How do Auditor Narcissism and Specialization Affect the Readability of Audit Reports?
DOI:
https://doi.org/10.17977/um004v12i22025p151Keywords:
Audit Report Readability, Auditor Narcissism, Auditor SpecializationAbstract
Purpose: This study aims to examine the influence of narcissism and auditor specialization on the readability of audit reports in State-Owned Enterprises (SOEs) listed on the Indonesia Stock Exchange (IDX) during the 2019–2023 period.
Method: A quantitative approach was applied in this study, with secondary data analysis using a panel regression model. Auditor narcissism was measured using signature size, auditor specialization was measured using the Auditor Industry Specialization (AIS) measure, while audit report readability was analyzed using the FOG index.
Findings: The results show that auditor narcissism positively influences audit report readability, making it easier to read. Conversely, auditor specialization negatively affects readability, suggesting that more expert auditors tend to produce reports that are more difficult to read. This finding supports the basic assumption of behavioral decision theory that psychological and behavioral factors influence individual decisions.
Originality/Value: This study provides implications for investors, company management, and auditors to pay greater attention to the readability aspect of audit reports.
Author Biography
Sri Pujiningsih, Universitas Negeri Malang
orcid.org/0000-0002-7726-355X
SCOPUS ID: 57198428825
Google Scholar: Sri Pujiningsih
Sinta Ristekdikti: Sri Pujiningsih
References
Adhariani, D., & Toit, E. D. (2020). Readability of Sustainability Reports: Evidence from Indonesia. Journal of Accounting in Emerging Economies, 10(4), 621–636. https://doi.org/10.1108/jaee-10-2019-0194.
Amernic, J. H., & Craig, R. J. (2010). Accounting as a Facilitator of Extreme Narcissism. Journal of Business Ethics, 96(1), 79–93. https://doi.org/10.1007/s10551 010 0450 0.
Anjani, E. D., & Priono, H. (2023). Pengaruh Kepribadian Narsisme Akuntan terhadap Praktik Profesi Tidak Etis. Journal of Economic, Business and Accounting (COSTING), 7(1), 947–957. https://doi.org/10.31539/costing.v7i1.6353.
Bloomfield, R. (2008). Discussion of “Annual Report Readability, Current Earnings, and Earnings Persistence”. Journal of Accounting and Economics, 45(2–3), 248–252. https://doi.org/10.1016/j.jacceco.2008.04.002.
Bonner, S. E., & Lewis, B. L. (1990). Determinants of Auditor Expertise. Journal of Accounting Research, 28, 1-20. https://doi.org/10.2307/2491243.
Budiantoro, H., Serena, A., & Tantriningsih, H. A. (2021). Pengaruh Audit Tenure, Ukuran KAP, Spesialisasi Auditor, dan Auditor Switching terhadap Kualitas Audit (Studi Empiris pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Tahun 2017-2019). Journal of Research in Business, Economics, and Education, 3(5), 27-38.
Capalbo, F., Frino, A., Lim, M. Y., Mollica, V., & Palumbo, R. (2018). The Impact of CEO Narcissism on Earnings Management. Abacus, 54(2), 210–226. https://doi.org/10.1111/abac.12116.
Carcello, J. V., & Nagy, A. L. (2004). Audit Firm Tenure and Fraudulent Financial Reporting. AUDITING: A Journal of Practice & Theory, 23(2), 55–69. https://doi.org/10.2308/aud.2004.23.2.55.
Church, B. K., Dai, N. T., Kuang, X., & Liu, X. (2020). The Role of Auditor Narcissism in Auditor‐Client Negotiations: Evidence from China. Contemporary Accounting Research, 37(3), 1756–1787. https://doi.org/10.1111/1911-3846.12565.
Dahy, F. A. (2022). Narcissistic Personality Disorder: An Application of the Psychoanalytic Theory to Charlotte Brontë’s Jane Eyre. International Journal of Applied Linguistics and English Literature, 11(4), 10–19. https://doi.org/10.7575/aiac.ijalel.v.11n.4p.10.
Fakhari, H., & Pitenoei, Y. R. (2017). The Impact of Audit Committee and Its Characteristics on the Company’s Information Environment. Iranian Journal of Management Studies, 10(3), 577-608. https://doi.org/10.22059/ijms.2017.231317.672627.
Hutabarat, J. F. L., & Affandy, D. (2024). Pengaruh Keterbacaan Catatan atas Laporan Keuangan (CALK), Keahlian Komite Audit, dan Audit Tenure terhadap Keterlambatan Laporan Audit pada Sektor Properti (Studi pada Perusahaan Property yang Terdaftar di Bursa Efek Indonesia Tahun 2018 – 2020). Jurnal Multidisiplin West Science, 3(5), 596–610. https://doi.org/10.58812/jmws.v3i05.1153.
Jahja, J., Mohammed, N. F., Lokman, N., & Mohamed, N. (2020). Corporate Governance, Managerial Diversion, and Indonesian State-Owned Enterprises: A Literature Review. International Journal of Financial Research, 11(5), 510-517. https://doi.org/10.5430/ijfr.v11n5p510.
Jayanti, D., & Fatima, E. (2023). The Readability of Key Audit Matters Paragraph in Auditor’s Report: A Study from ASEAN Countries. Media Riset Akuntansi, Auditing & Informasi, 23(2), 257–272. https://doi.org/10.25105/ mraai.v23i2.17113.
Kaszak, S. E., Johnson, E. N., Reckers, P. M. J., & Reinstein, A. (2025). Narcissism Dynamics and Auditor Skepticism. Journal of Business Ethics, 197(1), 99–116. https://doi.org/10.1007/s10551-024-05668-1.
