kuesioner nim : umur : ....... tahun jenis kelamin : laki-laki / perempuan* tipe kelas : kelas online / kelas biasa* ipk : jumlah sks diambil semester ini : * = coret yang tidak perlu petunjuk: untuk setiap pernyataan di bawah ini, anda diminta memilih salah satu jawaban dengan memberi tanda checklist (v) pada kolom yang sesuai dengan diri anda. no pernyataan tidak pernah jarang kadang-kadang sering selalu 1 saya lebih mudah memahami pelajaran jika saya membacanya dengan baik 2 saya lebih mudah memahami materi pelajaran jika saya mendengar penjelasan materi dengan baik 3 saya belajar dengan baik ketika saya dapat menyentuh objek kerja tersebut 4 saya mudah memahami pesan yang dijelaskan dengan lisan dari pada pesan yang ditulis 5 saya mudah memahami pesan yang ditulis daripada pesan yang dijelaskan dengan kata-kata 6 saya lebih menikmati belajar langsung praktik daripada belajar di kelas 7 gambar-gambar, diagram, poster, dan grafik sangat membantu saya dalam mengingat dan memahami pelajaran 8 membaca buku dengan keras dan berulang-ulang merupakan cara terbaik agar saya mudah mengingatnya 9 saya lebih memahami materi pelajaran yang dijelaskan melalui demonstrasi dan alat peraga 10 saya senang mendengarkan siaran radio, musik, atau karaoke dari pada menonton tv 11 saya merasa mudah mengingat nama dari pada wajah seseorang 12 saya senang menonoton tv atau membaca novel dari pada mendengarkan musik atau radio 13 saya menyenangi kegiatan yang berhubungan dengan fisik seperti olahraga 14 saya ingat dengan baik apa yang saya pelajari melalui praktik 15 mendengarkan cerita jauh lebih menyenangkan daripada membaca buku cerita 16 saya merasa mudah mengingat wajah seseorang daripada nama seseorang 17 saya hanya bisa belajar dengan baik ketika berada pada suasana yang tenang 18 saya merasa jenuh duduk belajar di kelas terlalu lama 19 saya sering melakukan hal-hal seperti mengetuk-ngetuk pulpen, mengunyah permen saat proses belajar 20 saya lebih suka berbicara lewat telepon daripada harus bertemu langsung dengan lawan bicara 21 saya sangat antusias bila ikut membuat atau memperbaiki sesuatu dengan tangan saya 22 saya menyentuh seseorang untuk mendapatkan perhatiannya 23 saya mudah terganggu dengan suara-suara ketika saya sedang belajar 24 saya lebih senang membaca buku cerita daripada mendengarkan cerita 25 saya tidak merasa terganggu dengan suara-suara saat saya sedang belajar 26 saya suka bercakap-cakap dengan berhadapan secara langsung dengan lawan bicara dari pada lewat telepon 27 saya lebih menyenangi tugas-tugas tertulis daripada harus menjelaskan dengan kata-kata journal of accounting and business education (jabe) departement of accounting faculty of economics universitas negeri malang journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 4, issue 1, september 2019 previously known as:jurnal pendidikan akuntansi (2012-2015) currently known as:journal of accounting and business education (2016 – current) journal of accounting and business education is a fully peer-reviewed and open access journal published twice a year (march and september). journal of accounting and business education has an objective to help researchers publish their work for a wider audience and discover new connections. journal of accounting and business education considers original research articles and review articles in in any research areas of accounting and business education. editor-in-chief nurika restuningdiah, [scopus id: 57188957915] universitas negeri malang, indonesia editorial boards tariq tawfeeq yousif alabdullah, [scopus id: 56275199100] university of basrah, iraq mohd rizal palil, [scopus id: 51663834200] universiti kebangsaan malaysia, malaysia agung yulianto, [shinta id: 5984223] universitas swadaya gunung jati, indonesia dyah nirmala arum janie, [scopus id: 57194281680] universitas semarang, indonesia cipto wardoyo, [scopus id: 57194279103] universitas negeri malang, indonesia amelia amelia, [scopus id: 56996051000] universitas pelita harapan, indonesia nujmatul laily, [sinta id: 52354] universitas negeri malang, indonesia arta moro sundjaja, [scopus id: 55858212100] bina nusantara university, indonesia dudung ma'ruf nuris, [scopus id: 57209453051] universitas negeri malang, indonesia sulikah sulikah, [sinta id: 6026817] universitas negeri malang, indonesia primasa minerva nagari, [sinta id: 6026761] universitas negeri malang, indonesia aulia herdiani, [scopus id: 57215585392] universitas negeri malang, indonesia judi suharsono, [scopus id: 57214913379] universitas panca marga, indonesia arif widyatama, [scopus id: 57214510720] stie pancabakti palu, indonesia eka ananta sidharta, [scopus id: 57188958537] universitas negeri malang, indonesia bambang sugeng, [scopus id: 57193795732] universitas negeri malang, indonesia endang sri andayani, [sinta id: 6696175] universitas negeri malang, indonesia mohamad arief rafsanjani, [scopus id: 57198441635] universitas negeri surabaya sriyani mentari, [sinta id: 6698536] universitas negeri malang, indonesia diana tien irafahmi, [scopus id: 57188958626] universitas negeri malang, indonesia mika marsely, [sinta id: 6026761] politeknik negeri malang, indonesia mailto:jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349556') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349363') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/149991') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349468') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349456') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8654') 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javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8656') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8657') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8616') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8658') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8659') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/194234') journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 4, issue 1, september 2019 reviewers huy nguyen anh pham, [scopus id: 56625561100] rmit university, viet nam nur adiana hiau abdullah, [scopus id: 57202626302] universiti utara malaysia, malaysia yuan teng hsu, [scopus id: 56518883500] yuan ze university taiwan crispina gregory k han, [scopus id: 57131827400] universiti malaysia sabah, malaysia md mahfuzur rahman, university of malaya lee hsuan lin, [scopus id: 25121290400] yuan ze university taiwan tulus suryanto, [scopus id: 57191504347] iain raden intan lampung ari kamayanti, [scopus id: 57202217496] universitas brawijaya yuliansyah yuliansyah, [scopus id: 56685690500] universitas lampung sutrisno sutrisno, [scopus id: 57204889243] universitas islam indonesia, indonesia ceacilia srimindarti, [scopus id: 57210888518] universitas stikubank, indonesia sigit hermawan, [scopus id: 5720794070] universitas muhammadiyah sidoarjo, indonesia pancawati hardiningsih, [scopus id: 57210888228] universitas stikubank, indonesia agus zainul arifin, [scopus id: 57188962176] universitas tarumanegara jakarta ronald ronald, [scopus id: 57203370917] universitas pelita harapan, indonesia a.a. gde satia utama, (scopus id: 57190400910), universitas airlangga, indonesia negina kencono putri, [scopus id: 55806508000] universitas jenderal soedirman, indonesia faidul adzim musa, [scopus id: 57203746748] universitas muhammadiyah makassar, indonesia nurjannah rahayu kistanti, [scopus id: 57215215364] universitas negeri semarang, indonesia masripah masripah, [scopus id: 57202385712] upn veteran jakarta, indonesia dwi ermayanti susilo, [scopus id: 57205064630] stie pgri dewantara, indonesia victor pattiasina, [scopus id: 57207245058] univeristas yapis papua, indonesia rony wardhana, [scopus id: 57209295642] universitas narotama, indonesia sri utami ady, [scopus id: 57204906656] universitas dr. soetomo, indonesia eka handriani, [scopus id: 57190022037] universitas darul ulum islamic centre sudirman wiwit apit sulistyowati, [sinta id: 5988478] universitas swadaya gunung jati, indonesia yananto mihadi putra, [sinta id: 6111125] universitas mercu buana, indonesia syakhrial syakhrial, [sinta id: 6725831] universitas pamulang, indonesia muhammad ikbal, universitas mulawarman mailto:jabe.journal@um.ac.id 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http://journal2.um.ac.id/index.php/jabe volume 4, issue 1, september 2019 table of contents 1. does auditor independence mediate the relationship between auditor rotation and audit quality? lutfi ardhani, bambang subroto, bambang hariadi ........................................................... 1-10 2. assessing the relevance of undergraduate auditing education: a scoping review diana tien irafahmi ............................................................................................................ 11-23 3. the role of financial literacy on financial behavior pipit rosita andarsari, mega noerman ningtyas ................................................................ 24-33 4. does teacher-student relationship mediate the relation between student misbehavior and teacher psychological well-being? mohamad arief rafsanjani, heni purwa pamungkas, etika dhewi rahmawati ................ 34-44 5. le grand voyage: a great journey to liberate islamic accounting education from utilitarianism and secularism arista fauzi kartika sari, rahmawati rahmawati, harun al-rasyid ................................. 45-57 mailto:jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe sept 2019.pdf (p.1) fm sept 2019.pdf (p.2-5) journal of accounting and business education (jabe) departement of accounting faculty of economics universitas negeri malang journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 4, issue 2, march 2020 previously known as:jurnal pendidikan akuntansi (2012-2015) currently known as:journal of accounting and business education (2016 – current) journal of accounting and business education is a fully peer-reviewed and open access journal published twice a year (march and september). journal of accounting and business education has an objective to help researchers publish their work for a wider audience and discover new connections. journal of accounting and business education considers original research articles and review articles in in any research areas of accounting and business education. editor-in-chief nurika restuningdiah, [scopus id: 57188957915] universitas negeri malang, indonesia editorial boards tariq tawfeeq yousif alabdullah, [scopus id: 56275199100] university of basrah, iraq mohd rizal palil, [scopus id: 51663834200] universiti kebangsaan malaysia, malaysia agung yulianto, [shinta id: 5984223] universitas swadaya gunung jati, indonesia dyah nirmala arum janie, [scopus id: 57194281680] universitas semarang, indonesia cipto wardoyo, [scopus id: 57194279103] universitas negeri malang, indonesia amelia amelia, [scopus id: 56996051000] universitas pelita harapan, indonesia nujmatul laily, [sinta id: 52354] universitas negeri malang, indonesia arta moro sundjaja, [scopus id: 55858212100] bina nusantara university, indonesia dudung ma'ruf nuris, [scopus id: 57209453051] universitas negeri malang, indonesia sulikah sulikah, [sinta id: 6026817] universitas negeri malang, indonesia primasa minerva nagari, [sinta id: 6026761] universitas negeri malang, indonesia aulia herdiani, [scopus id: 57215585392] universitas negeri malang, indonesia judi suharsono, [scopus id: 57214913379] universitas panca marga, indonesia arif widyatama, [scopus id: 57214510720] stie pancabakti palu, indonesia eka ananta sidharta, [scopus id: 57188958537] universitas negeri malang, indonesia bambang sugeng, [scopus id: 57193795732] universitas negeri malang, indonesia endang sri andayani, [sinta id: 6696175] universitas negeri malang, indonesia mohamad arief rafsanjani, [scopus id: 57198441635] universitas negeri surabaya sriyani mentari, [sinta id: 6698536] universitas negeri malang, indonesia diana tien irafahmi, [scopus id: 57188958626] universitas negeri malang, indonesia mika marsely, [sinta id: 6026761] politeknik negeri malang, indonesia mailto:jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349556') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349363') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/149991') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349468') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349456') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8654') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349377') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/4230') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/149985') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/3993') 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javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8659') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/194234') journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 4, issue 2, march 2020 reviewers huy nguyen anh pham, [scopus id: 56625561100] rmit university, viet nam nur adiana hiau abdullah, [scopus id: 57202626302] universiti utara malaysia, malaysia yuan teng hsu, [scopus id: 56518883500] yuan ze university taiwan crispina gregory k han, [scopus id: 57131827400] universiti malaysia sabah, malaysia md mahfuzur rahman, university of malaya lee hsuan lin, [scopus id: 25121290400] yuan ze university taiwan tulus suryanto, [scopus id: 57191504347] iain raden intan lampung ari kamayanti, [scopus id: 57202217496] universitas brawijaya yuliansyah yuliansyah, [scopus id: 56685690500] universitas lampung sutrisno sutrisno, [scopus id: 57204889243] universitas islam indonesia, indonesia ceacilia srimindarti, [scopus id: 57210888518] universitas stikubank, indonesia sigit hermawan, [scopus id: 5720794070] universitas muhammadiyah sidoarjo, indonesia pancawati hardiningsih, [scopus id: 57210888228] universitas stikubank, indonesia agus zainul arifin, [scopus id: 57188962176] universitas tarumanegara jakarta ronald ronald, [scopus id: 57203370917] universitas pelita harapan, indonesia a.a. gde satia utama, (scopus id: 57190400910), universitas airlangga, indonesia negina kencono putri, [scopus id: 55806508000] universitas jenderal soedirman, indonesia faidul adzim musa, [scopus id: 57203746748] universitas muhammadiyah makassar, indonesia nurjannah rahayu kistanti, [scopus id: 57215215364] universitas negeri semarang, indonesia masripah masripah, [scopus id: 57202385712] upn veteran jakarta, indonesia dwi ermayanti susilo, [scopus id: 57205064630] stie pgri dewantara, indonesia victor pattiasina, [scopus id: 57207245058] univeristas yapis papua, indonesia rony wardhana, [scopus id: 57209295642] universitas narotama, indonesia sri utami ady, [scopus id: 57204906656] universitas dr. soetomo, indonesia eka handriani, [scopus id: 57190022037] universitas darul ulum islamic centre sudirman wiwit apit sulistyowati, [sinta id: 5988478] universitas swadaya gunung jati, indonesia yananto mihadi putra, [sinta id: 6111125] universitas mercu buana, indonesia syakhrial syakhrial, [sinta id: 6725831] universitas pamulang, indonesia muhammad ikbal, universitas mulawarman mailto:jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/465801') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/465790') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8663') 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javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/357733') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349525') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349465') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349485') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/340479') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/4266') journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 4, issue 2, march 2020 table of contents 1. the mediating role of attitude toward money on students’ financial literacy and financial behavior nurdian susilowati, kardiyem kardiyem, lyna latifah ........................................................... 58-68 2. premature sign-off of audit procedure maryam hafidhatul izzah, nujmatul laily .............................................................................. 69 78 3. the use of outsourced accounting service and its impact on smes performance fadilla cahyaningtyas, mega noerman ningtyas ..................................................................... 79-97 4. the effect of independent commissioner’s moderation of csr and institutional ownership on tax avoidance baiq fitri arianti ......................................................................................................................... 98-110 5. the institutionalization of remuneration (a case study at the university x) kharisma yuanita mahanani, bambang hariadi, roekhudin roekhudin ................................ 