The Effects of Auditor Ethics, Independence, and Time Pressure on Audit Quality, with Professional Skepticism as a Moderating Variable

Ardianta Kamis, September 03, 2026
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FORMOSA NEWS

Auditor Ethics and Independence Boost Public Audit Quality While Time Pressure Threatens Oversight Accuracy

Strict professional ethics and independence among public sector auditors significantly enhance government audit quality, while tight time budget pressure undermines oversight accuracy. This empirical study was conducted by Claudia Handika Pratiwi and Mar'a Elthaf Ilahiyah from Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA) Surabaya and published in the Indonesian Journal of Economic & Management Sciences (IJEMS) in June 2026. The research provides critical insights into how internal professional attributes and external workload pressures affect the ability of regional inspectorates to ensure public financial accountability and prevent corruption.

Background and Governance Context

Public sector auditing plays a crucial role in maintaining public trust, promoting good governance, and ensuring that regional government spending aligns with statutory regulations. In Indonesia, the Regional Inspectorate serves as the Government Internal Supervisory Apparatus (APIP), tasked with providing internal assurance and consulting to prevent administrative errors and financial malfeasance. Although many local governments consistently receive clean financial opinions—such as the Unqualified Opinion (WTP)—allegations of financial misuse and corruption persist.

Internal auditors often face contradictory demands in their daily operations. On one hand, they must uphold high moral standards and complete objectivity without external interference. On the other hand, tight audit schedules and restricted time budgets push auditors to complete comprehensive field examinations quickly. Understanding how these factors interact, alongside professional skepticism, is essential for improving local government oversight mechanisms.

Research Methodology

The researchers from STIESIA Surabaya designed a quantitative explanatory study targeting the Regional Inspectorate of Sukamara Regency in Central Kalimantan. The study examined the direct effects of auditor ethics, independence, and time budget pressure on audit quality, as well as the moderating role of professional skepticism. Key elements of the methodology include:

  • Saturated Sampling: The study targeted the entire population of 75 internal auditors and Regional Government Affairs Supervisors (PPUPD) at the Sukamara Regency Inspectorate. A total of 71 completed questionnaires were successfully processed.
  • Structured Survey Instrument: Primary data was collected through a structured questionnaire using a five-point Likert scale to evaluate individual perceptions of ethical standards, independence, schedule constraints, skeptical attitudes, and audit outcomes.
  • Analytical Modeling: Data was analyzed using Partial Least Square Structural Equation Modeling (PLS-SEM). The model evaluated measurement validity and reliability, statistical variance ($R^2 = 0.765$), and path coefficients to test hypotheses.

Key Research Findings

The empirical analysis by STIESIA Surabaya researchers yielded clear results regarding the determinants of public audit quality:

  • Positive Effect of Ethics: Auditor ethics has a significant positive effect on audit quality (path coefficient 0.380, p-value 0.000). Higher adherence to moral principles, integrity, and confidentiality directly increases audit accuracy.
  • Positive Effect of Independence: Independence exerts a strong positive influence on audit quality (path coefficient 0.244, p-value 0.003). Freedom from political or administrative intervention allows auditors to make objective evaluations.
  • Negative Impact of Time Budget Pressure: Time budget pressure has a significant negative effect on audit quality (path coefficient -0.394, p-value 0.000). Severe time limits force auditors to cut audit procedures, examine evidence less thoroughly, and overlook subtle irregularities.
  • Strengthening Role of Professional Skepticism: Professional skepticism significantly strengthens the positive relationship between ethics and audit quality (p-value 0.036), as well as between independence and audit quality (p-value 0.010).
  • Inability to Neutralize Time Constraints: Professional skepticism does not moderate the negative effect of time budget pressure on audit quality (p-value 0.243). Even highly skeptical auditors cannot overcome the physical constraints imposed by inadequate time allocations.

Real-World Impact and Policy Implications

These findings carry important implications for public sector managers, local government leaders, and audit policymakers. First, regional inspectorates must design realistic audit schedules that give supervisory teams sufficient time to conduct thorough examinations. Reducing time budgets solely to save costs or meet arbitrary deadlines compromises the validity of internal control systems.

Second, local government bodies should invest in continuous ethics training and build organizational safeguards that protect internal auditors from political pressure. Cultivating professional skepticism through advanced fraud detection training allows ethical and independent auditors to deliver higher quality oversight.

Highlighting the balance between personal attributes and structural constraints, the researchers noted the limits of individual skepticism under tight schedules. "Integrity and independence are indispensable foundation stones for government auditors," stated Claudia Handika Pratiwi and Mar'a Elthaf Ilahiyah of STIESIA Surabaya. "However, institutional time constraints severely undermine audit outcomes, because even a critical, skeptical mindset cannot replace the physical time required to evaluate evidence thoroughly."

Author Profiles

  1. Claudia Handika Pratiwi, S.A.: Researcher and accounting graduate from Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA) Surabaya, specializing in public sector auditing, government internal controls, and financial oversight.
  2. Dr. Mar'a Elthaf Ilahiyah, S.E., M.SA., Ak., CA.: Senior lecturer and researcher at Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA) Surabaya, with research expertise in behavioral accounting, professional ethics, and internal audit quality.

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