The effect of professional ethics, knowledge of detecting errors, and auditor's experience on materiality level considerations.

Abstract

Purpose: The study aims to determine whether professional ethics, knowledge of detecting errors, and auditor experience affect the consideration of the level of materiality at the East Jakarta Public Accounting Firm (KAP).

Method: This research was conducted as a case study at East Jakarta KAP during March-April 2021. A survey method was employed, distributing 50 questionnaires to 9 KAPs in the East Jakarta area, of which 40 questionnaires were returned, resulting in an 80% response rate.

Findings: The results indicated that professional ethics significantly influence the consideration of materiality level in the East Jakarta Public Accounting Firm, whereas knowledge of detecting errors and auditor experience showed no significant effect on materiality level considerations.

Practical implications: Enhancing professional ethics among auditors may improve materiality decision-making. However, there is a need to improve knowledge and experience in error detection, as they showed no significant impact, highlighting opportunities for professional development and training within KAPs.