111-128 mailto:jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe march 2020.pdf (p.1) fm march 2020.pdf (p.2-5) journal of accounting and business education (jabe) departement of accounting faculty of economics universitas negeri malang journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 5, issue 1, september 2020 previously known as:jurnal pendidikan akuntansi (2012-2015) currently known as:journal of accounting and business education (2016 – current) journal of accounting and business education is a fully peer-reviewed and open access journal published twice a year (march and september). journal of accounting and business education has an objective to help researchers publish their work for a wider audience and discover new connections. journal of accounting and business education considers original research articles and review articles in in any research areas of accounting and business education. editor-in-chief nurika restuningdiah, [scopus id: 57188957915] universitas negeri malang, indonesia editorial boards tariq tawfeeq yousif alabdullah, [scopus id: 56275199100] university of basrah, iraq mohd rizal palil, [scopus id: 51663834200] universiti kebangsaan malaysia, malaysia agung yulianto, [shinta id: 5984223] universitas swadaya gunung jati, indonesia dyah nirmala arum janie, [scopus id: 57194281680] universitas semarang, indonesia cipto wardoyo, [scopus id: 57194279103] universitas negeri malang, indonesia amelia amelia, [scopus id: 56996051000] universitas pelita harapan, indonesia nujmatul laily, [sinta id: 52354] universitas negeri malang, indonesia arta moro sundjaja, [scopus id: 55858212100] bina nusantara university, indonesia dudung ma'ruf nuris, [scopus id: 57209453051] universitas negeri malang, indonesia sulikah sulikah, [sinta id: 6026817] universitas negeri malang, indonesia primasa minerva nagari, [sinta id: 6026761] universitas negeri malang, indonesia aulia herdiani, [scopus id: 57215585392] universitas negeri malang, indonesia judi suharsono, [scopus id: 57214913379] universitas panca marga, indonesia arif widyatama, [scopus id: 57214510720] stie pancabakti palu, indonesia eka ananta sidharta, [scopus id: 57188958537] universitas negeri malang, indonesia bambang sugeng, [scopus id: 57193795732] universitas negeri malang, indonesia endang sri andayani, [sinta id: 6696175] universitas negeri malang, indonesia mohamad arief rafsanjani, [scopus id: 57198441635] universitas negeri surabaya sriyani mentari, [sinta id: 6698536] universitas negeri malang, indonesia diana tien irafahmi, [scopus id: 57188958626] universitas negeri malang, indonesia mika marsely, [sinta id: 6026761] politeknik negeri malang, indonesia mailto:jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349556') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349363') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/149991') 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http://journal2.um.ac.id/index.php/jabe volume 5, issue 1, september 2020 reviewers huy nguyen anh pham, [scopus id: 56625561100] rmit university, viet nam nur adiana hiau abdullah, [scopus id: 57202626302] universiti utara malaysia, malaysia yuan teng hsu, [scopus id: 56518883500] yuan ze university taiwan crispina gregory k han, [scopus id: 57131827400] universiti malaysia sabah, malaysia md mahfuzur rahman, university of malaya lee hsuan lin, [scopus id: 25121290400] yuan ze university taiwan tulus suryanto, [scopus id: 57191504347] iain raden intan lampung ari kamayanti, [scopus id: 57202217496] universitas brawijaya yuliansyah yuliansyah, [scopus id: 56685690500] universitas lampung sutrisno sutrisno, [scopus id: 57204889243] universitas islam indonesia, indonesia ceacilia srimindarti, [scopus id: 57210888518] universitas stikubank, indonesia sigit hermawan, [scopus id: 5720794070] universitas muhammadiyah sidoarjo, indonesia pancawati hardiningsih, [scopus id: 57210888228] universitas stikubank, indonesia agus zainul arifin, [scopus id: 57188962176] universitas tarumanegara jakarta ronald ronald, [scopus id: 57203370917] universitas pelita harapan, indonesia a.a. gde satia utama, (scopus id: 57190400910), universitas airlangga, indonesia negina kencono putri, [scopus id: 55806508000] universitas jenderal soedirman, indonesia faidul adzim musa, [scopus id: 57203746748] universitas muhammadiyah makassar, indonesia nurjannah rahayu kistanti, [scopus id: 57215215364] universitas negeri semarang, indonesia masripah masripah, [scopus id: 57202385712] upn veteran jakarta, indonesia dwi ermayanti susilo, [scopus id: 57205064630] stie pgri dewantara, indonesia victor pattiasina, [scopus id: 57207245058] univeristas yapis papua, indonesia rony wardhana, [scopus id: 57209295642] universitas narotama, indonesia sri utami ady, [scopus id: 57204906656] universitas dr. soetomo, indonesia eka handriani, [scopus id: 57190022037] universitas darul ulum islamic centre sudirman wiwit apit sulistyowati, [sinta id: 5988478] universitas swadaya gunung jati, indonesia yananto mihadi putra, [sinta id: 6111125] universitas mercu buana, indonesia syakhrial syakhrial, [sinta id: 6725831] universitas pamulang, indonesia muhammad ikbal, universitas mulawarman mailto:jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/465801') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/465790') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8663') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/149996') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8665') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8662') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8666') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8670') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8669') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/222070') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/357743') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/4268') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/357736') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8672') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349394') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/127975') 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javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349485') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/340479') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/4266') journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 5, issue 1, september 2020 table of contents 1. client’s effort in intervening state’s financial audit result: grounded-theory approach muhammad ikbal................................................................................................................................. 1-13 2. individualized excel-based exams to prevent students from cheating ani wilujeng suryani ....................................................................................................... …………14-24 3. peer tutoring as a best practice of accounting learning in vocational education mika marsely .................................................................................................................................... 25-37 4. does student satisfaction mediate the correlation between e-learning service quality, academic engagement and academic achievement? jumaroh ratna satuti, sunaryanto sunaryanto, dudung ma'ruf nuris ............................................ 38-53 5. accounting students’ academic fraud: empirical evidence from indonesia lisa savilia, nujmatul laily ............................................................................................................. 54-68 mailto:jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe http://journal2.um.ac.id/index.php/jabe/article/view/12458 http://journal2.um.ac.id/index.php/jabe/article/view/14367 http://journal2.um.ac.id/index.php/jabe/article/view/12634 http://journal2.um.ac.id/index.php/jabe/article/view/12699 http://journal2.um.ac.id/index.php/jabe/article/view/12699 http://journal2.um.ac.id/index.php/jabe/article/view/12569 sept 2020.pdf (p.1) fm sept 2020.pdf (p.2-5) journal of accounting and business education (jabe) departement of accounting faculty of economics universitas negeri malang journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 5, issue2, march 2021 previously known as:jurnal pendidikan akuntansi (2012-2015) currently known as:journal of accounting and business education (2016 – current) journal of accounting and business education is a fully peer-reviewed and open access journal published twice a year (march and september). journal of accounting and business education has an objective to help researchers publish their work for a wider audience and discover new connections. journal of accounting and business education considers original research articles and review articles in in any research areas of accounting and business education. editor-in-chief nurika restuningdiah, [scopus id: 57188957915] universitas negeri malang, indonesia editorial boards essia ries ahmed, [scopus id: 56275650900] university of nizwa, oman tariq tawfeeq yousif alabdullah, [scopus id: 56275199100] university of basrah, iraq dinh tran ngoc huy, [scopus id: 36951633200] banking university, ho chi minh city, viet nam thomas soseco, [scopus id: 57194284145] the waikato university, new zealand ranu jain, sydenham institute of management studies, research and entrepreneurship education, india mohd rizal palil, [scopus id: 51663834200] universiti kebangsaan malaysia, malaysia diana tien irafahmi, [scopus id: 57188958626] curtin university, australia liem gai sin, [scopus id: 57160832600] association of international business and professional management (aibpm), indonesia satia nur maharani, [scopus id: 57216887292] universitas negeri malang, indonesia roymon panjaitan, [scopus id: 57218950196] universitas sains dan teknologi komputer semarang, indonesia agung yulianto, [shinta id: 5984223] universitas swadaya gunung jati, indonesia dyah nirmala arum janie, [scopus id: 57194281680] universitas semarang, indonesia cipto wardoyo, [scopus id: 57194279103] universitas negeri malang, indonesia amelia amelia, [scopus id: 56996051000] universitas pelita harapan, indonesia nujmatul laily, [sinta id: 52354] universitas negeri malang, indonesia arta moro sundjaja, [scopus id: 55858212100] bina nusantara university, indonesia sulikah sulikah, [sinta id: 6026817] universitas negeri malang, indonesia primasa minerva nagari, [sinta id: 6026761] universitas negeri malang, indonesia aulia herdiani, [scopus id: 57215585392] universitas negeri malang, indonesia judi suharsono, [scopus id: 57214913379] universitas panca marga, indonesia arif widyatama, [scopus id: 57214510720] stie pancabakti palu, indonesia eka ananta sidharta, [scopus id: 57188958537] universitas negeri malang, indonesia bambang sugeng, [scopus id: 57193795732] universitas negeri malang, indonesia endang sri andayani, [sinta id: 6696175] universitas negeri malang, indonesia mohamad arief rafsanjani, [scopus id: 57198441635] universitas negeri surabaya sriyani mentari, [sinta id: 6698536] universitas negeri malang, indonesia mailto:jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349556') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/818493') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349363') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/662871') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/815591') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/815558') 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javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8658') journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 5, issue2, march 2021 reviewers crispina gregory k han, [scopus id: 57131827400] universiti malaysia sabah, malaysia jati kasuma ali, [scopus id: 57190291965] universiti teknologi mara, malaysia nur adiana hiau abdullah, [scopus id: 57202626302] universiti utara malaysia, malaysia graham brendon dellar, curtin university of technology, australia yuan teng hsu, [scopus id: 56518883500] yuan ze university taiwan md mahfuzur rahman, university of malaya lee hsuan lin, [scopus id: 25121290400] yuan ze university taiwan tulus suryanto, [scopus id: 57191504347] iain raden intan lampung ari kamayanti, [scopus id: 57202217496] universitas brawijaya yuliansyah yuliansyah, [scopus id: 56685690500] universitas lampung sutrisno sutrisno, [scopus id: 57204889243] universitas islam indonesia, indonesia ceacilia srimindarti, [scopus id: 57210888518] universitas stikubank, indonesia sigit hermawan, [scopus id: 5720794070] universitas muhammadiyah sidoarjo, indonesia pancawati hardiningsih, [scopus id: 57210888228] universitas stikubank, indonesia agus zainul arifin, [scopus id: 57188962176] universitas tarumanegara jakarta ronald ronald, [scopus id: 57203370917] universitas pelita harapan, indonesia a.a. gde satia utama, (scopus id: 57190400910), universitas airlangga, indonesia negina kencono putri, [scopus id: 55806508000] universitas jenderal soedirman, indonesia faidul adzim musa, [scopus id: 57203746748] universitas muhammadiyah makassar, indonesia nurjannah rahayu kistanti, [scopus id: 57215215364] universitas negeri semarang, indonesia masripah masripah, [scopus id: 57202385712] upn veteran jakarta, indonesia dwi ermayanti susilo, [scopus id: 57205064630] stie pgri dewantara, indonesia victor pattiasina, [scopus id: 57207245058] univeristas yapis papua, indonesia rony wardhana, [scopus id: 57209295642] universitas narotama, indonesia sri utami ady, [scopus id: 57204906656] universitas dr. soetomo, indonesia eka handriani, [scopus id: 57190022037] universitas darul ulum islamic centre sudirman, indonesia wiwit apit sulistyowati, [sinta id: 5988478] universitas swadaya gunung jati, indonesia yananto mihadi putra, [sinta id: 6111125] universitas mercu buana, indonesia mr. syakhrial syakhrial, [sinta id: 6725831] universitas pamulang, indonesia muhammad ikbal, universitas mulawarman mailto:jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/149996') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/832618') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/465790') 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javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/357726') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/357733') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349525') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349465') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349485') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/340479') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/4266') journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 5, issue2, march 2021 table of contents 1. the inventory control system’s weaknesses based on the accounting postgraduate students’ perspectives essia ries ahmed, tariq tawfeeq yousif alabdullah, lutfi ardhani, eskasari putri .......... 1-8 2. the value of garp investing: evidence from the indonesian stock exchange panji priyanto ...................................................................................................................... 9-20 3. does emotional intelligence and religiosity affect the ethical judgment of accounting students? sulastri sulastri, ika uswatun kasanah ............................................................................ 21-30 4. related-party transactions and audit fees fortuna oktavia perwita, iman harymawan ..................................................................... 31-42 5. organization features and profitability: implications for a sample of emerging countries tariq tawfeeq yousif alabdullah, essia ries ahmed, ramyar rzgar ahmed ................ 43-52 mailto:jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe http://journal2.um.ac.id/index.php/jabe/article/view/19312 http://journal2.um.ac.id/index.php/jabe/article/view/19312 http://journal2.um.ac.id/index.php/jabe/article/view/15743 http://journal2.um.ac.id/index.php/jabe/article/view/15506 http://journal2.um.ac.id/index.php/jabe/article/view/15506 http://journal2.um.ac.id/index.php/jabe/article/view/15984 http://journal2.um.ac.id/index.php/jabe/article/view/16351 journal of accounting and business education (jabe) departement of accounting faculty of economics and business universitas negeri malang journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 7, issue 1, september 2022 previously known as: jurnal pendidikan akuntansi (2012-2015) currently known as: journal of accounting and business education (2016 – current) journal of accounting and business education is a fully peer-reviewed and open access journal published twice a year (march and september). journal of accounting and business education has an objective to help researchers publish their work for a wider audience and discover new connections. journal of accounting and business education considers original research articles and review articles in in any research areas of accounting and business education. editor-in-chief cipto wardoyo, [scopus id: 57194279103] universitas negeri malang, indonesia editorial boards essia ries ahmed, [scopus id: 56275650900] university of nizwa, oman tariq tawfeeq yousif alabdullah, [scopus id: 56275199100] university of basrah, iraq dinh tran ngoc huy, [scopus id: 36951633200] banking university, ho chi minh city, viet nam ranu jain, sydenham institute of management studies, research and entrepreneurship education, india mohd rizal palil, [scopus id: 51663834200] universiti kebangsaan malaysia, malaysia diana tien irafahmi, [scopus id: 57188958626] curtin university, australia liem gai sin, [scopus id: 57160832600] association of international business and professional management (aibpm), indonesia satia nur maharani, [scopus id: 57216887292] universitas negeri malang, indonesia roymon panjaitan, [scopus id: 57218950196] universitas sains dan teknologi komputer semarang, indonesia agung yulianto, [scopus id: 57217123865] universitas swadaya gunung jati, indonesia dyah nirmala arum janie, [scopus id: 57194281680] universitas semarang, indonesia cipto wardoyo, [scopus id: 57194279103] universitas negeri malang, indonesia amelia amelia, [scopus id: 56996051000] universitas pelita harapan, indonesia nujmatul laily, [scopus id: 57223048430] universitas negeri malang, indonesia sriyani mentari, [sinta id: 6698536] universitas negeri malang, indonesia arta moro sundjaja, [scopus id: 55858212100] bina nusantara university, indonesia endang sri andayani, [sinta id: 6696175] universitas negeri malang, indonesia sulikah sulikah, [sinta id: 6026817] universitas negeri malang, indonesia primasa minerva nagari, [sinta id: 6026761] universitas negeri malang, indonesia aulia herdiani, [scopus id: 57215585392] universitas negeri malang, indonesia judi suharsono, [scopus id: 57214913379] universitas panca marga, indonesia arif widyatama, [scopus id: 57214510720] stie pancabakti palu, indonesia eka ananta sidharta, [scopus id: 57188958537] universitas negeri malang, indonesia bambang sugeng, [scopus id: 57193795732] universitas negeri malang, indonesia mohamad arief rafsanjani, [scopus id: 57198441635] universitas negeri surabaya javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8654') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/818493') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349363') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/662871') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/815558') 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javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8616') journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 7, issue 1, september 2022 reviewers crispina gregory k han, [scopus id: 57131827400] universiti malaysia sabah, malaysia graham brendon dellar, [scopus id: 16446655100] curtin university of technology, australia lee hsuan lin, [scopus id: 25121290400] yuan ze university taiwan thomas soseco, [scopus id: 57194284145] the waikato university, new zealand jati kasuma ali, [scopus id: 57190291965] universiti teknologi mara, malaysia yuan teng hsu, [scopus id: 56518883500] yuan ze university taiwan nur adiana hiau abdullah, [scopus id: 57202626302] universiti utara malaysia, malaysia tulus suryanto, [scopus id: 57191504347] iain raden intan lampung ari kamayanti, [scopus id: 57202217496] universitas brawijaya yuliansyah yuliansyah, [scopus id: 56685690500] universitas lampung sutrisno sutrisno, [scopus id: 57204889243] universitas islam indonesia, indonesia ceacilia srimindarti, [scopus id: 57210888518] universitas stikubank, indonesia sigit hermawan, [scopus id: 5720794070] universitas muhammadiyah sidoarjo, indonesia pancawati hardiningsih, [scopus id: 57210888228] universitas stikubank, indonesia agus zainul arifin, [scopus id: 57188962176] universitas tarumanegara jakarta ronald ronald, [scopus id: 57203370917] universitas pelita harapan, indonesia a.a. gde satia utama, (scopus id: 57190400910), universitas airlangga, indonesia negina kencono putri, [scopus id: 55806508000] universitas jenderal soedirman, indonesia faidul adzim musa, [scopus id: 57203746748] universitas muhammadiyah makassar, indonesia nurjannah rahayu kistanti, [scopus id: 57215215364] universitas negeri semarang, indonesia masripah masripah, [scopus id: 57202385712] upn veteran jakarta, indonesia dwi ermayanti susilo, [scopus id: 57205064630] stie pgri dewantara, indonesia victor pattiasina, [scopus id: 57207245058] univeristas yapis papua, indonesia rony wardhana, [scopus id: 57209295642] universitas narotama, indonesia sri utami ady, [scopus id: 57204906656] universitas dr. soetomo, indonesia eka handriani, [scopus id: 57190022037] universitas darul ulum islamic centre sudirman, indonesia wiwit apit sulistyowati, [scopus id: 57216894065] universitas swadaya gunung jati, indonesia yananto mihadi putra, [sinta id: 6111125] universitas mercu buana, indonesia mr. syakhrial syakhrial, [sinta id: 6725831] universitas pamulang, indonesia muhammad ikbal, [scopus id: 57509682900] universitas mulawarman javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/149996') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/818519') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8662') 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javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/357726') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/357733') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349525') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349465') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349485') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/340479') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/4266') journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 7, issue 1, september 2022 table of contents 1. a review of corporate social responsibility: its perception, practice, impact, and challenges in nigeria ................................................................................................. 