THE IMPLEMENTATION OF INDEPENDENCE AND CLIENT ACCEPTANCE OF QUALITY CONTROL IN PUBLIC ACCOUNTING FIRM XYZ (CASE STUDY)

Abstract

Quality control in public accounting firm is very important to maintain the public accounting firm to run according with the guidelines determined by International standard and adopted by Indonesian standard. However, every public accounting firm has their own quality control system. This research was conducted due to the determinants of quality control in public accounting firm XYZ. This research is made to analyze how firm XYZ make sure the independence of the personnel and identify the criteria of client in firm XYZ. This study is expected to motivate the firm to increase and develop their quality control in the future. This research is using qualitative research methods and one of public accounting firm in Indonesia as the key informant. The key informant is named public accounting firm XYZ due to the confidential and reputation of the firm. In conclusion, the researcher identified that the firm XYZ cannot 100% sure about the independence of the personnel and only lean on the confirmation form of independence that updated every year. This may cause the audited financial report can’t be trusted if the auditor has special relationship with the client. There are no specifics criteria for the client acceptance. Firm XYZ thought all clients are unique and have their own complexity. If the firm doesn’t set specific criteria and during the audit engagement, there is information about the client’s integrity problem, then firm should pull out and stop the engagement. Public accounting firm XYZ should communicate more with the personnel about independency through in-house seminars or giving a reward for personnel who caught other personnel violating the independency. For the client acceptance, auditor must set criteria for the client before accepting them and obtain information about the client’s integrity.