PREMATURE SIGN-OFF AUDIT PROCEDURES

in the recent case of an audit on the company, as Enron, WorldCom in the USA (Duska and Brenda, 2003) Kimia Farma and closure of Public Accounting Firm in Indonesia (www.bapepamlk.depkeu.go.id) becomes an great issue for the public accounting profession and formidable challenge to improve the image of the audit profession in providing quality audits. A good of Quality Audit in principle can be achieved if auditors apply the standards and principles of auditing, behaving freely without impartial (Independent), obedient to the law and comply with professional codes of ethics. Reduction of audit quality is defined implementation of audit quality reduction is done deliberately by the auditor (Coram, et al, 2004). Kane and Velury (2005), defines quality audit as the capacity of the external auditors to detect materiality and irregularities form. Russell (2000), mentions that quality audit is a function of quality assurance which will be used to compare actual conditions with which they should. Reduction of Quality Audit behavior or Reduced Audit Quality is an action taken by the auditors during contract in which these perform can reduce the accuracy and effectiveness audit evidence collection (Malone and Robers, 1996). This behavior can occur because there is a dilemma between the costs inherent in the audit process and quality, the faced by auditors in the audit environment (Kaplan, 1995). On one hand, the auditor must meet the Professional Standards to achieve a high level of audit quality that can be achieved by performing the audit procedures. But on the other hand, auditors face cost barriers that make to degrade the quality of audits. In addition, barriers of time may be one factor leading to lower quality audit, due to the limited time the auditor is required to complete all audit procedures, it affects the auditor's actions are intentionally not doing all the existing audit procedures. Various studies with respect to the quality of audits have been conducted among others researcher. Kelly and Margheim (1990), mentions that the decline in audit quality is the result of pressure. Otley and Pierce (1995), explains that some auditors dysfunctional behaviors such as Premature Sign-Off Audit Procedures are a few behaviors that tend to lead to problems behaviors as auditors, which will affect the quality loss audit and trends of lowering public confidence in the accounting profession and eventually kill the profession itself. Debate Stock Exchange Commission (SEC) in the discussion of Effectiveness Audit, has been established by the American Institute of Certified Public Accountants (AICPA) has recommended that the dysfunctional Behavior is a problem that requires sustained attention (Public Oversight Board, 2000). The survey has been conducted on senior auditor of the Big Six in Ireland have confirmed that 89% involved with some form of behavior lowers the quality of audits in Premature Sign-Off Audit Procedures, while 12% were participating in the under reporting of Time and more other (Otley and Pierce, 1995). This condition would require attention by the practitioners and institutions in the implementation audit, the auditor can maintain the quality of her work. Studies Cohen Commission (1978), Rhoden (1978), Alderman and Deitrick (1982), and Raghunathan (1991) detect the reasons why auditors perform premature sign-off of audit procedures, auditing of the limited period of time specified, the perception of audit procedures performed not important (low risk), no material audit procedures, audit procedures that are less understood, the audit report submission deadline, as well as the influence of auditors' boredom. Heriningsih (2002) found a significant relationship between time pressure and audit risk of premature sign-off of audit procedures. However, this study can not prove that the level of materiality may be associated with premature termination of audit procedures. The survey, conducted by Conram, et.al., (2000), against 106 senior auditor general explained that the budget time pressures providing the greatest influence on the behavior of reduced quality audit and associated with audit risk. The results explained that under conditions of low level of audit risk of error associated with an increase in audit quality reduction acts as a whole. Otley and Pierce (1996), explaining that managers tend to perform reduced quality audit compared to increase the budget time. However, different results presented by Houston (1999), that senior audit time budget less influence on the risk of the client in terms of audit fee pressure. Malone and Roberts (1996), found no relationship between the level of time budget pressures and a decrease in audit quality. Auditors are often confronted by the presence of time pressure. Time pressure consists of time budget pressure and time deadline pressure. When the time budget that has been specified could be achieved, it will not cause conflicts, so the possibility of dysfunctional behaviors will not be done. Previous studies showed significant association of time pressure in explaining dysfunctional behaviors (Kelley and Margheim, 1990; Carcello et al, 1996; Otley and Pierce, 1996a; Willett and Page, 1996; Pierce and Sweeney, 2004; McNamara et al , 2005). In these studies the time pressure operationalized as the attainment of time budget (time budget attainability). The existence of time pressure causes a person is required to complete a job soon and if it is not achieved it will lead to conflict because of the time allowed for an elapsed and the quality of audit work may be interrupted and it will lead to dysfunctional behaviors. Previous research on time pressure associated with dysfunctional behavior has been done by Pierce and Sweeney (2004) and Kelley et al, (1999), DeZoort and Lord (1997), (Eden, 1982) and the results showed there is a significant relationship. Weningtyas et.al, (2006) found evidence of a significant relationship between time pressure, risk audits, materiality and review procedures and quality control of the termination of audit procedures. The results of the study Weningtyas et.al., proved that the time pressure and audit risk associated positively with cessation of auditing procedures, so the greater the time pressure and audit risk faced by auditors, the greater the tendency of auditors to conduct audits termination procedures. While materiality and reviews procedure and quality control is negatively related to the termination behavior of audit procedures, so that the lower the materiality and review procedures and quality control the behavior of the lower termination of audit procedures. This study was motivated by Conram et.al., (2000), Heriningsih (2002) and Suryanita, et.al, (2007). Previous studies testing the audit procedures that are often stopped by the auditors and examine the relationship between time pressure, audit risk, materiality and reviews procedure and quality control have an impact on the decision to conduct an audit procedure termination. These studies there are inconsistencies between study results Herningsih (2002) and Suryanita et.al., (2006) in assessing the relationship between the materiality of the termination of audit procedures. Herningsih (2002) found no significant relationship between the materiality of the termination of audit procedures, while Suryanita et.al., (2006) could prove the relationship. This research can be assured the results of previous studies on the relationship between the materiality of the termination of audit procedures. This study refers to termination of audit procedures above. This study involves the auditor respondents who worked in Semarang. Semarang as it is one big cities in Indonesia and has quite a lot of public accounting firm so it is quite representative for this study, and to find out how much time pressure faced by auditors in Semarang effect on performance, because thera a various result of time pressure that faced by auditors in different regions (Suryanita et al, 2007). The difference with previous studies (Conram et al, 2003), is that previous studies using samples of students at the Advanced Audit Module of the Professional Year (PY) at the Institute of Chartered Accountants in Australia (ICAA) was identified as a senior audit as the object of research , while this study will use the Public Accounting Firm. The object of this study is the auditor who worked in Public Accounting Firm in Semarang by taking samples of CPA in Semarang. According to Chengbroyan and Soobaroyen (2005) found that Time budget pressure in developing countries is much smaller when compared with developed countries. Soobaroyen and Chengbroyan (2005) also found that the higher the level of budget tightening the practice of premature discontinuation of audit procedures increases as well. Study Herningsih found that 56% respondents perform audit procedures whereas discontinuation of Suryanita showed only 13% of respondents who perform audit procedures premature termination.