Predictors of audit quality: A confirmatory study

This study investigated the predictors of audit quality according to registered external auditors in Indonesia. Even though there are improvements in audit reports and practices, there is still some fraud and audit risk that affects the credibility of financial reports. This research is based on a random sample technique where 304 registered external auditors in Indonesia answered self-constructed research instruments and their validity was ascertained with exploratory factor analysis, where they resulted as good. The first-party distributed data were analyzed with multiple regression to determine the predictors of audit quality. The study revealed that internal controls, governance, and audit culture were positively significant predictors of audit quality. Based on this outcome, the Indonesian registered external auditors affirm that the detection, prevention, and correction controls, the systematic rules, practices, and process of directing and controlling a firm, and the values, beliefs, behaviors, and norms of the auditor and the audit firm increase fraud detection, reduce audit risk, and increase the credibility of the audited financial reports. The study recommends further research into the 39.7% excluded predictors of audit quality.