1-24 lynda chineze ezechukwu, anthonia uju uzuagu 2. covid-19 outbreak and industry reactions: evidence from colombo stock exchange .................................................................................................................. 25-34 dissanayaka, w.c.m., & anuradha, p.a.n.s. 3. tax planning practices amongst tax agents: evidence from malaysia ..................... 35-44 mohd rizal palil, syahirah razif 4. the effect of constructive alignment in course design on accounting students’ development of written communication competence ................................ 45-58 diana tien irafahmi, p john williams, nena lim 5. determinants of efficiency of tax’s collection in oman .............................................. 59-71 yousuf nasser amur alsarmi, essia ries ahemed e. r. ahmed., t.t.y. alabdullah., l. ardhani & e. putri/journal of accounting and business education, 5 (2), march 2021 1 the inventory control system’s weaknesses based on the accounting postgraduate students’ perspectives essia ries ahmed 1 tariq tawfeeq yousif alabdullah 2 lutfi ardhani 3 eskasari putri 4 1 college of economics, management and information systems, university of nizwa, oman 2 accounting department, college of administration and economics, university of basrah, iraq 3 accounting department, faculty of economics, uin maulana malik ibrahim malang, indonesia 4 department of accounting, faculty of economics and business, universitas muhammadiyah surakarta, indonesia email: e.ahmed@unizwa.edu.com doi: http://dx.doi.org/10.26675/jabe.v5i2.19312 abstract: the decisions made by the management in recording the amount of selling inventory in the year before the real year are as important as determining and defining the economic order size in the inventory management system. however, studies on accounting management, accounting education, and even operational management did not sufficiently discuss and evaluate such procedures to consider whether or not manipulations, frauds, or mistakes were made by the management. an obvious understanding to determine this kind of action by the managers considered as a vital element to the accounting education is represented in the recent study on the accounting postgraduate students by identifying their opinions in determining and describing whether the inventory management is weak or not and there are violations or not. the recent study is considered qualitative conducted by asking questions to 32 accounting postgraduate students regarding to the weaknesses of inventory management. the findings show that inventory management was not appropriately conducted and there were several problems and violations made by the sales managers. the other findings show that management inventory was used by the sales managers to sell the inventory in line with promoting their interests as they apply an earning management behavior. the findings also demonstrate that such case is not considered as a fraud but as a manipulation behavior. article history received: 19 february 2021 revised: 5 march 2021 accepted: 5 march 2021 keywords inventory control system, accounting, postgraduate students citation: ahmed, e.r., alabdullah. t. t. y. & ardhani, l., putri, e. (2021). the inventory control system‟s weaknesses based on the accounting postgraduate students‟ perspectives. journal of accounting and business education, 5(2),1-8. introduction one of the most important elements in financial position statements is assets as the key items in any corporation. assets are divided into two categories: non-current assets (fixed assets) in which their values are so high and beneficial for more than a year; and current assets such as cash in hand, inventory, cash in bank, and accounts receivable. these kinds of assets are characterized to be more liquid when compared to the non-current assets indicating that the current assets can be as cash in a short time. thus, managing journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v5i2.19312 e. r. ahmed., t.t.y. alabdullah., l. ardhani & e. putri/journal of accounting and business education, 5 (2), march 2021 2 the items related to the current assets, such as inventory, is extremely remarkable for enhancing the profitability of organization due to the important role of inventory in occupying a vital part from the equity or from the current assets for several companies (pirttilä et al., 2019). the recent research derives its importance from taking into consideration to focus on the inventory as the current assets, as recommended by the previous studies. for example, a recent study conducted by hilmola (2020) mentioned the necessity for researchers to conduct additional research on inventory due to the importance in promoting the firm performance and shareholders related to the value creation (alabdullah & ahmed, 2020; ahmed et al., 2020; ahmed et al., 2016; and alabdullah et al., 2016). the previous research has given an empirical evidence that inventory management strategies had a positive impact on the financial performance (muchaendepi, mbohwa, hamandishe, & kanyepe, 2019; alabdullah et al., 2020; alfadhl & alabdullah, 2013). karim et al. (2018) showed that the company may strongly face a big loss when there is incompetency in controlling and managing the inventory. furthermore, a large investment is greatly required, such as considerable warehouses and therefore a mistake in making decisions related to investment would make a firm fall in loss. moreover, the inventory management as an investment cannot be considered as everyday expense, yet as the incurred expenditure staying for a long time. a good inventory management strategy (ims) has a significant impact on financial performance as mentioned by (muchaendepi et al., 2019; brigham & ehrhardt, 2013; and chow et al., 2006). they revealed that inventory management strategy is greatly essential in the firm financial performance since this strategy occupies the top level as a very useful physical item in the balance sheet related to the assets. therefore, a right inventory, quantity, and availability to possibly offer the lowest price must be obtainable in the right place. the elements affecting the efficiency of inventory management include documentation/store records, planning, employee‟s knowledge/funding, and staff skill (chan et al., 2017). notably, there are several problems related to the inventory management appearing in companies, particularly in the industrial ones. for instance, frauds in inventory which represent a popular problem which gives the unreal figures of companies' profitability as argued by birol (2019). based on kpmg malaysia (2014), frauds related to the inventory theft ranked the second which were faced by the malaysian companies of approximately 13 percent, while the cash theft ranked the first with 26 percent of the total number of all committed frauds. another survey study conducted by pwc malaysia (2016) showed that embezzlement in assets represented a real crime with 57 percent, while it was revealed that 17 percent was for the procurement. several problems are going to take place due to the inability in managing the inventory, such as productivity decrease, changes in customers‟ commitment levels, and unfavorable cost increase to organization. those facts are confirmed by several studies conducted by rajeev (2008). as a result, several organizations have focused more on the importance of improving the efficiency of inventory management's internal control system. the internal control‟s weaknesses may result in opportunities for fraud phenomena, as established by cressey (1973) that fraud training theory can explain the fraud phenomena. this theory demonstrated that three factors representing the reasons leading to the committed frauds included opportunities, pressure, and rationalization. based on the above explanations, it is important to investigate the inventory management control‟s weaknesses in organization, when a company fails to have the satisfactory systems to control the purchase of inventory, valuation, and tracking. there are more divergent possibilities between demand and inventory supply, which negatively affect the operating performance as mentioned by feng, li, mcvay, & skaife (2015). in the previous studies, there was a lack of inventory management tested. thus, more attention is great needed in the future research as confirmed by the study conducted by karim et al. (2018). therefore, the advantage of this recent research has met the previous studies, yet there is still lack of literatures dealing with this topic, as indicated by the previous studies. literature review inventory management is a vital element in making decisions to best treat the inventory item in a company, such as activities, inventory management policies, and processes to hand the inventory to sufficiently guarantee the quantity of each item at all times kept in the warehouse (chan et al., 2017). as e. r. ahmed., t.t.y. alabdullah., l. ardhani & e. putri/journal of accounting and business education, 5 (2), march 2021 3 inventory is a vital component of the current assets in the balance sheet, it is clear to say that it is important for companies to give more attention to efficiently manage all company sizes: large, medium, or even small ones (bi, song, & fei, 2020) to promote the company performance (elsayed and wahba, 2013). inventory control is a quantitative control method with robust financial implications. in several companies, inventory control is one most significant technique to directly control the relationship of marketing, production, purchasing, and financial policies as demonstrated by kaudunde (2013). most previous studies tested the relationship between how to manage the inventory and how to promote the company performance. abd karim, nawawi, and salin (2018) mentioned that the main difficulties in the inventory control system might be affected by the fragmented practices due to the inadequate procedures for the operating standards. mohammaditabar, ghodsypour, and o'brien, (2012) demonstrated that organizing inventory items into some groups and taking similar inventory control policies for the items in each group may overcome the problems of inefficient inventory control policies. feng, mcvay, and skaife (2015) found that companies with the inventory-related material problems have got low ratios of inventory turnover and further reported the company inventory impairments with a strong internal control system over the financial reporting. de leeuw, holweg, and williams (2011) revealed that under the terms of decentralized control, the inventories held at the outlet level greatly differed from the aggregate inventory at any manufacturer level and in this case, they were similar. arogordon, and gupte, (2016) demonstrated that conducting a suitable combination of contemporary inventory management methods might assist practitioners to enhance the firm service delivery in case of ensuring the stable flow of materials. beamon, and kotleba, (2006) recognized serious system factors contributing the most meaningful elements to the inventory system performance, and recognizing the strengths and weaknesses of the inventory management strategies. as a result, it is remarkable to investigate and explore the inventory management weaknesses in the organization. a very few works have been conducted to investigate the inventory control of discrete firms. the empirical works revealed that a strong inventory control had the ability to form the company performance (koumanakos, 2008; and shin, ennis, & spurlin, 2015) due to the costs associated with the inventory as storage costs, obsolete stocks, ordering costs, and relevant costs at the minimum levels (samad wahab, & christabel, 2006). methods this research used a qualitative approach (interviews). the recent study was considered as the qualitative research by asking questions to 32 accounting postgraduate students regarding the weaknesses of inventory control system. a thematic analysis was utilized to deliberate the research problems. braun & clarke (2006) have provided a six-phase guide as a framework to conduct this analysis, namely being familiar with the data, generating initial codes, searching for themes, reviewing themes, defining theme, and writing-up. after additional analysis and evaluating the data collection, 32 students were selected as the research respondents in this evaluation. particular opinions were removed from the evaluation since the data concentration was not on the weaknesses of inventory or some issues associated with the opinions in terms of the discrepancies between purposes, techniques and findings. the arrangement of main issues and themes of the reviewed opinions was performed in stages to obtain an overview of the data involving the recognition of specific context, either weakness of inventory or the general discussion of inventory management; and then the data in the form of opinions were divided into two categories: violation and manipulation. the second stage included a further explanation related to the analysis of the reviewed opinions to associate with the exact themes and matters into broader arrangements. the recent study was directed with semi-structured interviews to the accounting postgraduate students using various semi-structured questions to cover different features of inventory management system. classification of the accounting postgraduate students’ opinions the key insights and issues from the accounting postgraduate students‟ opinions on inventory management were classified in accordance with their themes; however, a more detailed analysis of the e. r. ahmed., t.t.y. alabdullah., l. ardhani & e. putri/journal of accounting and business education, 5 (2), march 2021 4 accounting postgraduate students‟ opinions was undertaken. consequently, a more refined classification of the accounting postgraduate students‟ opinions was made in accordance with two themes as presented in table 1. table 1: classification of accounting postgraduate students’ opinions in accordance with the themes theme violation manipulation number of students 15 17 percent (%) 53% 74% codes (interviewees) aps1, aps2, aps3, aps4, aps7, aps9, aps10, aps15, aps20, aps23, aps25, aps26, aps31, aps30, aps32, aps5, aps6, aps8, aps11, aps12, aps14, aps16, aps17, aps18, aps19, aps21, aps22, aps42, aps27, aps28, aps29 table 1 explains that two types of themes discussed in each opinion of the accounting postgraduate students were violation and manipulation. based on the students‟ opinion themes, „manipulation‟ was the most frequently used (17 times), followed by „violation‟ (15 times). based on table 1 above, manipulation occupied the largest percentage by 53%, while violation occupied the smallest percentage by 43%. results and discussion several studies have revealed that the critical issues on traditional inventory might not illustrate the inventory level satisfaction by the management as a strategic choice regarding to the way in selecting the most appropriate approaches to express the market needs (småros, lehtonen, appelqvist, & holmström, 2003; wang, wu, zhao, & zhu, 2019; and bi, song, & fei, 2020). the inventory control failure in any organization may lead to the growth of losses, which can impact the organization‟s reputation and performance as supported by karim, nawawi, and salin, (2018) who have examined the standard operational functions and practices of managing inventory and identified any weakness in the inventory control and its effects on the organization performance. inventory control is one factor affecting the organization operation along with the industrial, macroeconomic, and firm-specific determinants, such as good governance practices ownership structures, effective boards and strategic direction innovations (husnin, nawawi, & salin, 2016; and ahmad, nawawi, & salin, 2016). sales report precision is important as one instrument to manage the bosses‟ expectations. the reasonable target will be assigned when showing the actual sales figure. a study conducted by dechow, ge, larson, and sloan, (2011) investigated the accrual elements of earnings (the changes in inventory) to distinguish the misstatements (in order to find out the manipulation of earnings). thus, they indicated that the misstatement of receivable accounts will lead to enhance the sales growth. in addition, changes in the inventory misstatement of this account ameliorated the gross margin closely followed by the investors. so, internal controls, such as audit must be initiated and realign the code of conduct of each organization manager/staff. despite the need to achieve the sales target for the company, it is unethical to look at the sales in advance. beside ethical issue, the organization shall not allow the management personnel to manipulate the sales report. if not prohibited, such misconduct may create greater impacts on the organization accounting and lead to misreporting in both accounts and balance sheets. 15 of 32 accounting postgraduate students (interviewees) considered that the violation issue was one inventory control problem leading to mistakes, errors, and frauds to the inventory delivery timing which caused illegal act practices in the inventory procedures. at this point, some interviewees illustrated that “…is considered unethical, while reporting the merchandise before sale is closed can be as a revenue recognition fraud since involving the violation purposeful accounting treatments”. this is due to the fact that merchandise inventory is the cost of goods and the current asset with a debit balance, while sale is credited increasing the stockholders‟ equity. furthermore, one accounting student said:“…this show that all managers were not alert and not professional in doing their jobs as managers. as managers, it is not ethical doing the jobs without following the rules and appointments made”. the errors will affect the e. r. ahmed., t.t.y. alabdullah., l. ardhani & e. putri/journal of accounting and business education, 5 (2), march 2021 5 ending inventory in which overstatement occurs. the chairperson should not recognize the sales revenue due to the undelivered goods. this practice, if caught by an external auditor, will be considered unethical or fraud and put the company in trouble. an accurate inventory evaluation is one most significant factor in the financial reports of the present year and income statements of the following year. it will be good to have a proper system to track the sales figure on the company instead of depending on some manual measures, that is, the current practices allowing the data manipulation. 