The Influence of Auditor Competence on Audit Qualit y with Auditor Independence as a Moderating Variable

Abstract

Recurring accounting scandals have raised public concern about audit quality, while prior studies report inconsistent findings on the roles of auditor competence and independence. Drawing on Agency Theory, this study examines the effect of Auditor Competence on Audit Quality, with Auditor Independence as a moderating variable, and also tests the effect of Auditor Competence on Auditor Independence. We used a quantitative approach with Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS. We collected data through an online questionnaire from 100 purposively selected auditors working in the Big Four accounting firms (PwC, Deloitte, EY, and KPMG) in the Jabodetabek area. All constructs met the required validity and reliability criteria. The results show that Auditor Competence does not significantly affect Auditor Independence. Auditor Competence and Auditor Independence each have a positive and significant effect on Audit Quality. However, the interaction between Auditor Competence and Auditor Independence is not significant, indicating that Auditor Independence does not moderate the relationship between Auditor Competence and Audit Quality. This study contributes to the auditing literature by distinguishing the direct role of Auditor Independence from its proposed moderating role in the competence–audit quality relationship. Future research should compare Big Four and non-Big Four firms, use probability sampling and longitudinal designs, and consider alternative moderators such as professional ethics, professional skepticism, and client pressure.