Theoritical Framework of Premature Sign-off Audit

Attribution Theory  

Attribution theory will provide an explanation of how to determine the cause or motive of the person's behavior. This theory was directed to develop an explanation of the ways we judge people differently, depending on the meaning of what we associate to a particular behavior. This theory refers to how one explains the causes of the behavior of others or himself (Luthans, 1998), which determined whether from internal or external (Robert, 1996) it will show its effect on individuals. 

The cause of this behavior in social perception, better known as disspositional attributions (internal causes), and situational attributions (external causes) (Robert, 1996). Internal causes tend to refer to aspects of individual behavior, something that has existed in a person such as a personal trait, self-perception, ability and motivation. While external causes more referring to the environment that affect a person's behavior, such as social conditions, social values, public opinion as well as contextual factors audits (audit risk, Materiality and reviews procedures and quality control). 

Based on the above it can be concluded that attribution theory can be used as a basis for finding such factors as contextual factors audit (audit risk, Materiality and reviews procedures and quality control) cause why the auditors did sign off prematurely. By knowing the factors that cause an auditor to sign off prematurely, then the trigger factors of premature sign-off can be minimized, so that the auditor wishes to make a premature sign-off can be reduced. 

Inverted U Theory 

Inverted U theory is the most widely used model to explain the relationship between pressure and performance. According to Robbins (2006), the logic underlying the theory of an inverted U (Figure 2.1) that the stress at low to moderate levels stimulates the body and improve ability to react. In this condition the individual is usually able to do the job better, more intensive or faster. But if too much stress will place demands that can not be achieved or someone constraints, resulting in decreased performance. While stress is defined as a condition in which individuals face the opportunities, constraints (constrains), or demands (demands) associated with what is really wanted and the results are perceived as something that is uncertain but important (Robbins, 2006). 

Model of the inverted U theory also describes the reaction to stress from time to time and to changes in stress intensity. Theoretical model of an inverted U got a lot of criticism from researchers such as Otley and Pierce (1996), which found no evidence of an inverted U curve relationship; Kelley and Margheim (1990), which examines the relationship between time budget pressure by dysfunctional behavior auditors found no significant results statistically to support the inverted U theory. Likewise, the results of research conducted by Pierce and Sweeney (2004), who found a linear relationship between time budget pressure and dysfunctional behaviors. Robbins (2006), also mentioned that this model does not get much support empirically. Linear relationship is the basis of this research in linking between work pressure and the risk of error the auditor. 

Research in psychology conducted by Djatmiko (2007), mentions that the relationship between stress and performance is not a linear but rather an inverted U curve, this is due to the body's physiological response to stress conditions would interfere with an individual's performance. Distress at each level will cause performance degradation, so that optimal performance is achieved at the individual precisely the highest stress levels. In this study the relationship between pressure and quality of performance is linear, where the rate of premature sign-off will occur at the time the budget pressures the lowest and highest. 

Reduced Audit Quality

As professionals, auditors are required to use his professional skills with a meticulous and thorough in carrying out the audit (IAI, 2001, section 230.01). The use of professional skills with careful and thorough skepticism requires the auditor to carry out their professional and must disclose in reasonable condition of the company being audited based on an evaluation of the evidence obtained during the course of auditing. In an effort to obtain sufficient competent audit evidence, then prior to conducting an audit of KAP is required to create and develop an audit program in writing. The audit program is a collection of audit procedures to be implemented during the audit process. 

 The existence of audit quality reduction behavior (RKA) is also called "irregular auditing practice" (Willett and Page, 1996) in the auditing literature is evidence that the implementation of audit procedures in accordance with the audit program is not always implemented the auditor. RKA behavior is defined "as the actions undertaken auditor during the audit assignment which reduces the effectiveness of audit evidence collected" (Malone and Robert, 1996, p. 49). Thus the evidence gathered during the audit is unreliable, wrong or inadequate in quality and quantity (Herrbach, 2001). The evidence is not quite as competent and reasonable basis for the auditor in detecting errors and irregularities are adrift on the audited financial statements. 

RKA behavior is a serious problem, because they reduce the quality of audits directly (Otley and Pierce, 1996a; McNair, 1991). As stated by McNair (1991, p. 642): 

This type of behavior, namely a failure to exercise due care, can in the extreme undermine the integrity of the audit process. The inability to monitor true effort is perhaps the most critical exposure, or danger, faced by an audit management held accountable for audit integrity by the public.

Studies of the behavior of earlier RKA mainly focused on one type of behavior that is considered the most serious RKA is premature discontinuation of audit procedures (premature sign-off) [eg. Alderman and Deitrick, 1982; Margheim and Company, 1986; Raghunathan, 1991 ]. Premature termination of the audit procedure is an act performed by the auditor does not implement or ignore one or more of the required audit procedures, but the auditor documenting all audit procedures have been completed in full (Alderman and Deitrick, 1982; Raghunathan, 1991). 

Rhode (1978) results in Alderman and Deitrick (1982) showed the majority (nearly 60 percent) of respondents admitted they sometimes make premature termination of audit procedures. The results of subsequent studies conducted Alderman and Deitrick (1982) and Raghunathan (1991) confirm these findings. 

Findings of subsequent studies conducted by Kelley and Margheim (1990), Malone and Robert (1996), Otley and Pierce (1996a), Herrbach (2001) and Pierce and Sweeney (2004) shows in addition to premature termination of the audit procedures, various forms of other actions performed auditors in the implementation of audit programs that could potentially reduce the quality of audits.