17 of 32 accounting students considered that the inventory control system‟s weaknesses are one of good examples related to the accounting fraud involving the manipulation of company earnings. this is because fraud declaration is wrong and the dressing-up account is merely to increase its own reputation as an unethical practice. one of them suggested that to prevent fraud,“...need to be professional as well as ethical in carry out our role and responsibility. we should report every misreporting or frauds to the authority or at least escalate to the next level. in the event we have any doubt, we should go through the company code of conduct and guidance procedure to deal with such dilemma”. a real declaration is important to clarify the real situation related to the business condition and to plan a better strategy to improve and boost the sales performance. integrity value is something undoubted because lack of this criterion will bring down and ruin the goodwill of the related person. on the same structured interviews, “…it is considered unethical and reporting merchandise before the sale is closed can be as the revenue recognition fraud since involving the purposeful accounting treatments violation”. to prevent fraud, employers should announce the most severe penalties (beasley, carcello, hermanson, & lapides, 2000; dechow et al., 2011). although it may appear harsh, especially to the former friends and trusted employees, the rest of organizations need to be aware of a zero tolerance policy on fraud. fraud prevention can be started with a conversation. a discussion increases the benefits rather than committing a fraud. this research discovered that there was no awareness on the manipulation schemes in the financial reporting or those related to the inventory matters, inconsistent with the accounting and auditing standards. this finding is consistent with that that conducted by beasley, et al., (2000) showing that the recorded erroneous revenue recognition was the most common action related to the fraudulent financial reporting used among the sampling fraud organizations. numerous organizations which manipulated incomes are likely to go unidentified leading to the reality of greater classifiable losses to the investors . similarly, a study conducted by zakaria, nawawi, and salin, (2016) found that the internal control‟s weaknesses are one of the main factors contributing to fraud. so, the organization must have good mechanisms to detect and prevent any kind of manipulations and malpractices related to the inventory activities, such as the inventory delivery timing. there are many possible inventory-related manipulation schemes including double counting that regularly occurs in the manufacturing companies. thus, when an organization has transferred the inventory from one place to the other, this inventory has already been counted. therefore, this will open the doors to manipulate actions in the financial data recording because a manager might send the unreal report on the new inventory which was actually already stolen, changed, or no longer in the store. conclusion this recent study aims at figuring out the management control system„s weaknesses/strengths based on the accounting education represented by the accounting postgraduate students. two issues were found to see the inconsistency of accounting practices occurring in the organizations. for instance, the procedures of inventory delivery timing were not prepared well and still allowed the management to commit some unacceptable practices, such as manipulation and fraud. therefore, this current study tried to fill the gaps found in the previous studies, where no logistic study has tried to empirically examine the issues on inventory management and inventory delivery timing. the present study considered two inventory dimensions: manipulation and violation. the findings have further disclosed that both issues have further impacted the procedures of inventory delivery timing. it is worth mentioning that most accounting studies have considered the issues on violation and manipulation of inventory management as e. r. ahmed., t.t.y. alabdullah., l. ardhani & e. putri/journal of accounting and business education, 5 (2), march 2021 6 the reasons for making errors and mistakes to the inventory delivery timing. thus, it is important for the organization to collaborate with managers to have a good internal system to have good procedures and policies leading to the inventory control system in the organizations. the recent study has some implications starting from the value of this study to enrich the topic of supply chain dealing with the topic of inventory as well as to the literature review. in addition, the present study discussed further those explaining the inventory control related to the issues on manipulation and violation. in addition, the present study is considered new since there was a lack of study literatures dealing with the issues on accounting education and managerial accounting aspects. this research is considered important since introducing v various benefits to several organizations regarding to the development of inventory control system by introducing two vital elements related to the inventory delivery timing. accordingly, the recent study confirms that when violations are avoided and follow the proper rules, procedures and agreements, the situations will lead to a better inventory management control. the present research has two limitations. first, this research only took the samples of postgraduate students majoring on the accounting discipline from universiti sians malaysia. second, this study only selected the issues related to the respondents‟ opinions on the inventory controls‟ weaknesses. references ahmed, e. r., alabdullah, t. t. y & shaharudin, m. s. 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(2018). analysis of internal control system on inventory at university of x. prosiding celscitech, 3, 6-13. zakaria, k.m., nawawi, a. & salin, a.s.a.p (2016), “internal control and fraud – empirical evidence fromoil&gas company”, journal of financial crime, vol. 23 no. 4, pp. 1154-1168. y. bakhtiar, f.n. hamidah/ journal of accounting and business education, 6 (2), march 2022 1 essenso: meaning of profit oriented in pharmacist’s perspective yohan bakhtiar 1 fitria nur hamidah 2 1) 2) program studi akuntansi, politeknik negeri malang psdku kediri, indonesia email: yohan_bakhtiar@yahoo.co.id doi: http://dx.doi.org/10.26675/jabe.v6i2.10217 abstract: profit in accounting is, all this time, still focused on anything material, but not on non-material aspects. this research aimed at reviewing the meaning of profit oriented in pharmacist‟s perspective. this research used a qualitative approach with transcendental phenomenology as the analysis instrument. for ease of data analysis process, noema noesis intentional analysis eidetic reduction mapping worksheet or paper was used. the research results show that profit for pharmacist can be of education, services, satisfaction, careness and economy. the synthesis of the five meanings is realized in the term essenso 1 (education, services, satisfaction, careness, and economy) as the meaning concept of profit oriented in pharmacist‟s perspective. hopefully, with the benefits of essenso, accounting profession can also apply it to its various scientific concentrations, including for educator accountant, public accountant, public sector accountant and management accountant. article history received: 1 january 2020 revised: 12 march 2021 accepted: 1 january 2022 keywords pharmacist, essenso, phenomenology, meaning, profit oriented citation: bakhtiar, y., & hamidah, f.n. (2022). essenso: meaning of profit oriented in pharmacist‟s perspective. journal of accounting and business education, 6(2), 1-9. introduction in establishing a business, it is important for an entrepreneur to think about the extent of profit he/she will gain from the business he/she establishes. regardless of the amount of business capital incurred, profit is the main “intention” for an individual to decide to be entrepreneur (bandelj, sowers, & morgan, 2019). the same is also proposed by (douglas & prentice, 2019). accounting is the instrument to measure company‟s success in gaining profit. this conforms to the definition of accounting proposed by (kieso, weygant, & warfield, 2002) below. “accounting can be defined appropriately by explaining three important characteristics of accounting: (1) identifying, measuring and communicating financial information of (2) en economic entity to (3) concerned user”. accounting science is very identical to financial statements, namely profit and loss statement, statement in changes in equity, financial positions statement, cash flow statement and notes to financial 1 in pharmacy world, essenso is the category of vitamins and supplements for additional meal very beneficial for body health. journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v6i2.10217 y. bakhtiar, f.n. hamidah/ journal of accounting and business education, 6 (2), march 2022 2 statements. the development of multi-paradigm ideas in accounting science in indonesia makes accounting not only about financial accounting, but also sharia accounting, environmental accounting, and cultural accounting that develop very rapidly. the same occurs with research method in accounting science domain, that many accounting researchers are “shifting” and desiring to learn about qualitative research (non-positivism). previous study explains that “qualitative research methodologies focus on meaning and although use similar methods have differing epistemological and ontological underpinnings, with each approach offering a different lens to explore, interpret or explain phenomena in real-world contexts and settings” (rodriguez & smith, 2018). the shifting tendency makes many accounting multiparadigm researchers capable of opening and developing new ideas to add to diverse knowledge, especially in accounting. profit and loss statement is one of financial statements an accountant should produce, serving to measure the success in company‟s operation for a certain period. this shows that with profit and loss statement, company owner can observe the company‟s financial condition, whether it has profit or loss. in this context, profit or loss is only viewed from the difference between income and costs in a certain period. more specifically, profit in financial accounting can be defined as income that exceeds costs occurring during company‟s operation. from all of these, we may conclude that all this time profit in accounting only focuses on anything material, but not on non-material aspects (peiyi, 2013). the problem is: is the meaning of profit is that narrow? the contribution expected from this research is to open new “path” related to the meaning of profit and enrich the body of accounting knowledge, especially in the meaning of profit. research in accounting related to the definition of profit in “other” perspective has been carried out by (sari, 2014) (wafirotin & marsiwi, 2015); ekasari, 2014; wahyuni & alimuddin, 2016). the research conducted by sari (2014) aimed at understanding the meaning of “profit” from doctor‟s perspective. wafirotin & marsiwi (2015) researched on the meaning of profit in the perspective of hawkers on “jalan baru” of ponorogo city. ekasari (2014) researched on the exploration of the concept of profit from islamic perspective. wahyuni & alimuddin (2016) researched on understanding the concept of profit in love perspective based on the exploration of philosophical values from textual and contextual sources of traditional market traders for interpretation. the four researches show that the meaning of profit has wide perspective to enrich the body of accounting knowledge. not only domestically, a non-positivism accounting research related to the relationship of accounting with medical world has been conducted by broom, gibson, kirby, davis, & broom (2018) on infection management and microbial resistance can be strongly instilled in the economic imperative and employment relationship. this research found that power moved by the market created different obligation which may harm local and global antibiotic optimization agenda. based on the explanation, the purpose of this research was to review more thoroughly the interpretation of profit oriented in pharmacist‟s perspective. why was pharmacist profession chosen? first, pharmacist is a unique profession that if connected with accounting, the former is of health science and the latter is of social-economic science. this research was expected to open to new horizon of accounting. second, pharmacist is a profession that tends to wish to help those sick by giving correct medicine, thus not only material profit oriented. therefore, the uniqueness of this research is that the meaning of profit oriented for a pharmacist is found, namely essenso. throughout the study, there is no exploration of the meaning of profit oriented for a pharmacist. in general, this research‟s article structure starts with introduction, containing background of problems, objectives and the importance of the research. further, the literature review explains similar researches defining profit from certain profession‟s perspective. this research used transcendental phenomenology and essenso is the finding of the meaning of profit for a pharmacist. y. bakhtiar, f.n. hamidah/ journal of accounting and business education, 6 (2), march 2022 3 literature review profit oriented profit is the first thing coming to mind when an individual is going to establish a business. profit oriented always exists in various fields with different meanings. below is an explanation of some meanings of profit oriented in the previous three researches. in accounting, profit is more familiar than “corporate profit”, which is defined as company‟s ability in generating profit that can be distributed to its shareholders in the form of dividend or retained in the form of retained earnings that will be used as corporate investment fund (hidayah & rahmawati, 2019). the definition is not false as accounting is indeed defined as an instrument to generate corporate financial statements for stakeholders‟ and shareholders‟ interest. in “another” context, the research conducted by (amaliah & sugianto, 2018) finds the concept of ubuddiyah profit and religious profit in si pitung‟s frame of values to determine selling price. ubuddiyah profit is the reflection of social value forming love (mutual help and against greed), while religious profit is implemented in alms. similarly but unequally, farhan (2016) studied the meaning of profit in ibnu khaldun‟s muqaddimah. this research finds, (1) added value due to added production value, (2) profit affected by demand response due to changes in price and people‟s needs, (3) profit must be created from real work which may add value to goods or services, and (4) accidentally obtained profit is fortune from allah swt. pharmacist’s perspective pharmacist is one of the professions in health sector, for which an individual needs to have an education of bachelor of pharmacy at university level, followed with an education of pharmacist profession for one year. upon completing the educations, he/she will be capable of taking oath of pharmacist office and opening his/her own drugstore practice. similarly, to public accountant profession, upon bachelor of accounting graduation, it will be followed with an education of accountant profession along with state-organized examination for accountant title, then an individual can open a public accountant office (kap). which was pharmacist profession chosen? basically, business is sale and purchase of goods or services for profit. drugstore is a business of selling and buying medicines and health instruments. this can be understood that in its business journey, drugstore should produce profit for its business survival (going concern). therefore, there is no doubt in the least to conduct research related to the meaning of profit in pharmacist‟s perspective. methods phenomenology is a research method commonly used in qualitative research in accounting field (mulia, 2012). according to kamayanti (2016), transcendental phenomenology is a branch of phenomenology most commonly used compared to existential phenomenology and sociological phenomenology. transcendental phenomenology launched by edmund huserl focuses on awareness study. further, kamayanti explains that the assumption of human as “i” makes phenomenology unique since the research is individual centered and focused on how the individual (i) understands certain context since its environment is not “as important as” the existence of “i”. in the context of this research, informant‟s awareness related to the meaning of profit was important to explore, since there were many experiences formed while implementing pharmacist profession, thus noesis noesis was expected to emerge on the meaning of profit in drugstore business. the research believed that the phenomenology method was appropriate as the blade of analysis to dissect the interpretation of profit oriented in a pharmacist‟s perspective. kamayanti (2016) explains the stages of analysis technique of the phenomenology method as follows, (1) noema (textural analysis), what is seen and read, (2) epoche (bracketing), putting brackets y. bakhtiar, f.n. hamidah/ journal of accounting and business education, 6 (2), march 2022 4 on what is caught of other texture under the texture (structural analysis) to obtain noesis, (3) noesis (deeper level of interpretation and becoming pure awareness), what is realized through experience, (4) intentional analysis (taking further understanding of how noesis forms noema), and (5) eidetic reduction (result of condensation from the whole interpreting process, or ideas underlying the whole pure awareness). further, kamayanti (2016) states that epoche cannot be carried out only with a set of structured or semi-structured questions, but it is a process developing from awareness exploration process. this can be understood that phenomenology uses epoche (bracketing) as the instrument to collect data from informant, not “common” interview like commonly used qualitative descriptive research. what kamayanti states conforms to the explanation of groenewald (2004) yang that “unstructured in-depth phenomenological interviews supplemented by memoing, essays by participants, a focus group discussion and field notes were used”. this