Factors that Influence Auditor’s Professional Skepticism
Evidence from Audit Firms in Surabaya
Lidia Sari Christina and Heru Tjaraka
Department of Accounting, Airlangga University, Surabaya, Indonesia
Keywords: The auditor’s professional scepticism, experience, expertise, audit situation, ethics, gender.
Abstract: The purpose of this study is to examine the factors that influence auditor’s professional scepticism. The
independent variables used in this study are experience, expertise, audit situation, ethics, and gender
whereas the dependent variable is auditor’s professional scepticism. Data was collected then processed by
Partial Least Square (PLS) from the result of developed questionnaire which were disseminated to the Audit
Firm-KAP in Surabaya. The number of respondent involved in this study were 59 out of 100 respondents or
50 % response rate. The survey questionnaire was delivered directly to the respondents in 15 Audit Firms in
Surabaya by purposive sampling method. After all, the final result shows that expertise, audit situation, and
ethics have positive and significant influence on auditor’s professional scepticism. Whereas experience and
gender do not have a positive influence on auditor’s professional scepticism, because the majority of
respondents' experience is still low, about 10 to 20 assignments and the response answer of both male or
female auditors is the same.
1 INTRODUCTION
Professional scepticism is a vital element in auditing
financial statements. The auditor’s professional
scepticism includes a critical assessment of audit
evidence and is particularly important when
considering the risks of material misstatement due to
fraud. It also means remaining alert for evidence
that contradicts other audit evidence or that brings
into question the reliability of information obtained
from management and those charged with
governance (
AUASB, 2012).
In providing appropriate reports on the
company's financial statements, the auditor must
adhere to professional standards, in which the
auditor is required to apply professional scepticism
(
Glover and Prawitt, 2014). In their assignment, the
auditor should always apply professional scepticism
during the process of collecting and assessing audit
evidence (
AICPA, 2001). A sceptical auditor does
not easily believe in the existing audit evidence,
rather they will always question about the
information they got from the client. Research
conducted based on Accounting and Auditing
Releases (AAERS) stated that one of the causes of
audit failure is an inadequate level of professional
scepticism applied by the auditor (Beasley et al.,
2001). Therefore, it can be said that when the level
of auditor's professional scepticism is low, it can
lead to failure in detecting fraud. Professional
scepticism of an auditor can be influenced by many
factors, including experience, expertise, audit
situation, ethics, and gender (Kushasyandita, 2012).
In this study professional skepticism was measured
through questionnaires given to respondents
regarding (1) auditor's level of doubt on audit
evidence, (2) number of additional assessments, and
(3) direct confirmation.
Both experience and expertise are important
elements for the auditor in performing audit
procedures because the expertise of an auditor also
tends to affect the level of professional scepticism of
an auditor (Kushasyandita, 2012). Experience is
something that needs to be paid attention in the
auditor's sceptic level of judgment, in which
experience allows the auditor to develop knowledge
of patterns that allow them to determine when
evidence does not accumulate (Hurtt, 2013). Auditor
with deeper knowledge of a client’s business is
better in resisting client’s persuasion attempts
(Brewster, 2015). In this case, an experienced
auditor will be more likely to provide a reasonable
explanation for the mistakes in the financial
statements and may classify those errors based on
the audit objectives and structures of the underlying
accounting system. Therefore, it is suspected that
326
Christina, L. and Tjaraka, H.
Factors that Influence Auditor’s Professional Skepticism - Evidence from Audit Firms in Surabaya.
In Proceedings of the 1st International Conference on Islamic Economics, Business, and Philanthropy (ICIEBP 2017) - Transforming Islamic Economy and Societies, pages 326-330
ISBN: 978-989-758-315-5
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved

experience has an influence on auditor's professional
scepticism. The experience referred in this study is
the experience of an auditor in doing financial
statements audit in terms of time duration or the
number of assignments that have been done.
Experience variable was measured by questionnaire
on respondents' demographics on the number of
audit assignments completed during the work at the
Audit Firms and how long the auditor had their
experience as an auditor (Kushasyandita, 2012).
Expertise is an important component an auditor
must have in order to work professionally. This is
described in the first general standard of SA Section
210 (SPAP, 2011). In addition, expertise is
described as a progress of individual knowledge
during the development stage from beginner to
expert Harteis and Billett, 2013). The audit
committee needs to have the expertise and
commitment to ask critical questions about
management and external auditors. Moreover, the
audit committee should promote a culture of
professional scepticism by challenging judgments
from both management and auditors and
encouraging all parties to see all the potential
evidence when making a decision (
Glover and Prawitt,
2014)
. Situation factor such as high-risk audit
situation also affects an auditor to improve the
attitude of Auditor’s Professional Scepticism
(Winantyadi and Waluyo, 2014). The situation such
as the difficulty to communicate between past
auditor and new auditor on the information about a
company as an auditee will affect Auditor’s
Professional Scepticism (Arrens, 2007). Therefore, it
is suspected that expertise has an influence on
auditor's professional scepticism. In this study, the
measurement indicators for the expertise are
statements contained in a questionnaire of expertise
in which the questionnaire contained three
statements (Kushasyandita, 2012). They are intended
to determine the ability and knowledge possessed by
an auditor.
