REVENUE RECOGNITION ERROR DETECTION LINKS AUDITOR ATTRIBUTES AND PSAK 115 UNDERSTANDING TO AUDIT EFFECTIVENESS
Keywords:
Audit Effectiveness; Auditor Attributes; Error Detection Capability; PSAK 115; Revenue Recognition.
Abstract
This study examines whether revenue recognition error detection capability transmits the effects of auditor attributes and PSAK 115 understanding to audit effectiveness. A quantitative explanatory survey was administered to the accessible population of 120 auditors working at public accounting firms in Medan, Indonesia. Ninety-three questionnaires were returned; one incomplete response was excluded, leaving 92 usable observations. The purified instrument contained 39 reflective indicators measured on a five-point Likert scale. Partial least squares structural equation modeling used a Mode A path-weighting algorithm and 5,000 bootstrap resamples. Auditor attributes and PSAK 115 understanding positively affected error detection capability. Auditor attributes and error detection capability positively affected audit effectiveness, whereas the direct effect of PSAK 115 understanding was not significant. Error detection provided complementary partial mediation for auditor attributes and indirect-only mediation for PSAK 115 understanding. The model explained 78.2% of audit effectiveness.Audit firms should integrate PSAK 115 case-based training with professional skepticism, industry exposure, and contract-testing exercises.The study identifies error detection as the proximal mechanism through which general and standard-specific auditor human capital becomes effective audit performance
References
Agustina, F., Nurkholis, N., & Rusydi, M. (2021). Auditors' professional skepticism and fraud detection. International Journal of Research in Business and Social Science, 10(4), 275–287. https://doi.org/10.20525/ijrbs.v10i4.1214
Balsam, S., Krishnan, J., & Yang, J. S. (2003). Auditor industry specialization and earnings quality. Auditing: A Journal of Practice & Theory, 22(2), 71–97. https://doi.org/10.2308/aud.2003.22.2.71
Becker, G. S. (1993). Human capital: A theoretical and empirical analysis, with special reference to education (3rd ed.). University of Chicago Press.
Chen, J. (2025). The impact of IFRS 15 on revenue and earnings quality: Evidence from China. Asian Review of Accounting, 33(3), 523–546. https://doi.org/10.1108/ARA-07-2024-0220
Cohen, J. (1988). Statistical power analysis for the behavioral sciences (2nd ed.). Lawrence Erlbaum Associates.
Cosmulese, C. G., Grosu, V., & Zhavoronok, A. (2023). Analyzing the external auditor's perception of the impact of IFRS 15 on the profitability and performance of emerging market companies. Accounting and Financial Control, 4(1), 73–84. https://doi.org/10.21511/afc.04(1).2023.07
DeAngelo, L. E. (1981). Auditor size and audit quality. Journal of Accounting and Economics, 3(3), 183–199. https://doi.org/10.1016/0165-4101(81)90002-1
DeFond, M., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2–3), 275–326. https://doi.org/10.1016/j.jacceco.2014.09.002
DeFond, M., Li, Z., Wong, T. J., & Wu, K. (2024). Competence vs. independence: Auditors' connections with members of their clients' business community. Journal of Accounting and Economics, 78(1), Article 101702. https://doi.org/10.1016/j.jacceco.2024.101702
Dekeyser, S., He, X., Xiao, T., & Zuo, L. (2024). Auditor industry range and audit quality. Journal of Accounting and Economics, 77(2–3), Article 101669. https://doi.org/10.1016/j.jacceco.2023.101669
Ferdous, L. T., Bhuiyan, F., Liu, J., & Rana, T. (2026). Auditor attributes and audit effectiveness through the lens of accounting errors: Evidence from Australia. Journal of International Accounting, Auditing and Taxation, 61, Article 100780. https://doi.org/10.1016/j.intaccaudtax.2026.100780
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). Sage.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8
Hurtt, R. K. (2010). Development of a scale to measure professional skepticism. Auditing: A Journal of Practice & Theory, 29(1), 149–171. https://doi.org/10.2308/aud.2010.29.1.149
Ikatan Akuntan Indonesia (Indonesian Institute of Accountants). (2024). Changes in PSAK and ISAK numbering within Indonesian financial accounting standards (SAK). https://web.iaiglobal.or.id/assets/files/file_publikasi/Komparasi%20Perubahan%20Penomoran%20PSAK%20ISAK%20SAK%20Indonesia_FINAL.pdf
IFRS Foundation. (2024). IFRS 15 revenue from contracts with customers. https://www.ifrs.org/issued-standards/list-of-standards/ifrs-15-revenue-from-contracts-with-customers/