understanding is important for researchers to keep in mind that qualitative researches are not always identical to interview, since each methodology of qualitative research has their respective “special characteristics” in data collection. the effort to facilitate data analysis process in phenomenology method is to make table or worksheet of noema noesis intentional analysis eidetic reduction mapping (kamayanti, 2016). this also shows how data collection process and data analysis occurs simultaneously between one and other process. this uniqueness makes special characteristics of phenomenology a qualitative research method. data analysis in the phenomenology method consist of textural analysis (noema), bracketing (epoche), noesis, intentional analysis dan eidetic reduction. the research‟s informant was an experienced pharmacist in kediri city, east java. he had been a pharmacist for 7 years from 2012. besides having a drugstore as his personal business unit, he also worked as a pharmacist in bhayangkara hospital of kediri. with his rich experience in pharmacy, i hoped deepest awareness of the meaning of profit oriented in pharmacist‟s perspective would emerge. why did this research intentionally use only one informant? i quoted the explanation from (kamayanti, 2016) that: “however, i intentionally presented this table (table 6.1 worksheet of transcendental phenomenology analysis) to show how a transcendental phenomenology analysis processes was carried out and how careful a phenomenologist should immediately perform analysis during interview. the eight-path questions and answers had produced the so complicated worksheet; just image if you had successfully interviewed your informant for 1 hour. in addition, also imagine if you interviewed more than one informant!” yes, imagine if i had two informants “only” and performed the phenomenologist analysis well and correctly, it would surely be very complicated to catch the noesises explained by the two informants. here, i need to reconfirm that there is always something interesting to learn when you want to do nonpositivistic accounting research, thus it is incorrect that qualitative research is identical to “common” interview and supposed to be “easy” research. therefore, i decided to collect data “only” from one informant, and that the most important thing was that the bracketing process was good and correct. results and discussion from the research title, readers will think about where the accounting matters are and the relationship between accounting and pharmacist? yes, when accounting is defined only limited to numbers in financial statements along with their derivative journals, it will make readers think so. on the other hand, when researchers are willing to open their horizon of accounting from different “side”, there will surely be much new knowledge to acquire. likewise, in this research, if profit oriented is defined from different perspective, it will produce certainly new scientific knowledge. thus, profit oriented is not only viewed only from economic (material) perspective. y. bakhtiar, f.n. hamidah/ journal of accounting and business education, 6 (2), march 2022 5 educator pharmacist (education) the first meaning of profit for pharmacist is to educate patient to acquire, use, store and dispose of medicine correctly (dagusibu). below is a quote of interview explaining it. “it is clear that the mission is not only to serve patient for the need for medicine or supplement, but also to educate patient pursuant to the program promoted by the government, such as gema cermat, that it is currently necessary to promote gema cermat, gema cermat is the abbreviation of gerakan masyarakat cerdas menggunakan obat [community movement of smart use of medicine]. this way, besides educating patients who visit drugstore, i also promote it by applying poster, banner, or making leaflets related to gema cermat. gema cermat contains explanation of patient‟s use of medicine, from acquiring medicine correctly, ensuring acquiring correct and appropriate medicine from drugstore or pharmacy installation, how to use medicine correctly along with the rules, how to store medicine, that after use or for next use, it is necessary to store it before its expiry date, and lastly how to dispose medicine of, that medicine to dispose of is one that is damaged or has expired”. “buyers commonly want education in the beginning, like when „i‟m having headache, what is the medicine for it? from this, i explore more questions or assessment for more specific reason of the headache, whether it is side headache, or dizziness, or migraine, the causes are different. thus, pharmacists are accompanied with knowledge of pathophysiology even if not as thorough as that for doctor, but they can make a guess with the assessment, thus i can give them appropriate medicine”. from the informant‟s statement above, we may learn a lesson that professions assigned to educate the community are not only teacher or lecturer, but pharmacist as a profession of health field can also educate them of the importance of correct use and storing of medicine. this is important so that the community will not be misled to using medicines of unclear origin. with such an education, the community will be more cautious of circulation of counterfeit medicines and expired medicines. associated with accounting, educator accountant‟s role is very important in giving education related to the current development of accounting science. education in this case is not only emphasized on the intellectuality only, but should cover intact intelligence, including self-consciousness, spirituality, world and universe (mulia, 2012). related to educator accountant‟s role and awareness in accounting education world, i also quote the result of magister research conducted by farida (2017) as follows. “the awareness of role built is hierarchical, the first level is humanistic, critical, religious and holistic awareness. certain level reflects the roles and characteristics of learning performed by educator accountant. based on the intuition obtained and through prayer, dhikr and contemplation, hierarchy of awareness of educator accountant‟s role is illustrated in a concept map using tower (burj) as metaphor. the term burj in al-qur‟an bears the meaning of stronghold serving as defense”. it is further explained that humanistic awareness reflects the role of rafiqu ta’lim, that is to accompany student in learning accounting, critical awareness reflects the role of mudarris, that is to regulate the accounting learning flow, religious awareness reflects the role of murabbi, that is educator accountant as caretaker and pointer of truth path, and holistic awareness reflects the role of mursyid, that is to lead student towards perfect human awareness (insan kamil). pharmacist who serves (services) people in the health world are basically expected to serve patients who are currently sick to get well soon. similarly for pharmacist profession, public service requiring medicines for every disease requires pharmacist to patiently answer patients‟ every question. below is the quote explaining it. y. bakhtiar, f.n. hamidah/ journal of accounting and business education, 6 (2), march 2022 6 “there was then a call from bhayangkara hospital, i got more focused on pharmaceutical service activities in hospital as assistant pharmacist. in the beginning when i just entered bhayangkara hospital, i was not assigned to in-patient unit, but still in outpatient drugstore, i met many people, and if three was a notification of medicine lacking or empty, and it was the time to take it, i would surely sent message to patients‟ family, and if there was question i just answered it, and when i was assigned to morning shift, and there was a problem in the drugstore, assistant pharmacist called me and asked something about the solution or suggestion, i just answer if i was capable of doing so, but if i was incapable of answering, i would forward it to the head of pharmacy installation”. in the context of accounting, financial statements presented by accountants are actually the medium of communication of company‟s financial condition. for instance, with profit and loss statement, investors are aware of the dividend to be distributed in the period. is this not accountant‟s form of service for the stakeholders? therefore, nafarin (2013) states accounting as organization language since financial statements serve as the medium of communication between internal and external parties in order to make appropriate decision. satisfied pharmacist (satisfaction) sincerity in performing every work is a pleasure of working, is it not? work performed because of compulsion will make the heart uncomfortable. yes, work should conform to each person‟s passion and each person‟s passion must be different. sincerity in working will bring distinctive satisfaction when the work is useful for others. the same applies to the informant‟s feeling, and below is the quote of interview. “researcher: from this, i can conclude that you did your profession as pharmacist with totality?” “informant: yes, since i felt very satisfied when i am capable of helping others”. this was said by a pharmacist who was experienced in pharmacy world for 7 years. i certainly believe that this is the deepest awareness he felt. helping in the quote means that when a patient asked out of his working hours, either at the hospital or his drugstore, he attempted to answer the complaints the patients had. below is additional quote of the interview. “for example, in case of side effect, a patient asked: i took this, but i felt nauseous, dizzy, should i continue taking it or not. to cease taking medicine because of complaint, it should be immediately stopped, and i would suggest further control. allergy can be terminated for the time being, but i asked it was not enough with one or two questions, i assessed some questions in detail, if this is the case, then it would be like this, if otherwise, i would give answer a or b, the most important thing is assessment first”. the benefit of satisfaction felt by the informant conforms to the benefit felt by doctor (sari, 2014) and hawker (wafirotin & marsiwi, 2015). with this finding, we can conclude that whatever the profession may be, as long as it is performed sincerely, satisfaction will be acquired in performing people‟s respective job. pharmacist with careness (careness) every profession of our choice should be performed with high totality, which means that the job should be performed as best as possible. from the informant, i learned that it is absolute for anyone to have professionalism in assuming profession‟s mandate. below is the quote of interview. “yes, home care, i had done it. there were so many prescriptions at hospital, in only one shift of bpjs there were up to 200 prescriptions, and it was limited by time, since patients wanted to immediately go home and take the medicine. thus, even if the procedure had been minimized in avoidance of mistake, but it still existed. such mistake should be evaluated so that any inappropriate system would be corrected. at that time, it was error in etiquette, and y. bakhtiar, f.n. hamidah/ journal of accounting and business education, 6 (2), march 2022 7 it happened to be close to my house, upon tracing and finding the address, i went to patient‟s house to ensure the etiquette was correct or not. etiquette means label containing how to take medicine. this is related to difference in inventory of medicines between the inventory card and the physical inventory. this means it was a possible mistake in taking the amount or false etiquette, thus confirmation with patient is necessary. i finally went there. after confirming, there was indeed false etiquette, but from the home care i knew that the patient did not always took all of their chronic medicine, it was written 3x1, but only 1x was taken. thus, there were many stacks of medicines at patient‟s house. therefore, when there was a competition for model health worker, i, with colleague‟s assistance, made application to remind patients of the time for taking medicine. this is my experience at hospital”. care for other is the key. the research informant searched for patient‟s house to ensure that the etiquette was correct. even when he was in the patient‟s house, the patient evidently failed to follow the suggested rule of taking medicine, thus he and his colleague made application serving to remind patients of the time to take medicine. in accounting domain, such careness is emphasized more on social accountability accounting or green accounting (sukoharsono, 2007). for example, csr (corporate social responsibility) fund for rehabilitation of ex-mining lands in kalimantan island, procurement of clean water in east nusa tenggara (ntt) that was commonly in drought and other social actions. it is very important to study further the social accountant for any companies not to abandon their social obligation to affected community with such company‟s operation. with the development of accounting research on social responsibility, it shows company‟s careness for surrounding community that should be better, such as by viewing company‟s csr fund that is expected to increase from year to year in line with company‟s increasing net profit. pharmacist with business spirit (economy) business is always associated with material profit. there is nothing wrong since every entrepreneur establishing their business desires profit. however, it is necessary to underline that money should not be the benchmark of profitability. this opinion conforms to the research conducted by brown (2019) that common work from profit maximization is unacceptable in traditional political activities. it is alright for drugstore as a business unit to desire material profit for its business survival. below is the quote of interview. “i surely also bring the mission to promote my drugstore, at least, please visit the drugstore for further consultancy if my explanation is unclear, and, at the same time, i show the products of my drugstore‟s specialty. hmmm, excellent product can be created, for example a common brand but we choose it as excellent product, just randomly, or probably our own making, or our own concoction, like ointment for itches, we can just make it ourselves, can be sold in our drugstore, we promote it. not only ointment, it can also be powder and other concocted products”. promotion is the spearhead of a business. if promotion or marketing runs smoothly, it is quite likely that the assets would also increase and eventually net profit would also increase. the finding of material profit also conforms to the profit felt by doctors (sari, 2014) and hawkers (wafirotin & marsiwi, 2015). this indicates that economic factor is one important thing to support human‟s survival. it is undeniable that whatever human‟s profession is, one reason to be have our own business/work is to earn material sustenance to meet our daily life needs. conclusion based on the findings of profits for pharmacist profession previously explained, namely education, services, satisfaction, careness and economy, the next step is that i attempt to synthesize the five meanings into a scientific concept and make it easier for readers to call them. after performing selfy. bakhtiar, f.n. hamidah/ journal of accounting and business education, 6 (2), march 2022 8 contemplation, attempt, and prayer, i found the term in pharmacy world, essenso, that is of vitamin and supplement categories for additional meal that are very beneficial for body health. essenso is the abbreviation of education, services, satisfaction, careness, and economy. the term essenso was created after coding the meaning resulting from interview was complete. with the essenso profits, it is 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(2016). laba dalam perspektif cinta [profit in love perspective]. jurnal analisis seri ilmu-ilmu ekonomi, 16(03). t.t.y. alabdullah, e.r. ahmed, & r.r. ahmed/ journal of accounting and business education, 5 (2), march 2021 43 organization features and profitability: implications for a sample of emerging countries tariq tawfeeq yousif alabdullah 1 essia ries ahmed 2 ramyar rzgar ahmed 3 1 accounting department, college of administration and economics, university of basrah, iraq 2 college of economics, management and information systems, university of nizwa, oman, 3 college of business administration and economics, lebanese french university, kurdistan, iraq email: tariqtariq1984@gmail.com doi: http://dx.doi.org/10.26675/jabe.v5i2.16351 abstract: a huge number of prior works has tested the link between control mechanisms and organization profitability. several methods are used by such works to enhance the notion that there is an inconsistent result in the link between the board feature and organization profitability. however, there is unpredictability of this link shown by the prior works. thus, the current work aims at testing the board features as internal control mechanisms represented by the size of both organization and the board of directors in their impact on organization profitability in the non-financial companies in jordan, which was selected from a sample of emerging countries. data were collected from the annual reports for 65 organizations for the year 2019 from the website of ase via utilizing a crosssectional analysis study. after testing the hypothesis of the current work, the findings revealed that the size of the board of director has a significant impact on the organization profitability of nonfinancial companies in jordan. however, this work showed that organization size has an insignificant impact on organization profitability. the current work might help policymakers in emerging countries in general, and jordanian non-financial sector in particular, deliberate policies related to using robust control mechanisms to enhance directors' commitment toward utilizing internal control mechanisms for the ultimate aim in promoting organization profitability. article history received: 7 october 2020 revised: 31 october 2020 accepted: 1 november 2020 keywords internal control mechanisms, organization profitability, nonfinancial sector, emerging countries citation: alabdullah, t.t.y., ahmed, e.r., & ahmed, r.r. (2021). organization features and profitability: implications for a sample of emerging countries. journal of accounting and business education, 5(2),43-51 introduction internal control mechanisms have perceived a fast improvement and become as important tools in all sectors because of their importance to enhance the economy for any country (ahmed et al., 2020; abashammala et al., 2015; ahmed et al., 2019; ahmed et al., 2014a; ahmed et al., 2014b; ahmed et al., 2019; ahmed et al., 2018a, b, c, d; alfadehl and alabdallah, 2013; alabdallah et al., 2014a,ahmed et al. journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v5i2.16351 t.t.y. alabdullah, e.r. ahmed, & r.r. ahmed/ journal of accounting and business education, 5 (2), march 2021 44 (2012); ahmed, and zuqibah, 2013; ahmed et al., 2013; ahmed, et al., 2014c). the whole world today has faced incredible global crises in all health, economic, financial, and social aspects because of the covid-19 pandemic