Nowadays, the audit professional has received a great deal of attention from many researchers. Audit service is perceived to play an important role in reducing information asymmetry (Beatty, 1989; Willenborg, 1999) as well as in mitigating agency problems between managers and shareholders and between shareholders and creditors (Jensen & Meckling, 1976). Therefore, owners hire auditors to produce information used in contracting with managers (Antle, 1982; Watts & Zimmerman, 1986). Moreover, an auditor's role is to assuage agency problems resulting from the separation of ownership and control (management). This role could be successful only if an audit opinion reflects the true findings of the audit engagement. According to the statement of Financial Accounting Concepts No.1" financial statements are often audited by independent accountants for the purpose of enhancing confidence in their reliability". Users of financial statements perceived audit reports to provide absolute assurance that company financial statements have no material misstatements and do not perpetrate fraud (Epstein and Geger; 1994). On the other hand, auditors perceive audit performance in terms of strict adherence to GAAS/ISA requirements. Auditors working with a company also strive to avoiding litigation and limiting the damage to their image and trustworthiness which is result from audit failure. For example, the demise of case of Arthur Andersen in 2002 is the results of audit failure. However, this research emphasis the result of audit are both of the gap, protect misstatements and fraud. Thus, auditor should have knowledge and code of ethic to provide the information quality in financial report and eliminate material misstatement and manipulation in the net income to provide precise information regarding the firm's value.
However, this research examine enhances the understanding of auditor professional at the public sector. Most the word of auditor profession relate to expertise, is based on training and practical experience gained from auditing in a particular (Gramling and Stone, 2001). Expert knowledge gained through experience increase the likelihood that auditors will detect errors in financial statement. Moreover, research indicates that auditors with training or experience in specialized areas outperform those without training or experience (Kwon, 1996; Libby, 1995). However, this research defined the audit professionalism as the auditor could practice that follows the auditing standard and correspond with client or stakeholder expectation in team of professional auditing. Thus, the audit professionalism must have proficiency (skill, knowledge, experience) to operation practice. Considerable research has been undertaken in the recent past to enhance understanding of the factors influencing professionalism of audit term in Asia society. Little is know about this phenomenon in developing countries, particularly in Thailand. Moreover, prior research focuses mostly on the general auditor as Certifies Public
Accountant (CPA). There is little empirical evidence that looks explicitly at Cooperative-Auditors. Thus, this research focuses study on the influence of antecedent variables and consequence variables on audit professional in term of Co-operative-Auditors in Thailand. Both of theories for examine about audit professionalism namely, cognitive theory and resource-based view (RBV). The result found that third-party responsibility, audit-proficiency completeness and individual-ethic adherence effect to audit professionalism. Moreover, this research found the relationship between audit professionalism and consequence variables (audit image and client trustworthiness).
The remained of the paper is organized as follows. Section 2 presents objective research, Section 3 reviews existing relevant literature. Section 4 presents the data set used in this research and research methodology. Section 5 presents a discussion of the empirical results. Section 6 proposes theoretical contribution, practitioner contribution and instructional contribution. And section 7 provides limitation and future research direction.
This primary research question of this work is to investigate the effect o the antecedents and consequences of variables on audit professionalism. The antecedent variables encompass third-party responsibility, audit-proficiency completeness and individual-ethic adherence. In addition, the consequence variable consists of audit image and client trustworthiness. The objectives of this study as are following:
* To investigate the relationship between third-party responsibility and audit professionalism,
* To investigate the effect of audit-proficiency completeness on audit professionalism,
* To investigate the relationship between individual-ethic adherence and audit professionalism,
* To investigate the influence of audit professionalism on audit image,
* To investigate the effect of audit professionalism on client trustworthiness,
* To investigate the influence of audit image on client trustworthiness.
Recognize of financial crisis was significance that serves to the importance review of the auditing profession within the individual competence of auditor. At one level, attention has been drawn to the limited capabilities of auditing that need to reform aspects of practice and regulation including placing further constraints on the services provided by auditors' profession. Most the word of auditor profession relate to expertise, is based on training and practical experience gained from auditing in a particular (Gramling and Stone, 2001). Expert knowledge gained through experience increase the likelihood that auditors will detect errors in financial statement.
Moreover, research indicates that auditors with training or experience in specialized areas outperform those without training or experience (Kwon, 1996; Libby, 1995). However, this research defined the audit professionalism as the auditor could practice that follows the auditing standard and correspond with client or stakeholder expectation in team of professional auditing. Thus, the audit professionalism must have proficiency (skill, knowledge, experience) to operation practice. This study purposes that audit professionalism is positively associated with the consequence variables (audit image and client trustworthiness). Additionally, the effects of antecedent variables including third-party responsibility, audit proficiency completeness and individual ethic adherence on audit professionalism. Both of theories for examine about audit professionalism namely, cognitive theory and resource-based view (RBV).
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Third-party responsibility and audit professionalism
In the case of Enron Corporation as prominent evidence, only months before Enron's bankruptcy filling in December 2001, the firm was widely regard as the 7th largest company in the USA and one of the most innovative, fastest growing and best managed businesses in the country. Based on the report, the downfall of Enron was perpetuated by its key officials who were charged with securities fraud, lying about Enron's financial health through manipulation of publicly reported financial reports filed with the Securities and Exchange Commission (SEC). Enron in its report misstated revenues and earnings and keep hundreds of millions of dollars in debts off its books. With the swift collapse, it raises financial oversight issues and the auditors' ethics is put on the line for the accounting and auditing failures. After that, USA introduced the Sarbanes-Oxley Act in 2002 that influenced changes to the new York stock Exchange Listing Rules. Later, some of initiatives in the USA were stimulated for by the respective regulators and motivation of initiatives in the Asian region by the World Bank and the Organization for Economic Corporation and Development (OECD). These principles identified many elements while transparencies are the one important factor of this opinion. Acknowledging that major collapses turned the spotlight of the world's attention into the profession. In Thailand, developing at responsibility as a legitimating device may be a useful theoretical basis for examining its role in the development of accountancy institutes in emerging economics. However, the responsibility should not emphasis only client but co-operative auditor which is the one kind of audit professional should focus responsibility on community who have relate with organization. Hence, this leads to the hypotheses as follow:
Hypothesis1: The stronger the third-party responsibility, the more likely that it will achieve audit professionalism.
Audit-proficiency completeness and audit professionalism
The current global financial crisis has proved to be a particularly interesting one from the perspective of auditing and accounting profession (Humphrey Loft and Wood; 2009). Both of profession rules and accepted practice affect not just how resource are produced and distributed in an economy, but they affect what is deemed organizationally and socially rational and valuable, and what is deemed to...
Audit professionalism of co-operative auditors in Thailand: effects on audit image and trustworthiness.
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