International Journal of Advanced Science and Technology

Vol. 29, No. 4, (2020), pp. 2453 - 2459

Love of Money: Independence, Work Experience and Auditor

Performance
Sudarman1*, Grahita Chandrarin2 and Prihat Assih3
Universitas Merdeka Malang, Malang, 65146, East Java, Indonesia
*1
sudarman_aji@yahoo.com, 2grahitac@unmer.ac.id, 3prihat2001@yahoo.com

Abstract
The purpose of this study is to examine the independence and work experience of the
auditor on the auditor's performance by using the love of money as moderating. The study
design uses analytical research. The data in this study were obtained by giving
questionnaires to respondents and secondary data. The research sample of 120
respondents using a census. Research analysis using quantitative descriptive by testing
the hypothesis. The results of the study explained that independence could improve
auditor performance, excellent work experience will be able to improve auditor
performance and love of money to moderate the independence and auditor work
experience.

Keywords: independence, work experience, performance, auditor

1. Introduction
Regulation of the Minister of State Empowerment of Nagara Apparatus Number PER /
05 / M.PAN / 03/2008, regarding audit standards in the Indonesian government to identify
and analyze these problems professionally. The standard is strived to provide complete
and accurate information. Accounting Firm (PAF) is an institution that provides legality
and legal umbrella to carry out activities and gain the trust of clients. Professional public
accountants (SPPA) conduct audits and produce evidence as determined by the
Indonesian Institute of Certified Public Accountants (IICPA). Assignments made by
auditors are required to be more careful and professional; on the other hand, auditors are
individuals who must meet all their needs. If the PAF is an umbrella for the auditor to
understand the auditor's needs, the reciprocity of the auditor will improve his performance
and will last longer, and will contribute positively to the Public Accounting Firm (PAF)
concerned. Thus, meeting the needs of auditors will improve auditor performance, and
their impact will increase auditor job satisfaction.Auditors can carry out audits correctly if
they are equipped with the ability, experience and originality. Originality is more to the
attitude of honesty held by the auditor so that the results and opinions of auditors provide
more value. The value given by the auditor will be used as a guide by the client for
decision making. A favourable decision will have an increasingly satisfying impact on the
client, and even the auditor will also experience satisfaction. Satisfaction is the feeling of
pleasure from the work[1]. The strength of the organization's staff influences employees'
perceptions of workload balance and job satisfaction [2]. Satisfaction is positive[3]. That
satisfaction breaks down the pleasure with the results obtained so that if the increase in
satisfaction is often influenced by independence.
Independence is an independent attitude from the auditor.Independence is a sense of
satisfaction because completing work that is not influenced by other parties. The auditor's
neutral attitude, being honest and independent is a work demand to be better at the results
and the publication of reports to gain trust. Apart from being independent, the auditor
experience is also needed[4]–[6].The auditor's experience is a supporting element in
carrying out work as an auditor, so the more experienced the auditor will be more trusted.
Experience supports work[7]. Experience has meaning for the auditor because the client

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 International Journal of Advanced Science and Technology
Vol. 29, No. 4, (2020), pp. 2453 - 2459

will pay attention to the auditor with experience. The auditor's experience will determine
the amount of fee received. A fee is a form of remuneration received by the auditor for
completing work. However, often the fee becomes an obstacle for the auditor because the
higher the fee received, it will affect the audit with various narratives that cone toward the
love of money.Love of money is a form of auditor love with money, so the love of money
becomes a lousy precedent for auditors. Love of money has an impact on auditors,
especially those who do not have experience mainly male auditors [8]–[10].The
accountant profession is at risk of violating ethics because the accounting profession is
directly involved with the value of the company including money, this is the reason why
something related to money upholds ethics especially the ethics of the accounting
profession. Love of money varies depending on gender, educational background and
ability in resource management, besides a love of money can change the positive
paradigm to negative. Love of money appears as a surrogate role capable of destabilizing
the auditor's professional ethics[11], [12].
Empirical phenomena arising from previous studies with different results, then the
opportunity to do research again, especially love of money to prove the empirical reality
with scientific reality. The research objective is to test the auditor's independence and
auditor's work experience on the auditor's performance by using the love of money as
moderating.

2. Literature Review
2.1. Auditor Performance
Achieving excellent performance is the result of establishing criteria and evaluating
periodically. The auditor's performance is always evaluated to measure how much the
current achievements when compared with the specified standards. A professional auditor
can be judged by their ability to conduct audits according to existing standards. This
professionalism is created because of experience in organizing and motivation in
developing their abilities[13]. Individual performance and organizational performance is
in the same direction [14], [15]. Each organization sets its standards to measure the
performance of each individual. There is a significant influence on the level of individual
performance on organizational performance [15].