Kholik, M. F. R. R., & Kuntadi, C. (2024). Pengaruh Komite Audit, Spesialisasi Auditor, dan Audit Tenure terhadap Kualitas Audit. Jurnal Ilmiah Ekonomi, Manajemen, Bisnis dan Akuntansi, 1(1), 11–25. https://doi.org/10.61722/jemba.v1i1.49.
Libby, R. (1995). The Role of Knowledge and Memory in Audit Judgment. In R. H. Ashton & A. H. Ashton (Eds.), Judgment and Decision-Making Research in Accounting and Auditing (1st Ed., pp. 176–206). Cambridge University Press. https://doi.org/10.1017/cbo9780511720420.009.
Priandana, A. B., & Prasetyo, N. A. (2023). Pengaruh Tujuan Audit dan Tanggung Jawab Auditor terhadap Kualitas Laporan Keuangan. Neraca: Jurnal Ekonomi, Manajemen dan Akuntansi, 1(4), 65-69. https://doi.org/10.572349/neraca.v1i4.259.
Rajabalizadeh, J., & Schadewitz, H. (2025). Audit Partner Narcissism and Audit Reports Readability: Evidence from Lead and Review Audit Partners. Managerial Auditing Journal, 40(1), 30–65. https://doi.org/10.1108/maj-04-2024-4310.
Raskin, R., & Terry, H. (1988). A Principal-Components Analysis of the Narcissistic Personality Inventory and Further Evidence of Its Construct Validity. Journal of Personality and Social Psychology, 54(5), 890–902. https://doi.org/10.1037/0022 3514.54.5.890.
Rjiba, H., Saadi, S., Boubaker, S., & Ding, X. (2021). Annual Report Readability and the Cost of Equity Capital. Journal of Corporate Finance, 67, 1-70. https://doi.org/10.1016/j.jcorpfin.2021.101902.
Sakti, I. (2018). Analisis Regresi Data Panel Menggunakan Eviews. Modul Eviews, 9, 1-25.
Salehi, M., Dalwai, T., & Arianpoor, A. (2023). The Impact of Narcissism, Self-Confidence, and Auditors’ Characteristics on Audit Report Readability. Arab Gulf Journal of Scientific Research, 41(2), 202–223. https://doi.org/10.1108/agjsr 08 2022-0152.
Salsabila, R., & Erinos, E. (2023). Pengaruh Fee Audit, Audit Tenure, dan Spesialisasi Auditor terhadap Kualitas Audit: Studi Empiris pada Perusahaan Manufaktur di BEI 2017-2021. Jurnal Nuansa Karya Akuntansi, 1(2), 176–185. https://doi.org/10.24036/jnka.v1i2.14.
Suciati, U. L., & Triani, N. N. A. (2019). Pengaruh Audit Tenure, Spesialisasi Auditor, Ukuran Kap dan Workload terhadap Kualitas Audit (Studi Kasus Perusahaan Manufaktur yang Terdaftar di BEI Tahun 2010-2014). Akunesa, 7(2), 1-21.
Syarifah, M. A., & Sebrina, N. (2024). Analisis Dampak Kualitas Laba terhadap Hubungan antara Readability dan Cost of Capital. Jurnal Eksplorasi Akuntansi, 6(2), 625–639. https://doi.org/10.24036/jea.v6i2.1549.
Tahang, M., Sarwoko, H., & Asmanah, S. (2024). Pengaruh Spesialisasi Auditor dan Ukuran K.A.P terhadap Kualitas Audit dengan Komite Audit sebagai Variabel Pemoderasi. Jurnal Lentera Bisnis, 13(2), 644-659. https://doi.org/10.34127/jrlab.v13i2.1093.
Takemura, K. (2021). Behavioral Decision Theory: Psychological and Mathematical Descriptions of Human Choice Behavior. Springer Singapore. https://doi.org/10.1007/978-981-16-5453-4.
Tamborski, M., Brown, R. P., & Chowning, K. (2012). Self-Serving Bias or Simply Serving the Self? Evidence for a Dimensional Approach to Narcissism. Personality and Individual Differences, 52(8), 942–946. https://doi.org/10.1016/j.paid.2012.01.030.
Velte, P. (2018). Does Gender Diversity in the Audit Committee Influence Key Audit Matters’ Readability in the Audit Report? UK Evidence. Corporate Social Responsibility and Environmental Management, 25(5), 748–755. https://doi.org/10.1002/csr.1491.
Velte, P. (2019). Associations Between the Financial and Industry Expertise of Audit Committee Members and Key Audit Matters within Related Audit Reports. Journal of Applied Accounting Research, 21(1), 185–200. https://doi.org/10.1108/jaar 10 2018-0163.
Widiannasti, A. A., & Wahidawati. (2024). Pengaruh Keterbacaan Laporan, Relevansi Nilai, dan Leverage terhadap Biaya Keagenan dengan Cakupan Analis sebagai Variabel Pemoderasi. Jurnal Ilmu dan Riset Akuntansi, 13(4), 1-25.
Wijaya, R. S., & Indrayeni, I. (2021). Pengaruh Narsisme dan Empati dalam Pengambilan Keputusan Etis pada Mahasiswa Akuntansi. Jurnal Ekonomi dan Bisnis Dharma Andalas, 23(1), 150–161. https://doi.org/10.47233/jebd.v23i1.211.
Downloads
Published
How to Cite
Issue
Section
License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
