The effect of auditor professional on audit quality: an empirical study of Certified Public Accountants (CPAs) in Thailand.

• Author: Chanawongse, Kasom
• Position: Report - Survey

1. INTRODUCTION

   In the present, a lot of businesses have increasingly complex when the way of each organization are managed and structured, through increasing integration with business partners and service providers (Kennedy and Sorensen, 2006). These business processes have been related to accounting caused an improvement in accounting standard, involved regulation and includes revolution role from the Institute of Certified Accountants and Auditors of Thailand (ICAAT) to the Federation of Accounting Professional under the Royal Patronage of his Majesty the King in October 22, 2004 (Kuasirikun, 2005).

   The concept and process of auditing has become of increasing importance as its career development advantages have become more widely known. Moreover, the past research shows usually understood to be auditor who accept the responsibility to guide, direct and help to manage the careers of other auditors (Kram,1985). Therefore, auditor professional must provide a wide rage of advice and services related to the dynamic of accounting standard in order to establish the high levels of investor confidence are placed on underlying accounting information systems (Silvola, 2008).

   Moreover, auditor professional is important to step back and look at the role of accounting audit to ensure that there is proper application of the audit procedures necessary to enable auditor to express an opinion on the accounts by examining would discover a fraud or defalcation (Hassink, Bollen et al., 2009). Auditor professional is the important for build the accounting data to be creditability and quality (Yen, Fan et al., 2006). The accuracy and quality of auditor professional depends on auditor's judgment such as, selecting the auditing evident, decision making for auditor's report. Thus, auditors who are concerned with the quality of judgment will be the top of audit quality. The audit quality can build information creditability and information quality of financial reporting that also helps users have useful information (Hoffman, Joe et al., 2003). Especially, the opportunity promotes a significant improvement in auditor professional by continuous learning that will strengthen audit quality because the concept of continuous learning has become important which it places priority on noticing, adapting and learning from change.

   Developing models for the effects of auditor professional on audit quality is a challenge as the literature on auditor professional is vast, varied, and evolving. Yet, there was not any systematic testing about effects of auditor professional on audit quality within Thailand and abroad. These have motivated researches to continue to develop improved models with research question.

   The purpose of this study is to test the effect of auditor professional on audit quality. This research has extended from previous research and includes first, auditor professional simultaneously from the accuracy enhancement, stay up to date, taking decisive action, contextual intelligence expression, transparency achievement, promoting objectivity, and responsible attention will help researchers better understanding the scope and the activities associated with auditor professional and allow researchers to test the consequences of auditor professional. Second, this research tests continuous learning which is the moderating effect of the relationship between auditor professional and audit quality. Lastly, offering a validated instrument to measure auditor professional, and by providing empirical evidence of the importance of auditor professional on audit quality.

   This research will offer useful guidance for measuring and implementing auditor professional and facilitate further research in this area. The research question of this work is how does auditor professional affect audit quality via continuous learning as moderator?

   The remaining part of this study is structured as follows: 1) The relevant literature on auditor professional is reviewed. 2) The research method of the study is described, followed by a discussion of the empirical results. 3) The study ends with theoretical and managerial contributions, suggestions for further research, and conclusion.

2. RELEVANT LITERATURE REVIEWS

   [FIGURE 1 OMITTED]

   The research model of this study is illustrated in Fig. 1. It shows that the effect of auditor professional on audit quality via continuous learning as moderator.

   2.1 Effects of the accuracy enhancement

   The accuracy enhancement is also one of the key components of auditor professional that auditors must improve testing methods to optimize their work. Even when requested audit work is traditional in nature, auditors can still apply enhanced techniques, adding great efficiency and accuracy to the audit process. The accuracy enhancement refers to make greater the agreement between an individual's perception of the social structure and some criterion network (Manthou and Vlachopoulou, 2001).

   Therefore, this study defines the meaning of the accuracy enhancement that it is a version that has been improved aligns with generally accepted accounting and tax auditing principles, standards and procedures relating to commercial entities. Due to auditor professional need a much more detailed understanding of detection and prevention of the company's errors and frauds. Auditor professional must use enhanced testing methods to optimize their work. Even when requested audit work is traditional in nature, auditors can still apply enhanced techniques, adding great efficiency and accuracy to the audit process (Hsu and Sakai, 2009).

   Under the assumption that the accuracy enhancement relates positively to audit quality, the evidence shows that auditor's judgment and decision-making on overall system reliability: accuracy, consensus, and the usefulness is the important resource to help auditors gain audit quality (Peecher, Schwartz et al., 2007). Especially, continuous learning is considered as a proposed solution, which helps the auditor can to the accuracy enhancement continuously for achieving better audit quality. Thus, the accuracy enhancement seems to have a positive relationship with audit quality via continuous learning as moderator. Therefore, researcher posits the hypothesis as follows:

   H1a: The higher the accuracy enhancement of auditor professional is the more likely that firms will achieve greater audit quality.

   H2a: Continuous learning will positively moderate the accuracy enhancement of auditor professional to audit quality.

   2.2 Effects of stay up to date

   When changes about generally accepted accounting and tax auditing principles, standards and procedures relating to commercial entities are getting faster and necessary in everyday, these are up to auditor to decide how to reflect them in the financial reporting process. So with this in research, auditor probably wonder how you can stay completely up to date on it all, while still learning about current various rule and regulation (Autore, Billingsley et al., 2009). The fact is, basically in the field of accounting, auditor has to learn and practice at the same time. Stay up to date refers to an advisement providing more up-to-date information than currently known; a change in information, a modification of existing or known data; an additional piece of information or an addition to existing information; and a modification of something to a more recent (Smith and Blanck, 2002).

   Stay up to date is defined as providing quick, efficient, and timely information and data necessary for the support to the activities of auditing and the direction of further development due to information is continuously transmitted over standard interfaces from existing legacy systems. Stay up to date prepares and implements programs for the operational processes of auditor for the needs of development of express an opinion and report on financial statement (Carnegie and Napier, 2010).

   In 2005, FASB revisited the issue and made significant revisions to its guidance on how to treat certain changes. The way of audit process under contingency situation of rule and regulation are intended to contribute to the sustainability of the audit's express an opinion and report on financial statement with up-to-date information on current trends in internal and external audit quality (Elbannan and McKinley, 2006). Moreover, easy to understand reviews keep auditor's up to date with the latest theories and practice in continuous learning and development. Thus, stay up to date seems to have a positive relationship with audit quality via continuous learning as moderator. Therefore, research posits the hypothesis as follows:

   H1b: The higher stay up to date of auditor professional is the more likely that firms will achieve greater audit quality.

   H2b: Continuous learning will positively moderate stay up to date of auditor professional to audit quality.

   2.3 Effects of taking decisive action

   The probability of a financially distressed company would receive a going-concern opinion from a high experience accounting auditor. Auditor's taking decisive action in the presence of going-concern uncertainties are characterized as a two-stage process (Luo, 2005). The first stage is the identification of a potential going-concern problem and the second stage is to determine whether the particular company should receive a qualified going-concern opinion. Taking decisive action refers to conducting successful operations with developing a detailed audit plan and process in order to accomplish auditor's mission.

   Taking decisive action focuses on effectiveness, not just efficiency. Therefore, taking decisive action must be able to implement the policies and procedures of the organization in an effective manner (Drucker, 1967).

   Taking decisive action mean to act positively and decisively to resolve a problem of auditors that should possess personal attributes to enable them to act in accordance with the principles of auditing (Gibbins, McCracken et...