2.2. Love of Money

The love of money affects actions and behaviours with negative tendencies, but in
essence, every human being has the same love for money. Although money can be used
universally, the meaning of money itself depends on its users and is seen according to
how they view life[16], [17]. Then formed development or sub of Money Ethical Scale
(MES) named LOMS (Love of Money Scale) which was developed in 2003 based on the
ABC model consisting of affective (tendency), behavioural (habits), and cognitive[8].
Money has a significant impact on one's motivation and work behaviour. Money is a tool
to facilitate positive and negative actions so that with money, everything will become
more coherent. Love of money can strengthen or weaken the independence and work
experience of auditors so that the role of love of money becomes more useful if it plays a
role in improving auditor performance. However, the love of money becomes negative if
the auditor's performance weakens.
H1: Love of money can moderate the independence of auditors and work experience.

2.3. Auditor Independence

Independence is the mental attitude of an auditor where he is required to be honest and
impartial during the conduct of the audit and is positioning himself with his auditee.
Independence is an unbiased and impartial perspective in conducting audit tests,

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 International Journal of Advanced Science and Technology
Vol. 29, No. 4, (2020), pp. 2453 - 2459

evaluations and results[4], [5].Indonesian Accountant Code of Ethics article 1 paragraph 2

states that each member must maintain integrity, objectivity and independence in carrying
out their duties. An auditor who upholds his independence, will not be affected and is not
influenced by various forces that come from outside the auditor in considering the facts
found in the examination. Independence in the appearance of a public accountant is
considered to be damaged if he knows or should know the circumstances or relationships
that might compromise his independence. There are four types of risks can undermine the
independence of public accountants, namely self-interest risk, which occurs when public
accountants receive benefits from client financial involvement. Self-review risk that
occurs when a public accountant carries out an assignment of a belief service that involves
a decision and is made for the benefit of the client or implement. Advocacy risk that
occurs when the actions of public accountants become too closely related to the interests
of clients. Client influence risk that occurs when public accountants have a close and
continuous relationship with clients, including personal relationships that can result in
intimidation or excessive friendliness with clients[18]. Based on this description, the
auditor's independence is an attitude of impartiality to the interests of anyone in auditing
the financial statements made by management.
H2: Auditor independence increases auditor performance

2.4. Auditor's Work Experience

Auditor, who has worked long enough to be an invaluable experience in examining
financial statements. Auditors who have different experiences, will also differ in viewing
and responding to information obtained during the inspection and also in providing
conclusions on the object being examined. The more experience an auditor has, the more
appropriate consideration of the level of materiality in a company's financial statements
experience in auditing makes it easier for an auditor to find out errors in financial
statements and be able to correct them quickly[7].In some states, experience as an auditor
General Accounting Office Auditors (GAO) must meet the requirements of the work
experience category to become a public accountant. In these states, if a person passes the
public accountant exam and meets the requirements of having experience as a GAO
auditor, the auditor is allowed to hold a public accountant certificate [19]. As a
professional accountant must undergo sufficient training. The training aims to improve
the professionalism of an auditor. Training activities such as seminars that are held
regularly can increase the professionalism of an auditor. Also, directives from directors or
seniors in organizations improve the performance of newly joined individuals. The
adjustment process with junior auditors for audit work needs to be developed on an
ongoing basis [7].
H3: auditor experience improves auditor performance.

2.5. Previous Research

Auditor performance is influenced by work experience, where the better the auditor's
work experience, the performance will improve [20]. Love of money which can influence
auditor performance[21]. Performance of auditors that are parsed using auditor work
experience[22]. Auditor independence can improve auditor performance[23].

2.6. Research Framework

The conceptual framework of this study is illustrated in Figure 1.

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Copyright ⓒ 2020 SERSC
 International Journal of Advanced Science and Technology
Vol. 29, No. 4, (2020), pp. 2453 - 2459

Figure 1. Research Framework

3. Methodology
This study uses quantitative research that is used to test specific samples. Data
collection using research instruments, quantitative/statistical data analysis, to test the
hypothesis that has been set [24].The research sample is the auditor who has a
professional certificate which amounts to 120 respondents. Research data using primary
data in the form of questionnaires. Use instrument testing to ensure data validity and
reliability, as well as data analysis using Moderating Regression Analysis (MRA).

4.Results and Discussion

4.1. Test Instrument
This study analyzes two exogenous variables, namely auditor independence and auditor
work experience, and one control variable, namely love of money. The total number of
instruments/questionnaire items was 44 items. Test the validity and reliability of the
requirements in this study before analyzing the description. The value of r table with an
error rate (α = 5%) and the number of respondents as many as 120 is 0.177. The test
results of the instrument produced 44 questions with valid categories.The reliability test
results of the research instruments showed that all Alpha Cronbach values generated by
each research variable had exceeded the required 0.6. This comparison proves that the
instruments used are reliable, meaning that the respondents proved to be consistent in
answering the research instruments/questionnaires. The following results from the
reliability estimation of the instrument used.