Audit situation is a situation in an audit
assignment, in which the auditor is exposed to a
situation with low audit risk (regularities) and a
situation with large audit risk (irregularities)
(Mulyadi, 2011). Irregularities are often defined as a
situation where deliberate or unintentional fraud
occurs. Other study found that the audit situation is
positively affect the auditor’s professional
scepticism (Winantyadi and Waluyo, 2014) (Anisma
and Abidin, 2012). Therefore, it is suspected that
audit situation has an influence on professional
scepticism. In this study, the audit situation variable
was measured using questionnaire questions, there
are five illustrations contained in scenarios one
through five (Kushasyandita, 2012).
Auditor’s ethics has an influence on auditor’s
professional scepticism (Winantyadi and Waluyo,
2014). Professional ethics is required by the auditor
as it is used to maintain public confidence in the
audit. Ethics in this study is a standard or a rule that
guides the act of a person to enhance one's dignity
and honor. The higher the auditor's ethical
awareness in auditing, then it will develop their
professional attitude (Winantyadi and Waluyo,
2014). Therefore, it is suspected that auditor’s ethics
has an influence on auditor's professional scepticism.
In this study, the professional ethics variable was
measured by questioning on the questionnaire for
professional ethics using three illustrations
(Kushasyandita, 2012).
Additionally, gender is also another factor that
affects auditor’s professional scepticism. In general,
gender is a visible difference in terms of behavior
and characteristics that exist in men and women. The
female internal auditors are on average more
sceptical than male ones (Fullerton and Durtschi,
2005). Therefore, in the presence of differences
between male and female characters, it may affect
attitudes and actions performed, so it is suspected to
be one of the reasons gender has an influence on an
auditor's professional scepticism. For the gender
variable, measurements for the variable can be seen
from the demographic of respondents, with
information (1) Male, (2) Female (Kushasyandita,
2012).
Based on the background above, the purpose of
this study is to examine the factors that influence
auditor’s professional scepticism. The method used
is the survey method and the type of data used in this
study is quantitative data in the form of score results
of each scenario in the questionnaire that have been
disseminated. Data analysis techniques in this study
are using Descriptive Statistics Analysis and Partial
Least Square (PLS) with the program SmartPLS.
The result shows that expertise, audit situation, and
ethics have positive and significant influence on
auditor’s professional scepticism. Whereas
experience and gender do not have a positive
influence on auditor’s professional scepticism.
2 METHODS
In this study, the method used is the survey method,
in which the author comes directly to the 15 Audit
Firms (KAP) located in Surabaya. The population in
this study was the auditors working on KAPs in
Surabaya and all the population were used as the
research sample. Sampling was done by purposive
sampling method.
Factors that Influence Auditor’s Professional Skepticism - Evidence from Audit Firms in Surabaya
327

The type of data used in this study is quantitative
data in the form of score results of each scenario in
the 100 questionnaire that have been disseminated.
The research data is the answer of respondent
questionnaires on auditor scepticism, experience,
expertise, audit situation, ethics and gender of the
auditors who work at KAPs in Surabaya. Data
analysis techniques in this study are using
Descriptive Statistics Analysis and Partial Least
Square (PLS) with the program SmartPLS.
3 RESULTS AND DISCUSSION
In this research the result of a questionnaire that can
be processed is 59 out of 100 or 50% rate.
Hypothesis testing was done by looking at the t-
statistic generated structural models (inner models).
The hypothesis can be accepted if t-statistic > 1.96.
The following is the Figure. 1 of the t-statistic
generated structural models (inner models) and the
coefficient of influence (original sample) :
Figure 1: The t-statistic of the influence of experience, expertise, audit situation, ethics, and gender on auditor’s
professional skepticism.
Table 1: The test result.
Table 1 are the coefficient and t-statistic of the
influence of experience, expertise, audit situation,
ethics, and gender on auditor’s professional
skepticism.
From the table 1, the coefficient of the influence
of experience on auditor’s professional skepticism is
0.125 with t-statistic of 0.855 <1.96 showed in
Figure. 1. These results conclude that there is no
significant positive influence between experience
and auditor’s professional skepticism. Basically, an
auditor with longer term has generally performed
more audit assignments, thus having more
experience in detecting potential mistakes and frauds
during audits (Larimbi et al., 2017). In addition,
experienced senior auditors exhibited more
consistency between the selected relevant
information and the control risk assessment
response, selected fewer cues, and made judgments
in less time (Cahan and Sun, 2015). Other research
showed that the experience positively affected the
Auditor’s Professional Scepticism (Winantyadi and
Waluyo, 2014) (Anugerah, 2014). The study also
found that more experience reviewers more
accurately assess fraud risk (Agoglia et al., 2009).
However, in this study there is no significant
positive influence between experience and auditor’s
professional skepticism. The reason for that is
ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy
328

suspected because the majority of respondents'
experience is still low, about 10 to 20 assignments.
