Abstract:
The aim of this research is analyzing the effect of audit methodology and auditor experience in determining the development of auditors’ understanding about client’s business. This research was conducted because understanding of client’s business is important for auditor in audit procedures since every client has own specific conditions. In this research, the researcher defined audit methodology that categorized into two; Strategic System Audit approach and Transaction-based Audit approach. The researcher analyzed which audit methodology that has more significant effect to auditors’ understanding about client’s business. Besides that, the researcher analyzed the effect of auditor experience to auditors’ understanding about client’s business as well.
Population in this research is external auditors who are working in Public Accounting Firm in Jakarta (source from: www.bpk.go.id). The researcher used purposive sampling. 70 external auditors are taken as the sample size that fulfilled the criteria. The data was collected by using questionnaire as the primary data. The data was analyzed by using Kolmogorov-Smirnov for the normality test, multiple regression technique, and F and T test for the research hypothesis test.
The result demonstrates that SSA approach has more significant effect rather than TBA approach in determining the auditors’ understanding of client’s business and auditor experience has significant effect in determining the auditors’ understanding of client’s business.
