the

audit may increase.

The extent to which audit quality can be

maintained depends on an auditor's ability to adapt to

the changing, more virtual, and technology-based

audit environment. Therefore, the influence of remote

auditing can moderate the effect of auditor's work

experience on audit quality, enabling enhancements

in efficient audit monitoring and control within the

current digital context.

5.4 Remote Audit can Moderate the

Effect of Professionalism on Audit

Quality

COVID-19 pandemic has seriously affected many

facets of life, including auditing. The change in work

patterns to remote auditing has become one of the

challenges for auditors. Professionalism is a

significant factor that influences audit quality.

Professional auditors have high competence and

integrity, so they can conduct audits independently

and objectively. The findings indicated that remote

audit can lessen the impact of professionalism on

audit quality. This shows that remote audit can

strengthen the effect of professionalism on audit

quality.

There are several explanations for the results of

this study. First, remote audit can increase audit

efficiency and effectiveness. Auditors can focus more

on the audit process and avoid distractions from a

non-conducive work environment. Remote audit can

enhance communication and collaboration between

auditors. Auditors can utilize information technology

to communicate and collaborate effectively. Third,

remote audit can increase auditor objectivity.

Auditors can be more objective in conducting audits

because there is no pressure from clients. However,

this contradicts conducted by Albitar & Gerged,

(Albitar et al., 2020) where the limitations of the

remote audit application will lead to possible auditor

opinion errors which have an impact on reducing

audit quality.

MEBIC 2023 - MARITIME, ECONOMICS AND BUSINESSINTERNATIONAL CONFERENCE

6 CONCLUSIONS

Based on the results of research discussed in the

previous chapter, the following conclusions indicate

that both work experience and professionalism have

a significant effect on audit quality. Thus, hypotheses

one and two are accepted. Its also concluded that

remote audit can moderate the effect of both work

experience and professionalism. Therefore,

hypotheses three and four are also accepted.

The effect of remote audit as a moderator on

the relationship between professionalism and audit

quality in Public Accounting Firms (KAP) in

Pekanbaru City, which is affected by the Covid-19

Pandemic, is an interesting aspect to discuss. In this

context, auditor professionalism plays a major role in

ensuring audit integrity and accuracy, while remote

audit presents new challenges in carrying out efficient

audit practices. How the influence of professionalism

in auditing can be moderated by the adoption of

remote audit during the pandemic is key to

understanding how the audit industry adapts to rapid

changes and maintains high standards of audit

quality, especially in the Pekanbaru City area which

is also affected by the pandemic. Therefore, auditors

must maintain their integrity and avoid conflicts of

interest. This is important to ensure that auditors can

conduct audits independently and objectively, KAP

must implement clear and documented audit policies

and procedures. Clear audit policies and procedures

can help auditors to conduct audits consistently and

effectively.

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The Impact of Covid-19 on Audit Quality: A Study at Public Accountants in the Pekanbaru Region, Riau Province