Table 1. Instrument reliability estimation results

No. Variable Cronbach Cut-off Information
Alpha Value
1 Auditor Independence 0.8298 > 0.6 Reliable
2 Auditor Work Experience 0.8917 > 0.6 Reliable
3 Auditor Performance 0.8475 > 0.6 Reliable
4 Love of Money 0.7415 > 0.6 Reliable

4.2 Moderating Regression Analysis

After conducting the instrument test, the study continued to test the moderating
variable love of money. For more details, it can be seen in Table 2.

Table 2. MRA Test Results

Model B Std. Error Beta t Sig.
1 (Constant) 0.597 3.598 1.044 0.965
Independence 0.452 0.240 2.815 0.017
Experience 0.221 0.198 2.101 0.003
Moderating 0.126 0.396 2.692 0.020

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 International Journal of Advanced Science and Technology
Vol. 29, No. 4, (2020), pp. 2453 - 2459

a. Dependent Variable: Auditor performance

Table 2 explains that moderating variables can strengthen but can also weaken the
independent and dependent variables. Statistical test results explain that the moderating
value is positive t count 2.692 with a significant value of 0.020. love of money is
measured by using an indicator that the auditor gets a guarantee from the client, the
auditor has ownership rights over the results found, and the auditor has power, where the
auditor's role as the holder of the rights to the findings in the field becomes the main
priority. The results cannot be influenced by the client. The moderate test results are
positive from the value of the regression coefficient of 0.396, meaning that if the love of
money is increased by one unit (0.396), then the performance will also increase by 0.396,
so the results of the study answer the first hypothesis supported.Auditor independence
with a regression coefficient of 0.240 is positive, so if independence is increased by
0.240, then the auditor's performance will increase by 0.240. the t count is 2,815 with a
significance value of 0.017. This proves that the independence of auditors by using old
indicators dealing with clients, auditors often get pressure from clients, friends of auditors
often examine work and auditors get non-audit services. Auditor independence has a
significant positive effect on improving auditor performance, so empirically supporting
hypothesis second.Work experience with a positive regression coefficient value of 0.421,
which means that if the auditor's work experience is getting better, the auditor's
performance is also getting better. The results are empirically proven with a t value of
2.101 and a significance value of 0.003, which means that if work experience increases,
the auditor's performance will increase, therefore the third hypothesis is supported.
Love of money can moderate the independence of auditors and work experience. Love
of money is a love of money, and it is a human factor, especially men. Love of money is
more to the value obtained from the work process and is completed or not adequately
resolved. The negative impact of the love of money, especially for auditors, is that the
results and findings in the field are not independent. This is due to the role of money in
influencing findings at the time of the audit. The positive impact is that auditors are more
authoritative because their work is valued by commensurate money.The results of the
study explained that the influential role of love of money contributes to improving auditor
performance which is explained by auditor independence. Auditor independence is an
independent attitude that cannot be influenced by clients. Love of money can be a
moderating factor[21].
Auditor independence can improve auditor performance. Independence is the auditor's
independent attitude in carrying out audit tasks. Independence has the meaning of not
being influenced by anyone, so the audit results will be able to be of value to the client.
The results of the study explain that auditor independence provides value for auditor
performance. Auditor independence is clarified by old statements relating to clients,
pressure from clients, auditor friends reviewing audit results and non-audit services turned
out to be able to contribute to auditor performance, which in this case is the auditor's
ability to complete tasks, motivation to provide much information, support the
implementation of tasks, job availability and client relationships.Auditor performance
increases if the auditor independence projection usually goes [23], [25]. Competence and
independence influence the quality of audits conducted[26].
The auditor's work experience can improve the auditor's performance. The auditor's
work experience is more on the auditor's ability to conduct audits for clients. Work
experience provides stability for audits and clients, because of the higher work
experience, the performance also increases. Work experience as measured using
structured workload, expertise, soft skills, client interests is not made explicit and
consistent as an advisor. Auditor's experience is getting better; the auditor's performance
will also be better[22]. The more experience an auditor has, the more it can generate fraud

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 International Journal of Advanced Science and Technology
Vol. 29, No. 4, (2020), pp. 2453 - 2459

quickly. An auditor's background causes them to see and respond to an object in different
ways, such as in responding to information and concluding a case. [27]. Formulates that
inexperienced and professional auditors influence job satisfaction[23].

5. Conclusion
Auditor independence contributes to improving auditor performance. This is due to the
attitude of auditor independence needed so that the audit results are optimal. The auditor's
experience contributes to improving the auditor's performance so that the auditor's
experience makes the work more coherent compared to the inexperienced auditor. Love of
money can be a moderation between auditor independence and auditor experience. This
proves that the love of money strengthens the auditor's performance because the role of
love of money becomes the impact of the audit work provided by the client.

Acknowledgements
The researchers expressed their gratitude to the Universitas Merdeka Malang for their
support until this research was completed.

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