Thus, it can be said that when the level of auditor's
experience is low, then auditor's professional
scepticism is low and it can lead to failure in
detecting fraud.
For expertise variable, the coefficient of the
influence of expertise on auditor’s professional
skepticism is 0.360 showed in Table 1 with t-statistic
of 2.645 > 1.96 showed in Figure. 1. These results
conclude that there is a significant positive influence
between the expertise and auditor’s professional
skepticism. The first general standard of SA section
210 explains that an audit should be carried out by a
person with sufficient technical skills and training as
an auditor (Institut Akuntan Publik Indonesia, 2012).
The assumption of auditing expertise is that the
more knowledge auditors have, the more likely it is
that they hold a higher position, and also being
better at knowledge transfer due to experience will
mean that they make different (better) decisions than
someone with less knowledge (Rodgers et al., 2017).
In addition, the third general standard of SA section
230 states that in performing audit of the statement
preparations, the auditor has to use their professional
proficiency meticulously and thoroughly (Institut
Akuntan Publik Indonesia, 2012). Therefore, each
auditor is required to have professional skill and
expertise in performing their duties as an auditor.
The result in this study shows that the expertise
positively affects auditor’s professional scepticism.
This means that the higher the auditor's expertise,
will increase significantly (real) auditor professional
skepticism.
For audit situation variable, the coefficient of the
influence of audit situation on auditor’s professional
skepticism is 0.384 showed in Table 1 with t-statistic
of 3.675 > 1.96 showed in Figure. 1. These results
conclude that there is a significant positive influence
between audit situation and auditor’s professional
skepticism. In this case, an audit situation with high
risk (irregularities situation) will affect the auditor to
improve the attitude of Auditor’s Professional
Scepticism (Winantyadi and Waluyo, 2014). This
means that the higher the audit situation, will
increase significantly (real) auditor professional
skepticism.
For ethics variable, the coefficient of the
influence of ethics on auditor’s professional
skepticism is 0.307 showed in Table 1 with t-statistic
of 2.296 > 1.96 showed in Figure. 1. These results
conclude that there is a significant positive influence
between ethics and auditor’s professional
skepticism. In this case, the characteristics that can
describe professional scepticism possessed by an
auditor includes a questioning mind. A questioning
mind indicates that an auditor is sceptical in terms of
finding excuses, evidences, justifications, or proofs
(Hurtt, 2010). Professional ethics is required by the
auditor to maintain Auditor’s Professional
Scepticism attitude (Winantyadi and Waluyo, 2014).
This study shows that the auditor ethics affects
Auditor’s Professional Scepticism. This means that
the higher ethics, will increase significantly (real)
auditor professional skepticism.
For gender variable, the coefficient of the
influence of gender on auditor’s professional
skepticism is 0.045 showed in Table 1 with t-statistic
of 0.457 < 1.96 showed in Figure. 1. These results
conclude that there is no significant positive
influence between gender and auditor’s professional
skepticism. Generally, gender is the effect of social
definitions and internalizations of the meaning of
being a man or a woman (Haynes, 2013). In essence,
men and women have equal positions, both of which
are created in the same degree, self-worth, and
dignity. Characteristics of men and women can
influence how they deal with something (Larimbi et
al., 2017). Other study showed that the professional
scepticism of female management accountant is
higher than that of a male management accountant
(Charron and Lowe, 2008). In addition, study found
that the female auditors are more accurate in
performing complex assignments than the male ones
(Chung and Monroe, 2001). However, in this study
shows that there is no significant positive influence
between gender and auditor’s professional
skepticism. The reason for that is suspected because
the response answer of the respondents in Surabaya
both male or female auditors are the same. This
means that male and female auditors have the same
view on professional skepticism.
4 CONCLUSIONS
This study examined the factors that influence
auditor’s professional scepticism. The independent
variables used in this study are experience, expertise,
audit situation, ethics and gender whereas the
dependent variable is auditor’s professional
scepticism. In this study, the results showed that
expertise, audit situation, and ethics have positive
and significant influence on auditor’s professional
scepticism. While experience and gender do not
have a positive influence on auditor’s professional
scepticism. This study provide an explanation that in
order to improve the quality of audit, each auditor
should always improve the audit experience, audit
expertise, consider audit risks in certain audit
situations, ethical awareness, as well as improve
Factors that Influence Auditor’s Professional Skepticism - Evidence from Audit Firms in Surabaya
329

auditor’s professional scepticism for both male and
female auditors, in order to provide the right
opinion, because they will be useful to improve the
integrity and credibility of the public accountant
profession. This study has a number of limitations.
In this study, the method used is only the survey
method (i.g. spreading the questionnaire), without
conducting interviews. Therefore, the results
obtained only based on data collected through
written questionnaires. Further research is expected
to add data collection methods, such as interviews or
observations, to understand more about the actual
state of respondents. In addition, future research is
expected to not spread the research questionnaire at
the time the auditor is performing many audit tasks
that are usually done at the end of the year. It is
necessary to note in order to get more research
samples.
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