Kabir, H., & Su, L. (2022). How did IFRS 15 affect the revenue recognition practices and financial statements of firms? Evidence from Australia and New Zealand. Journal of International Accounting, Auditing and Taxation, 49, Article 100507. https://doi.org/10.1016/j.intaccaudtax.2022.100507
Karim, M. R., & Riya, A. I. (2022). Compliance of disclosure requirements of IFRS 15: An empirical evidence from developing economy. International Journal of Disclosure and Governance, 19(3), 301–312. https://doi.org/10.1057/s41310-022-00146-4
Khulsum, U., Suryanto, T., Ali, J., & Wardana, H. Y. (2025). Breaking barriers in audit quality: The dynamic interactions of competence, time budget pressure, complexity, and motivation in Indonesia landscape. Social Sciences & Humanities Open, 12, Article 101905. https://doi.org/10.1016/j.ssaho.2025.101905
Kock, N. (2015). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of e-Collaboration, 11(4), 1–10. https://doi.org/10.4018/ijec.2015100101
Kohler, H., Pochet, C., & Le Manh, A. (2021). Auditors as intermediaries in the endogenization of an accounting standard: The case of IFRS 15 within telecom. Accounting, Organizations and Society, 91, Article 101227. https://doi.org/10.1016/j.aos.2021.101227
Lee, W. J., & Choi, S. U. (2024). The effect of the new revenue recognition principle (IFRS 15) on financial statement comparability: Evidence from Korea. Journal of International Accounting, Auditing and Taxation, 54, Article 100601. https://doi.org/10.1016/j.intaccaudtax.2024.100601
Napier, C. J., & Stadler, C. (2020). The real effects of a new accounting standard: The case of IFRS 15 revenue from contracts with customers. Accounting and Business Research, 50(5), 474–503. https://doi.org/10.1080/00014788.2020.1770933
Noch, M. Y., Ibrahim, M. B. H., Akbar, M. A., Kartim, & Sutisman, E. (2022). Independence and competence on audit fraud detection: Role of professional skepticism as moderating. Jurnal Akuntansi, 26(1), 161–175. https://doi.org/10.24912/ja.v26i1.823
Onie, S., Ma, L., Spiropoulos, H., & Wells, P. (2023). An evaluation of the impacts of the adoption of IFRS 15 revenue from contracts with customers. Accounting & Finance, 63(S1), 953–973. https://doi.org/10.1111/acfi.12978
Saptono, P. B., & Khozen, I. (2021). Tax administration issues on revenue recognition after IFRS 15 adoption in Indonesia. Jurnal Borneo Administrator, 17(2), 169–182. https://doi.org/10.24258/jba.v17i2.877
Balsam, S., Krishnan, J., & Yang, J. S. (2003). Auditor industry specialization and earnings quality. Auditing: A Journal of Practice & Theory, 22(2), 71–97. https://doi.org/10.2308/aud.2003.22.2.71
Becker, G. S. (1993). Human capital: A theoretical and empirical analysis, with special reference to education (3rd ed.). University of Chicago Press.
Chen, J. (2025). The impact of IFRS 15 on revenue and earnings quality: Evidence from China. Asian Review of Accounting, 33(3), 523–546. https://doi.org/10.1108/ARA-07-2024-0220
Cohen, J. (1988). Statistical power analysis for the behavioral sciences (2nd ed.). Lawrence Erlbaum Associates.
Cosmulese, C. G., Grosu, V., & Zhavoronok, A. (2023). Analyzing the external auditor's perception of the impact of IFRS 15 on the profitability and performance of emerging market companies. Accounting and Financial Control, 4(1), 73–84. https://doi.org/10.21511/afc.04(1).2023.07
DeAngelo, L. E. (1981). Auditor size and audit quality. Journal of Accounting and Economics, 3(3), 183–199. https://doi.org/10.1016/0165-4101(81)90002-1
DeFond, M., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2–3), 275–326. https://doi.org/10.1016/j.jacceco.2014.09.002
DeFond, M., Li, Z., Wong, T. J., & Wu, K. (2024). Competence vs. independence: Auditors' connections with members of their clients' business community. Journal of Accounting and Economics, 78(1), Article 101702. https://doi.org/10.1016/j.jacceco.2024.101702
Dekeyser, S., He, X., Xiao, T., & Zuo, L. (2024). Auditor industry range and audit quality. Journal of Accounting and Economics, 77(2–3), Article 101669. https://doi.org/10.1016/j.jacceco.2023.101669
Ferdous, L. T., Bhuiyan, F., Liu, J., & Rana, T. (2026). Auditor attributes and audit effectiveness through the lens of accounting errors: Evidence from Australia. Journal of International Accounting, Auditing and Taxation, 61, Article 100780. https://doi.org/10.1016/j.intaccaudtax.2026.100780
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). Sage.