and this establishes for the need and concern to focus on internal control mechanisms instrument as a solution to such abnormal problems (alabdallah et al., 2020; alabdullah & ahmed, 2020). therefore, our paper aimed to examine the impact of the control mechanisms on the organizational profitability, especially that the previous studies mentioned the decline in the profit in the non-financial sector in 2019 in jordan. previous studies also revealed the important role of control mechanisms as a remedy to treat and deal with the decline of profit and performance in the companies. internal control mechanisms have an important role in improving organization profitability and also in protecting stockholders’ right. hence, enormous care has been given to such mechanisms by several studies in the literature review control determinants and mechanisms to ensure protection for the investors and other interested parties (e.g. alabdallah, 2020; abdol raham et al., 2019; alabdallah, 2019; thottolia et al., 2019; alabdallah, 2018; hashem, et al., 2019a; alabdallah, 2017; alabdallah, 2016a; alabdallah, 2016b; alabdallah, 2016c; alabdallah, 2016d; alabdallah, 2016e; alabdallah et al., 2018a; alabdallah et al., 2018b; alabdallah et al., 2018c; hashim et al., 2019b). in spite of the huge number of studies related to internal control mechanisms with its link to organization profitability, studies on jordanian non-financial organizations regarding the board of director size as one of the significant tools of the internal control mechanisms in terms of the association with organization profitability are lagging behind the non-financial companies of this sector. furthermore, the organization size is one of the important tools as an independent variable as stated in some literature in the emerging countries and therefore, this reflects a notable lack in not using this tool in the emerging countries including jordan as one of the emerging countries in particular (alabdallah et al, 2018), noting that the tools of internal mechanisms are ancient history existed hundreds of years ago (alabdullah et al., 2014a,b,c). in addition, this study is focused on attention as response to call for further researches that aimed to test the link between internal control mechanisms and organization profitability from one hand, and to deal with the problem of profitability declining in the companies belonging to non-financial sector in jordan from the other (alabdullah, 2020). the current study takes jordan into its consideration as one the emerging countries because there is a dire need to conduct further studies in such a context as mentioned by prior studies that a little attention has been given to company performance in the emerging countries especially in jordan (alabdullah et al., 2014; alabdullah, 2020; alabdullah & ahmed, 2020). the objective of the current work is to test the link between organization size and the board of directors size, and measuring organization profitability by considering both (roa) and (roe) as measurements of organization profitability. the present work aims to investigate the link between internal control mechanisms used by the current work and organization profitability in jordanian context. therefore, the present work might add knowledge to the existing literature in the emerging countries and in jordan as well. literature review and hypotheses a stream of literature investigated empirically the internal control mechanisms. they focused on testing the explanatory variables that could explain the difference in performance. a large number of previous studies tested the link between liquidity (aliy et al., 2010; mendas-da-selva and christenen, 2004), organization age (nurnnabi and hossein, 2012; pozneak and feraugi, 2015), and type of auditing (alaly and romerio, 2012; bobaker et al., 2012; nurnnabi and hossein, 2012) on performance. yet, few studies tested the effect of organization size with board of director size on organization profitability (alhtaybat, 2011). therefore, the current study comes to fill the gap and the lack in the literature review in testing its internal mechanisms represented by both organization size and board size and their impact on the organization profitability. there was another stream after the crises hit emerging countries and the drawbacks that also happened in several organizations in emerging countries like enron in usa; there really was a distinguished suspicion on several organizations throughout the world as a result in different fields which made several studies in the literature review give further attention such as (abushammala et t.t.y. alabdullah, e.r. ahmed, & r.r. ahmed/ journal of accounting and business education, 5 (2), march 2021 45 al. (2015); ahmed et al. (2020); ahmed et al. (2019); ahmed et al. (2014a); (ahmed et al. (2014b); ahmad et al (2019); ahmed et al. (2018a,b,c,d); alfadhl and alabdullah (2013); alabdullah et al. (2014a), ahmed et al. (2012); ahmad, and zuqibeh, (2013); ahmad et al. (2013); ahmad, et al. (2014c). one of the important tools of control mechanisms is the board size that is considered as one of the essential components in the internal control mechanisms in controlling and enhancing organization profitability and alleviating problems that occur due to conflict between the management and the owners of organizations as mentioned by agency theory (alabdullah, 2020; omer, 2019; alabdullah et al., 2016; ali and zarowin, 1992; pfeffer, 1972; ali et al., 2017; yermack, 1996; fauzy and locke, 2012; baliga et al.,1996). waves in the previous works reveal that when the board size is large will to more awareness and also expertise; therefore that might strongly lead to better organization profitability (alabdullah, 2016; buniamin, alrazi, johari, & rahman, 2008). similarly, a study done by alabdullah, yahya, and ramayah (2014) illustrates that one of the significant internal control mechanisms is the large size of the board of directors, and such mechanism leads to better organization profitability. on top of that, the current work used organization size as another independent variable to be tested in its link with organization profitability. it is notable that in the emerging countries, organization size has a significant role in enhancing profitability (e.g., bonaccorsi, 1992; hall, 1986; moen, 1999). for instance, bonaccorsi (1992), an italian study done in industrial organizations, showed that large companies have better performance than small companies and are more competitive than small ones. yet, still there are not enough studies to test this variable in most of the emerging countries as well as in jordan. there has not been real attention to be given to the organization size by prior studies in the emerging countries. given that finding, a small number of studies such as alabdullah et al. (2014) and alabdullah (2016) tested organization size as a control variable and further no prior works in most of the emerging countries context tested it as an independent variable (iv) in its link with organization profitability. thus, we expect that the increased board size would increase organization profitability. moreover, organization size has a significant and positive impact on organization profitability. h1: there is a significant and positive link between the board size and organization profitability. h2: there is a significant and positive link between organization size and organization profitability. methods collection of data and measurement of variables this work chose a sample that contained non-financial listed jordanian organizations by choosing real data for the year 2019. the reason for choosing the year of 2019 was that it reflected the more recent data which was exactly before the year 2020 (the year of the coronavirus pandemic appearance). moreover, there were a few studies done in jordan but not in 2019. accounting and control mechanisms data have been collected from amman stock exchange (ase) website for non-financial organizations. the current work measured the dependent variables using roa and roe. the independent variables were the board of directors’ size and organization size. table (1) details measurement of the variables. table 1. variables measurement number variables acronym measurements dvs 1 return on assets (roa) ratio of net income to total assets. 2 return on equity (roe) ratio of net income to common equity. ivs 4 board size bd the number of managers in the board of directors. 5 organization size osize natural logarithmic of the organization’s total assets. t.t.y. alabdullah, e.r. ahmed, & r.r. ahmed/ journal of accounting and business education, 5 (2), march 2021 46 the models of the present work comprised specific variables represented by the board of directors and organization size that have probable influence on organization profitability; which affect roe and roa. to test the link between the board of directors size, organization size, and organization performance in jordan, a cross-sectional study was done using real data for the year 2019. the models of the present study were shown below: results and discussion descriptive the analytical description of the dvs and ivs of the present work is provided for the organizations belonging to the nonfinancial sector by utilizing descriptive test. the variables distribution was illustrated in table 2. in table 2, the findings also revealed the kurtosis and skewness values for the research sample reflected a good indicator because the sample was normally distributed within the accepted range for both skewness and kurtosis. also the data normality might be accomplished in the case when the standard kurtosis is between the value of ±3 and standard skewness is between ±1.96. table 2. descriptive test variables mean. sd. min. max. skewness. kurtosis. roa 3.0960 1.3900 -1. 1000 6.9800 0.0970 0.9140 roe 4.8050 4.1840 0.0000 12.1000 0.3480 -1.2770 bd 10.9700 2.1140 7 15 0.2870 -0.8820 osize 7.1190 0.9360 4.0800 8.9600 -0.8350 1.0210 correlation test table 3 reveals the correlation test between dvs and ivs. it shows that the iv the board of directors size (bd) is positively linked to (roa) in value of (bd 0.4520). the table shows that the board size (bd) is positively linked to roe in value of 0.1710. the table also shows that the bd has a positive and high link with roa in a value of 0.4520. table 3. correlation test bd osize roa roe bd 1 osize -0.2950* 1 roa 0.4520** -0.2240 1 roe 0.1710* -0.2360 0.3160* 1 *p <.05 and **p <.01 multiple regression test this work used the regression test to test the direction of the link between dvs and ivs. regression for model 1 relying on organization profitability measured by (roa), model 1 is defined as shown below: table 4 shows the value of r square which is 0.2410 for the (roa) and it refers that such a value for the r square explains 24 percent of the ivs (bd & osize) on dv represented by roa. t.t.y. alabdullah, e.r. ahmed, & r.r. ahmed/ journal of accounting and business education, 5 (2), march 2021 47 table 4. regression for roa model roa r sq. 0.2410 sig f ch. 0.0010 table 5 show that the board of directors size (bd) has a positive link to roa (bd β=0.4230). however, the organization size (osize) has an insignificant link to roa (osize; β = -0.1000). table 5 explained test of the hypotheses for model 1. table 5. regression test for roa roa st. coef. variables beta t_value sig bd 0.4230 3.5890 0.0010 osize -0.1000 0.8440 0.4020 **p < .05, ***p < .01 in h1, it is stated that there is a significant and positive link between the board size and roa. the present work revealed a significant and positive link at β= 0.4230, t value= 3.5890, p< 0.1. it reveals that profitability characterized by roa is affected by the large board of directors size in non-financial organizations at ase. such a result is consistent with what is suggested in the current work. this result is consistent with alabdullah’s (2018) study that was also done in jordan. thus, h1 (there is a significant positive link between the board size and organization profitability) is supported. unlike wise, there is no effect in the link between the organization size (osize) and the roa (β = -0.1000, t value= 0.8440, p< 0.1). it shows that organization profitability is not affected by the organization size of the non-financial listed organizations in jordan. such finding is irreconcilable with what the current work suggests. instead, the study hypothesized that a positive and significant link exists between organization size and roa as stated by previous study (e.g. bonaccorsi, 1992; moen, 1999). however, this finding is consistent with a work done by (samie & waliters, 1990). their work indicated there is no link between organization size and profitability. therefore, hypothesis h2 (there is a significant positive link between organization size and organization profitability) is not supported. regression test of model 2 relying on organization profitability measured by (roe) for the current work, model 2 could be explained as below: however, the current work is not going to give any details about model 2 due to the findings of the anova test. this model is insignificant with value of 0.1170. conclusion in recent times, the drawbacks have affected negatively on both developing and developed economies, which has led to unlimited attention to shareholders to focus on organizations with high level of internal control mechanisms. several works in the literature have tested the link between internal control mechanisms and organization profitability. nevertheless, there have not been enough studies that investigated link by selecting both roa and roe as indicators of organization profitability and organization size with the board of directors size as a dv in dealing with non-financial sector in jordan. the findings proposed a positive link between a larger board size and organization profitability to its roa indicator. yet, there is no link between the board size and organization size, and organization t.t.y. alabdullah, e.r. ahmed, & r.r. ahmed/ journal of accounting and business education, 5 (2), march 2021 48 profitability to its roe indicator. the limitation of the current study lies in using a cross-sectional study for the year 2019 and thus we recommend and suggest the future research to examine the same variables of the current study but to be a panel study for five consecutive years. the current work recommended and suggested the future works to test the board size and organization size of non-financial organizations listed in another emerging countries that have the same characteristics as jordan. the current study did not do a comparative study with financial sector because the owner’s equity of the firms belonging to the financial sector is not comparable to the owner’s equity especially the perspective of capital structure of the non-financial firms as mentioned by (raza, 2013). references abdul rahim, n. f., ahmed, e. r., sarkawi, m. n., jaafar, a. r., &shamsuddin, j. 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(1996). higher market valuation of companies with a small board of directors. journal of financial economics, 40(2), 185-211. artikel ani a. w. suryani/journal of accounting and business education, 5 (1), september 2020 14 individualized excel-based exams to prevent students from cheating ani wilujeng suryani accounting department, faculty of economics, universitas negeri malang, indonesia email: ani.suryani@um.ac.id doi: http://dx.doi.org/10.26675/jabe.v5i1.14367 abstract: the covid-19 pandemic has brought a disruption to education, especially on how courses are delivered in higher education. higher education providers are forced to go online, without considering the availability of it infrastructure and capability of lecturers in delivering online courses. since online learning is perceived as an opportunity for academic integrity breaches, academicians need to ensure that the learning processes prevent students from cheating activities, especially during the exams. this paper presents an innovative approach in delivering online, excel-based exams which enable the lecturers to develop individualized exam questions. the accounting method and/or policy, as well as the accounting figures in the exams are automatically set based on the students’ identification numbers. this program also allows automatic scorings for such exams. based on the students’ perceptions collected from the online survey, this type of exam was not considered complicated and somewhat reduced the cheating opportunities. hence, it is suggested to use these individualized excel-based exams in the future online exams to increase the exam’s scoring objectivity and reliability scoring. keywords: excel-based exam, automatic scoring, accounting exam, individualized exam, accounting introduction the covid-19 outbreak with its massive challenges for human life brings disruptions which have never been predicted before. about 186 countries are affected, and one way to prevent further damage is by closing workplaces, shopping malls, and even schools/universities. hence, like it or not, academicians are forced to adapt with the new ways of teaching through online learning. consequently, teachers and lecturers should adopt the online flipping learning which combines the synchronous and/or asynchronous methods. these are expected creating flexibility and enjoyable learning experiences for students. however, some academicians are not ready to move their classes from offline into online learning environment. they merely change their classes from offline to online meetings via zoom or any other video conference devices and in fact, this is a backward in education where the teacher-centered mode is re-used. an accounting class is generally large. hence, when it comes to exams, not only designing (ashworth, bannister, and thorne, 1997; doran et al., 2011) but also scoring the paper-based exams bring pain to the lecturers (bertheussen, 2014). for this reason, it is suggested to use an innovative way, such as using computer-aided assessment to reduce the workloads (evans, 2013; gikandi, morrow, and davis, 2011; marriott and lau, 2008). although an accounting exam can be conducted online, many prefer to have a traditional type of hands-on exam for the security and surveillance issues (rogers, 2006; sindre and vegendla, 2015) to minimize the students’ cheating activities during the exam. it is admitted by the journal of accounting and business education p-issn 2528-7281 e-issn 2528-729 e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ a. w. suryani/journal of accounting and business education, 5 (1), september 2020 15 students that cheating in an online exam is much easier (king, guyette, and piotrowski, 2009) unless the exam is well designed (harmon, lambrinos, and buffolino, 2010). during the pandemic, exams must be given online since conducting exams in offline classes are strictly prohibited by the law. in this online environment, lecturers must be highly creative in designing an individualized exam (blayney and freeman 2008; nnadi, 2003) that no rooms for students to collude (nnadi and rosser, 2014). this paper aims at explaining an innovative approach possibly developed by the accounting lecturers to