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The Effects of Ethical Factors in Financial Statement Examination: Ethical Framework of the Input Process Output (IPO) Model in Auditing System Basis

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  • Andi Agus
  • Nurna Aziza

Abstract

This study attempts to analyze ethical factors within the framework of the IPO model (input-process-output) as a proxy of audit quality. In more detail, this study creates a model framework that analyzes the influence of ethical factors consisting of integrity, objectivity and independence on audit quality with specific variables. This study was conducted by analyzing 220 respondents from auditors working in public accounting firms in major cities in Java, Indonesia, and analyzed using linear regression techniques. The study results show that the integrity variable has a positive and significant effect on output, and the objectivity variable has a significant effect on input, process and output. Meanwhile, the independence variable has not been empirically proven to have a significant effect on audit quality. These results emphasize the importance of increasing auditor independence in carrying out their duties, and theoretically prove the effect of abstract ethical factor values in empirical testing on audit quality.

Suggested Citation

  • Andi Agus & Nurna Aziza, 2020. "The Effects of Ethical Factors in Financial Statement Examination: Ethical Framework of the Input Process Output (IPO) Model in Auditing System Basis," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(2), pages 136-145, April.
    • Handle: RePEc:jfr:ijfr11:v:11:y:2020:i:2:p:136-145
    DOI: 10.5430/ijfr.v11n2p136
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    References listed on IDEAS

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    4. Andi Agus & Imam Ghozali, 2019. "Mediating Effect of Audit Quality in Relationship Between Auditor Ethics and Litigation: An Empirical Study," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 91-100.
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