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/s11747-014-0403-8
Hurtt, R. K. (2010). Development of a scale to measure professional skepticism. Auditing: A Journal of Practice & Theory, 29(1), 149–171. https://doi.org/10.2308/aud.2010.29.1.149
Ikatan Akuntan Indonesia (Indonesian Institute of Accountants). (2024). Changes in PSAK and ISAK numbering within Indonesian financial accounting standards (SAK). https://web.iaiglobal.or.id/assets/files/file_publikasi/Komparasi%20Perubahan%20Penomoran%20PSAK%20ISAK%20SAK%20Indonesia_FINAL.pdf
IFRS Foundation. (2024). IFRS 15 revenue from contracts with customers. https://www.ifrs.org/issued-standards/list-of-standards/ifrs-15-revenue-from-contracts-with-customers/
Kabir, H., & Su, L. (2022). How did IFRS 15 affect the revenue recognition practices and financial statements of firms? Evidence from Australia and New Zealand. Journal of International Accounting, Auditing and Taxation, 49, Article 100507. https://doi.org/10.1016/j.intaccaudtax.2022.100507
Karim, M. R., & Riya, A. I. (2022). Compliance of disclosure requirements of IFRS 15: An empirical evidence from developing economy. International Journal of Disclosure and Governance, 19(3), 301–312. https://doi.org/10.1057/s41310-022-00146-4
Khulsum, U., Suryanto, T., Ali, J., & Wardana, H. Y. (2025). Breaking barriers in audit quality: The dynamic interactions of competence, time budget pressure, complexity, and motivation in Indonesia landscape. Social Sciences & Humanities Open, 12, Article 101905. https://doi.org/10.1016/j.ssaho.2025.101905
Kock, N. (2015). Common method bias in PLS-SEM: A full collinearity assessment approach. International Journal of e-Collaboration, 11(4), 1–10. https://doi.org/10.4018/ijec.2015100101
Kohler, H., Pochet, C., & Le Manh, A. (2021). Auditors as intermediaries in the endogenization of an accounting standard: The case of IFRS 15 within telecom. Accounting, Organizations and Society, 91, Article 101227. https://doi.org/10.1016/j.aos.2021.101227
Lee, W. J., & Choi, S. U. (2024). The effect of the new revenue recognition principle (IFRS 15) on financial statement comparability: Evidence from Korea. Journal of International Accounting, Auditing and Taxation, 54, Article 100601. https://doi.org/10.1016/j.intaccaudtax.2024.100601
Napier, C. J., & Stadler, C. (2020). The real effects of a new accounting standard: The case of IFRS 15 revenue from contracts with customers. Accounting and Business Research, 50(5), 474–503. https://doi.org/10.1080/00014788.2020.1770933
Noch, M. Y., Ibrahim, M. B. H., Akbar, M. A., Kartim, & Sutisman, E. (2022). Independence and competence on audit fraud detection: Role of professional skepticism as moderating. Jurnal Akuntansi, 26(1), 161–175. https://doi.org/10.24912/ja.v26i1.823
Onie, S., Ma, L., Spiropoulos, H., & Wells, P. (2023). An evaluation of the impacts of the adoption of IFRS 15 revenue from contracts with customers. Accounting & Finance, 63(S1), 953–973. https://doi.org/10.1111/acfi.12978
Saptono, P. B., & Khozen, I. (2021). Tax administration issues on revenue recognition after IFRS 15 adoption in Indonesia. Jurnal Borneo Administrator, 17(2), 169–182. https://doi.org/10.24258/jba.v17i2.877
Published
2026-07-21
How to Cite
Porkas Sojuangon Lubis, Suriana, & Dominggus Sijauta. (2026). REVENUE RECOGNITION ERROR DETECTION LINKS AUDITOR ATTRIBUTES AND PSAK 115 UNDERSTANDING TO AUDIT EFFECTIVENESS. International Journal of Economics, Business and Innovation Research, 5(04), 4850-4875. https://doi.org/10.63922/ijebir.v5i04.5423
.png)
Contact Person +6282139474255
Email : ijebir@citakonsultindo.or.id / editor.ijebir@gmail.com