create the individualized excel-based exams to maintain the online exam quality and minimize the academic integrity breaches. in the following sections, previous studies on online learning are presented, and exam designs are described. this also consists of problems, solutions, and scoring generating techniques. next, students’ feedbacks collected from surveys are presented. conclusion and suggestions for future research are provided in the last section. literature review online learning is actually not a new concept, as massive open online courses have been introduced a decade ago, allowing distance education. a good online learning should support the learner-centered approach to enable the students to interact with the others; and digest information as active learners who can logically adapt the knowledge transfer (bento and schuster, 2003). this online learning is more flexible than the traditional one (herliandry et al., 2020), where teaching and learning activities may be performed anytime and anywhere (dewi, 2020) as less face-to-face interactions between students and facilitators (sudiana, fatah, and khaerunnisa, 2017). some argue than online learning increases students’ participations in the class (saifuddin, 2018) because they are more confident and comfortable in asking or responding questions (firman and rahman, 2020). furthermore, students become more independent in solving problems because they are asked to be more active in searching information related to the course (firman and rahman, 2020; herliandry et al., 2020). although many support the online learning, some others criticize that online learning needs longer preparation time for the teaching and learning activities, considerably costly (herliandry et al., 2020), and may result in anxiety due to slow feedbacks given to the students (pangondian, paulus, and nugroho, 2019). online learning also provides challenges for both students and teachers, one of which is due to the online learning infrastructure (firman and rahman, 2020). this online learning requires good internet access and gadgets (bustomi, 2020), which are not always available (dewi, 2020; khasanah, pramudibyanto, and widuroyekti, 2020). apart from the infrastructure, teachers/lecturers are also shocked as they have to master information and technology skills as online learning involves video conference and other learning media which force the teachers/lecturers to be more creative and adaptive in delivering the course materials (bustomi, 2020; djaja, 2016; herliandry et al., 2020; sole and anggraeni, 2018). with the minimum supports from schools or educational institutions, teachers and students are borne by the costs to access the online learning (abidin, rumansyah, and arizona, 2020; firman and rahman, 2020; herliandry et al., 2020). moreover, students also complain about their difficulties in understanding the course materials and completing the homework due to the communication barriers between the students and the teachers (bustomi, 2020; firman and rahman, 2020; juliane et al., 2017). to minimize those challenges, teachers may adopt the project-based or problem-based assignments which require the students to search information related to the assigned projects (abidin, rumansyah, and arizona, 2020; chasanah, khoiri, and nuroso, 2016). although the learning is conducted through online platforms, the assessments must be able to measure students’ performances. assessments also serves as instruments to check the student’s achievements, planned learning outcomes, feedbacks as well as the instructors’ monitoring instruments (born, 2003). online exams can be set to maximize and fasten the teachers’ scoring objectivity (aripin, silalahi, and ulfa, 2020). it is expected that online exams possibly minimize the students’ cheating activities. however, without proper planning, those will encourage the students to do more cheating a. w. suryani/journal of accounting and business education, 5 (1), september 2020 16 activities by creating notes, using gadgets to find the answers, or communicate with the others (abdullahi and mansor, 2015; murdiansyah, sudarman, and nurkholis, 2017). the next section discusses the online exam designs to prevent from the students’ cheating activities by providing the individualized excel-based exams. methods in the final exam of the intermediate accounting course, there were seven questions consisting of four conceptual and three problem-based questions to answer. the conceptual questions were set the same for all students. however, each problem was designed individually for each student, both related to the accounting method and/or policy choices as well as the numbers involved in the problems. hence, an excel spreadsheet was used to automatically generate methods and numbers based on the students’ identification number. excel is an essential feature in accounting education (beaman, waldmann, and krueger, 2005; chandler and marriott, 1994) that the accounting lecturers should have sufficient excel skills, especially in designing excel-based exams. in this higher education institution where the exams were conducted, a student’s id has a 12-digit number, with some differences in the sixth and last four digits. hence, the starting point to design an individualized exam was using those numbers with some excel functions to generate numbers. from those 12 digits, only five unique digits of each student were utilized instead of the last digit usually used to create a distinctive figure for each student. students were first asked to fill 12 digits of their student’s ids in the 12 cells. this id was used to produce numbers and select the accounting method. to avoid incorrect input of two or more digits in a cell, data validation was set to constrain the number of only from 0 to 91. the cells were also shaded with a bright green color to attract the students’ attention. instructions were clearly provided for the students to input 12 digits of their student’s ids in the bright green-shaded cells, while the notification of numbers and methods for each question will be different based on each student’s id (see figure 1). figure 1. instructions to complete the cells 1 to do this, click on excel ribbon: data – data validation whole number – minimum 0 – maximum 9. a. w. suryani/journal of accounting and business education, 5 (1), september 2020 17 students were then classified into the odd or even group. this classification was to decide the accounting method used in solving the problems. hence, the excel’s mod function was used with the last digit of student’s ids as the number and 2 as the divisor2. there were two outcomes: 1 and 0, with 1 represented the odd group (group a), and 0 represented the even group (group b). this formula was then combined with the if function to provide notifications for those students whether belonging to group a or b (see figure 1). this group needs to specify the students’ answer sheets. for example, students were asked to make journal entries either for the lessee (group a) or lessor (group b, see figure 2). if function was used to assign which method should be conducted by the students. figure 2. sample questions and formula prior to assigning numbers, a base number was set and then the if function was used to assign the unique numbers to each problem provided for the exam (see figure 2). as previously explained, only five numbers are unique to each student (6th, 9th, 10th, 11th and 12th), and then the combination of 6th and 9th with 10th to 12th were used to set figures in the questions. for instance, continue the lease problem. the first value was set for the leased equipment’s book value. it was set as a combination of question codes and base numbers, added with the multiplication of student’s id. the second value was set for the equipment’s fair value of idr 200,000 higher than the equipment’s book value. next, the cost of goods sold was set 80% of the book value. in this type of problem, the lecturer needs to be careful in determining the lease terms and estimated useful life as the results are in different leasing types; capital lease or operating lease. the next step, the lease terms (in cell o12) were then set by using if function. the last digit of student’s id (in cell l6) was used to create a different length of lease as follows: =if(l6=1,3,if(l6=2,4,if(l6=3,5,if(l6=4,5,if(l6=5,5,if(l6=6,8,if(l6=7,9,if(l6=8,10,if(l6=9,1 1,12))))))))) ……….. (in cell o12) after determining the lease terms, the estimated useful life of asset was determined from cell o12: =if(o12=3,9,if(o12=4,10,if(o12=5,8,if(o12=6,7,if(o12=7,8,if(o12=8,8,if(o12=9,11,if(o12= 10,12,if(o12=11,12,12))))))))) ……….. (in cell o13) 2 at the target cells type =mod(l6,2) with l6 is the cell containing the last digit student’s id. a. w. suryani/journal of accounting and business education, 5 (1), september 2020 18 in determining the incremental borrowing rate, the second last digit used was: =if(j6=1,7%,if(j6=2,6%,if(j6=3,5%,if(j6=4,8%,if(j6=5,9%,if(j6=6,10%,if(j6=7,11%,if(j6=8, 4%,if(j6=9,12%,13%))))))))) ……….. (in cell o14) once the lease terms, life of equipment, and borrowing rate were set, the estimated unguaranteed residual value could be calculated by using the following formula: residual value = {depreciation rate x (useful life – lease term)} + base number = {(book value / useful life) x (useful life – lease term)} + base number (1) in the excel sheet, the formula was: = ((o7/o13)*(o13-o12))+125000 ……….... (in cell o9) the last number was the annual rental payment. it was calculated with the following formula: annual rental payment = (fair value – pv residual value) / lease term (2) in the excel sheet, the present value (pv) might be easily calculated that the annual rental payment (cell o11) became = (o8+pv(o14,o12,0,o9,1))/o123. lastly, the sheet was protected, and the formulas were hidden before distributing the exam4. in addition to the creation of exam’s questions, the solutions to the problems were also designed in different excel sheet. this scoring guide was purposively designed to make the exam scoring operate faster. the numbers in problems were connected with the solutions while the point for each correct answer was defined. once student’s id was input to the solution sheet, the correct answer changed. this method enables the scoring to operate faster, although the students submitted the answers in the form of photo. exam delivery the exams were conducted in three classes at the same time and at the same date. the individual exam question was available sequentially in the e-learning (moodle-based) platform at one specific time. students could only see the exam questions at the set time. as many students were from rural areas where internet connection is somehow inaccessible and/or limited, the individual exam question is also sequentially sent via whatsapp group at the same time with the question appeared through e-learning. whatsapp has been used as a means of communication in medical schools (dar et al., 2017; willemse, 2015), engineering (nitza and roman, 2016), and education (awada, 2016; hamad, 2017; mwakapina, mhandeni, and nyinondi, 2016; susilo, 2014). this platform allows the students to have online discussions, while the teachers found it easier to deliver the online tutorials, learning materials, and assignments, including instructions (so, 2016; susilo, 2014). hence, it is not surprising that whatsapp, including whatsapp group, is very popular in indonesia, although sometimes the participants send spams and hoaxes (bouhnik and deshen, 2014; cetinkaya, 2017) while teachers should be prepared to spend time outside their normal working hours (bouhnik and deshen, 2014). each question had different points; a more complex problem had a higher score and took more time to finish. hence, the time allocation for each question was set differently. students were given a limited time to answer each problem. this information was sent to the students a week before the exam to have better preparation. instructions of how to answer the exam questions and how to submit their answers to be marked was sent before the exam date. since the students’ typing speed could not be equalized, the students’ laptops or pcs had different technical specifications, and based on the agreement with the students; the answers were paper based; one sheet for one question. 3 the formula to calculate this present value is pv (interest rate, lease term period, annual payment of 0, guaranteed residual value, and 1 for beginning of the year). 4 select all worksheets except for the green cells for the student’s id, right click, choose protection tab and then select locked and hidden. next, click tools in the ribbon, protection, and protect sheet. fill in the passwords to lock the worksheet. a. w. suryani/journal of accounting and business education, 5 (1), september 2020 19 once the students had completed one problem, they were asked to take a picture of each answer, scanned it, upload it either to the e-learning platform, or send it to the lecturers’ whatsapp numbers. students were given five minutes after the exam ended to upload their answer sheets. after this upload time ended, the next question was then opened for the students. these online exams were set to be invigilated. hence, the students were asked to join the online classrooms via webex5 with mode-on video that the lecturers were able to see what the students did during the exam to prevent from the students’ cheating activities. as previously explained, this excel-based exam is already individualized with each student receiving different methods and numbers. hence, the online surveillance plus individualized-type questions are expected to reduce the cheating opportunities as the answers of each student are different from the others. the students’ perceptions and feedbacks regarding to this online, individualized excel-based exam are further discussed in the next section. results and discussion to measure the effectiveness, qualtrics online survey was conducted to the students participating in this online individualized excel-based final exam after the final scores were announced (n=80). each questionnaire consisted of 16 questions. students were questioned related to their genders, final exam scores, 14 questions on the easiness use of this online individualized excel-based final test, and their reflections (alsadoon, 2017; deutsch et al., 2012; hillier, 2015; özden, ertürk, and sanli, 2004), measured with the 5-point likert scale. the survey was opened for a week, and 76 responses were collected. the students were further classified into high achievers (if the exam mark is more than or equal to 85) and nonhigh achievers (for those less than 85). for data screening, we checked the univariate outliers from the standardized value for each likert scale item. we found three outlier cases, and these were then removed from the data for further analysis (hair et al., 2014), resulting in a 91% response rate. after removing the outliers, a normality test was conducted using skewness and kurtosis, and showed that all the data was normally distributed. a principle component analysis (pca) was then conducted on those 14 items with a direct oblimin rotation to classify the questionnaire into several factors and check the construct and discriminant validity. the kaiser-meyer-olkin measure verified the sampling adequacy for the analysis, with kmo = 0.753, and all kmo values for individual items were more than the minimum threshold of 0.5 (field, 2013). bartlett’s test of sphericity with c2 (91) = 288.803 and p < 0.001, indicated that the correlations between items were sufficiently large for pca. an initial analysis was conducted to obtain the eigenvalues for each data component. five data components had the eigenvalues of more than one and in combination, explained by 69.56% of the variance. table 1 shows the after-rotation loading factor. the items clustered in the same components suggested that component 1, 2, 3, 4 and 5 respectively represented the easiness, timeliness, self-efficacy, challenge, and integrity concern of the online exam. these factor scores were then used for further analysis. table 1. factor loading for each item items easiness time lines self efficacy challenge integrity applicable to other courses .855 preferring the online to offline exam .820 the system is easy to use .816 feeling relax if future exam is conducted online .767 recommending online for future exams .744 online exams objectively reflect the students’ performance .518 5 webex is an online video conferencing platform. a. w. suryani/journal of accounting and business education, 5 (1), september 2020 20 not feeling panic when doing the exams .847 requiring less time finishing the online exams .696 believing of having enough competence .693 not ashamed after finishing the exams .649 feeling proud after finishing the exams .607 online exams are enjoyable challenges .887 reading on screen adding no difficulties during the exams .819 online exams reduce cheating opportunities .995 eigenvalues 4.258 1.654 1.479 1.321 1.026 % of variance 30.411 11.814 10.567 9.437 7.331 a .869 .568 .562 .661 n/a based on those classifications, the descriptive statistical data were shown in table 2. although all mean scores were greater than 3, out of 5, the students relatively agreed that the online exam was technically easy to follow and appropriate to use for the future exams in other courses. in addition, students also felt that in the online exam environment, they believed that they had a higher competence and less panic. hence, they felt that there was no feasible challenge when reading the questions on the screen instead of on paper. these positive experiences made the students preferred online to offline exam and agreed if the future exams will be conducted via online that they will feel relax. students also considered that it was harder for them to do cheating activities during the personalized type exams were conducted. hence, they believed that an online exam objectively reflected their performance. table 2. descriptive statistics items min max mean stdev easiness applicable for other courses 2 5 3.66 0.866 preferring online to offline exams 1 5 3.39 1.054 the system is easy to use 2 5 3.71 0.769 feeling relax if future exam is conducted online 2 5 3.46 0.846 recommending online for future exams 2 5 3.46 0.846 online exams objectively reflect the students’ performance 2 5 3.24 0.875 timeliness not panic when doing the exams 2 5 3.77 0.837 need less time finishing the online exams 1 5 3.32 0.883 self-efficacy believing of having enough competence 2 5 3.83 0.747 not ashamed when finishing the exams 2 5 3.65 0.819 proud after finishing the exams 2 5 3.34 0.899 challenge online exams are enjoyable challenges 1 5 3.30 0.922 reading on screen add no difficulties during the exams 2 5 3.47 0.863 integrity online exams reduce cheating opportunities 1 5 3.35 0.952 independent sample t-tests were then conducted to check the differences between gender and high achiever students based on five factors. on average, female students expressed the decreasing cheating opportunities (m=0.159, se=0.963) more than male students (m=-0.505, se=0.975). this difference6 was significant with t(65) = -25.399 and p < 0.05; representing a medium-sized effect with r = 0.29. this finding implied that male students perceived that cheating opportunities during the online exams were higher than the female students did. this was probably caused by the female students’ learning efforts were 6 for robustness check, a non-parametric test was conducted and showed similar findings (mann whitney u = 246; p = 0.017). there was no significant different between the high and non-high achiever students. a. w. suryani/journal of accounting and business education, 5 (1), september 2020 21 bigger than male students’ (dodeen, 2012), since male students perceived that cheating was more morally acceptable (smyth and davis, 2003). although academic cheating activities happened more in offline classes than online environments (watson, george, and sottile, 2010), educators should take extra precautions when designing online tests, such as by designing subjective exams (essay questions) than objective measures (multiple choice questions). conclusion this study aims at explaining the online exam methods in accounting 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applications for english learning in higher education.” professional development in educational: 10–24. watson, george, and james sottile. 2010. “cheating in the digital age: do students cheat more in online courses?” online journal of distance learning administration 13(1). willemse, juliana j. 2015. “undergraduate nurses reflections on whatsapp use in improving primary health care education.” curations 38(2): 1–7. p.r. andarsari, m.n. ningtyas /journal of accounting and business education, 4 (1), september 2019 24 the role of financial literacy on financial behavior pipit rosita andarsari 1 mega noerman ningtyas 2 1,2 accounting department, stie asia malang, indonesia email: meganoerman7@gmail.com doi: http://dx.doi.org/10.26675/jabe.v4i1.8524 abstract: a number of previous empirical studies found that, financially speaking, literate people tends to do budgeting, saving, controlling expenses, managing debt well, participating in stock market and planning pension fund, etc. in other words, the higher an individual‘s knowledge and understanding of financial concept, the more likely they are to behave financially well in their daily life. financial literacy is needed by everyone, including womenpreneur because not only they have to be able to manage their personal finance, they should also manage their business finance. financially literate people are more likely to get access to external funding and to develop their business. this research aims to examine the role played by financial literacy on financial behavior of womenpreneur in malang. financial literacy was measured using 11 questions modified from lusardi & mitchell (2011) and financial behavior was measured using 8 questions taken from infe. the sample was 95 respondents who were female (owners of) micro, small and medium enterprises in malang. the data were collected using questionnaire. we used partial least square with smart pls 3 to examine the variables. after the first bootstrapping process, we drop some invalid indicators and then perform the second bootstrapping. the result showed that all of the remaining indicators were valid and financial literacy had been found to have positive significant (influence) on financial behavior. keywords: financial literacy, financial behavior, women entrepreneur, msmes. introduction woman is the future of the world‘s economy—in 2028, women will take 75% of the world‘s discretionary expenditure. furthermore, the proportion of working women had increased by 23% in 1996 and 33% in 2013. however, women received salary 18% less than men. this gap had troubled women, including in saving for their retirement. the statistics on savings, investment and loan level shows a fairly significant gender gap. if there is a program to help women deal with the challenges they face, they will certainly receive more salary and save more. an empowered woman will have positive impact on the economy and improve better standard of living (bellet, 2018). the partnership between indonesia and australia in investing in women program shows that the contribution of umkm to indonesia‘s economy has reached 60% towards gross domestic product (gdp). this contribution cannot be separated from self-employed women whose number in 2018 has been 14.3 millions in which they contributed 9.1% to gdp pdb and 5% to export. the number of manpower absorbed was 116.73 millions workers. however, even with such a great contribution, msmes still had some obstacles in its way, including the access to financing in financial institutions (lantu, triady, utami, & ghazali, 2016) where journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ p.r. andarsari, m.n. ningtyas /journal of accounting and business education, 4 (1), september 2019 25 this could have been a determinant of msmes‘ success (indarti & langenberg, 2004). the data show that the participation level of msmes in financial institutions is still low, i.e. only 30% of them can access financing. this limited access to capital from financial institutions has something to do with debtors‘ less or even not bankable profile, leading to their feasibility aspect being ignored (suandi & susilo, 2011). this is because they find it hard to manage their money, particularly in recording their income and expenditure. meanwhile, the financial institution need financial statements which reflect the actual condition of msmes for providing their services (siregar & veronica, 2012). in snlki ojk (2016) publication, the financial literacy level in indonesia is still at 29.7%. this means they have no understanding nor trust in financial institution‘s services, financial products and services and have no skills in using these financial products and services. empirical studies find that financial literacy has positive impact on an individual's financial behavior and financial status. literate individual will be able to do well in such things as: budgeting, saving, controling spending (moore, 2003; perry and morris, 2005); managing debts (campbell, 2006; brown & graf, 2013), lusardi and tufano, 2015); managing household finance (bellet, 2018); participating in capital market (van rooij, lusardi et al., 2011; christelis, jappelli et al., 2010; yoong, 2010; baker, et., 2019); purchasing high-risk investment assets (bannier & neubert, 2016; bianchi, 2017); planning retirement (kumar, tomar, & verma, 2019; lusardi & mitchell, 2007, 2008); and most importantly successfully accumulating wealth (stango and zinman, 2009; bellet, 2018). from the perspective of business, the more literate an individual the more likely for them to access external funding and develop their businesses (hussain, salia, & karim, 2018). in other words, the greater an individual‘s financial knowledge the wiser their financial behavior would be. it is important for msme owners to have a good financial behavior since in addition to having to be careful in managing their personal finance, they have to manage their business finace as well. many msme owners think their sales increases, yet the profit they receive remains the same. also, many msme owners mix their personal and business finances. some of them even have no adequate financial recording. widayanti et al., (2017) suggest this is due to the low interests of msme owners to record and book each of the transactions they make and this will eventually make it difficult for them to monitor how their businesses are doing. in addition, the financial institution will also find it hard to minimize the default risk for the loan given to msmes. in dahmen & rodriguez‘s (2014) research, out of 14 msmes which is poorly-managed finance, there are 7 experience financial difficulties, 4 of which are owned by women. several financial issues found in msmes are interesting for further studies umkm to give some contribution in solving the problems encountered by msme owners in which most of them are not bound by financial planning, budgeting and financial control (fatoki, 2014). this includes womanpreneurs who also contribute to the state‘s economy substantially. they need to be empowered optimall by enriching their knowledge on finance. it is expected that doing so will allow them to improve their financial behavior. this is the starting point of the researcher‘s purpose to investigate the role played by financial literacy on financial behavior in woman entrepreneurs in malang municipality. . literature review and hypotheses mendes-da-silva (2016) in his research states that the term financial literacy has frequently been used as a synonym for financial education or financial knowledge. however, this construct is actually conceptually different since financial literacy has deeper meaning than financial education. thus, using the two terms interchangeably to mean the same meaning might lead to misunderstanding. financial literacy has two dimensions, namely understanding which represents personal financial knowledge from financial education and use which refers to management of personal financial knowledge. in this context, an individual might have financial knowledge, yet for them to be considered literate, they have to own the ability and self-confidence to implement decisions. therefore, financial literacy is more complex than merely the basic concept of financial education. p.r. andarsari, m.n. ningtyas /journal of accounting and business education, 4 (1), september 2019 26 in reference to ojk, there are four levels of financial literacy classification, namely: 1) well literate—more than 80%, having understanding and trust on financial service institution and financial products and services, including financial products and services-related features, benefits and risks, and rights and duties, as well as having the skills in using financial products and services; 2) sufficient literate—60-80%, having understanding and trust on financial service institution and financial products and services, including financial products and services-related features, benefits and risks, and rights and duties; 3) less literate—30%-60%, only having understanding on financial service institution, financial products and services; dan 4) not literate—less than 30%, having neither understanding nor trust on financial service institution and financial products and services, and having no skills in using financial products and services. this study uses financial literacy index based on definit-seadi-ojk (2013) where they refer to lusardi and mitchell‘s (2011) research. there are two 2 indicators, namely basic financial literacy and advanced financial literacy. however, to match the research subjects who mostly do not really understand capital market, the indicator used is only basic financial literacy. this basic financial literacy consists of 11 questions which include: 1) identity when opening an account; 2) minimum fund deposit when opening an account; 3) minimum balance in account; 4) guarantee of savings; 5) simple interest; 6) compound interest; 7) interest on loan; 8) discount; 9) inflation; 10) temporary value of money; 11) money illusion. this study uses dummy variable (1 and 0) if the respondent‘s answer is correct then they will be assigned with code 1 and 0 if it is wrong. financial behavior is associated with one‘s responsibility regarding their way of managing money. an effective financial management includes budgeting, assessing the importance of purchase and prioritizing needs and so on. the budgeting process is done to ensure that individuals can manage their financial obligations punctually using the income they receive (ida & dwinta, 2010). this financial behavior variable is measured using 8 question items modified from oecd-infe (international network on financial education), namely: 1) cautious in purchasing goods; 2) focus in using money; 3) saving; 4) paying bills punctually; 5) ready to take risk of an investment; 6) making budget; 7) making longterm financial plan; 8) controlling spending. the measurement scale uses likert scale, from ―never‖ (score 1) to ―always‖ (score 5). the empirical evidence shows that financial literacy has a positive impact on financial behavior. individuals with knowledge and ability in managing their finances well will shows a good financial behavior such as investing, saving, and using credit card. an empirical study by lusardi & tufano (2015) shows that people with low financial literacy are more likely to have problems with money. without adequate knowledge, entrepreneurs or msmes are more likely to be trapped in debts at high interests. furthermore, they will also be spared from informal lenders or loan sharks (oktavianti, hakim, & kunaifi, 2017). h1 : financial literacy has a positive influence on financial behavior. methods the data in this research are collected using direct survey method with questionnaire instrument to the research respondents, i.e. womenpreneurs in malang municipality. the sample is taken using purposive sampling technique, i.e. sampling based on a certain purpose. the criteria set by the research are 1) offering more than one types of products or services; 2) operating or having office in the research area; 3) respondents are the owners or managers who are person in charge for that business. the minimum number of sample determined by heir (1995) is the number of indicators multiplied by five, thus the minimum number of respondents required is 95 respondents. the respondents were collected by attending entrepreneurship seminars organizaed by entrepreneur communities in di malang such as mcf (malang creative fusion) and rpmr (rumah pengusaha malang raya). the researcher needs enumerator‘s help to collect the data. for hard-to-access msmes, the researcher would contact via p.r. andarsari, m.n. ningtyas /journal of accounting and business education, 4 (1), september 2019 27 telephone or give the quistionnaire online. the collected data are then processed using smartpls 3 to test the proposed hypotheses. the research instruments used also need to be tested for their validity and reliability. the validity test is performed to test whether the question items asked could measure accurately what is about to be measured and reliability test is used to measure the consistency of indicators of variables (ghozali, 2007). the measurement model or outer model with reflexif or formative indicators is analyzed by seeing the convergent validity of each indicator. any indicator with loading factor less than 0.50 will be discarded. the reliability of research constructs is assessed by seeing the value of its composite reliability and cronbach alpha. it is said to have a good reliability if the minimum value is 0.60. inner model captures the association between latent variables based on substantive theory. inner model is evaluated by seeing the variance percentage being explained as indicated by the value of r 2 . for dependent latent constructs, the measurement uses stone-geisser q square test by seeing the amount of its structural path coefficient. the estimation stability is evaluated using statistic t-test which is obtained through bootstrapping procedure. results respondent profile this research is addressed to msme owners in malang. of a total of 95 female msme owners from whom the data were collected, most of them run their businesses in food and beverage field. it is followed by those running their businesses in fashion. in terms of how long they have been operating, 42% womenpreneurs have run their businesses for 1-3 years. among these respondents, a fairly great number at 20% just begin to run their businesses (startup). and from the perspective of financial behavior, they score 3.76 (good) on average. table 1. descriptive analysis business line: percentage fashion 30.28% food and beverage 47.71% crafts 21.10% beauty 0.92% business age: startup 20.18% 1-3 years 42.20% 4-5 years 21.10% >5 years 16.51% business size: micro business 91.74% small business 0.92% medium business 1.83% total n 95 financial literacy mean 67,56% sufficient literate financial behavior mean 3,76 baik the mean financial literacy index of womenpreneurs in malang is shown in detail in the table below. the mean value of financial literacy index of these womenpreneurs is 67.56% or classified as sufficient literate. this means they have the understanding and trust on financial service institution as well as p.r. andarsari, m.n. ningtyas /journal of accounting and business education, 4 (1), september 2019 28 financial products and services, including the features, benefits and risk, and rights and duties related to financial products and services (ojk, 2014). they are said to be sufficiently literate since they have had the understanding and knowledge on finance yet lack the skills in using financial products and services. table 2. descriptive analysis of financial literacy code financial literacy category % 1 not literate 3.67% 2 less literate 22.94% 3 sufficient literate 42.20% 4 well literate 31.19% a person‘s financial literacy level is distinguished into four as shown in table 2 above. the well literate category in these respondents reaches to 31% of the total. in this stage, an individual has knowledge and trust on financial service institution and financial products and services, including their features, benefits and risks, and rights and duties related to financial products and services, and they have the skills in using financial products and services. most respondents belong to sufficient literate category, in which an individual has knowledge and trust on financial service institution and financial products and services, including their features, benefits and risks, and rights and duties related to financial products and services. in less literate category, the percentage is over 23% where respondents only have knowledge on financial service institution, financial products and services. the last categoty, not literate, means an individual has neither knowledge nor trust on financial service institution and financial products and services, and has no skills in using financial products and services. table 3. percentage of each financial literacy indicator no. indicator % correct answers 1 identity when opening an account 100.00% 2 minimum fund deposit when opening an account 95.41% 3 minimum balance in account 91.74% 4 guarantee of savings 55.05% 5 simple interest 62.39% 6 compound interest 25.69% 7 interest on loan 57.80% 8 discount 89.91% 9 inflation 49.54% 10 temporary value of money 42.20% 11 money illusion 53.21% in latent variables of financial literacy, there are 11 indicators or constructs which represent how a person can be said as having knowledge and understanding financial concept. the first question is basic knowledge related to banking. ―do you need an id card when you open an account in a bank?‖ all respondents answered this question correctly. most respondents answer incorrectly and say they have no idea when the sixth question was asked, i.e. in relation to compound interest. suppose you have a saving worth rp1,000,000 with an interest 4% per year. (assuming you do not pay administrative fee and you neither deposit nor withdraw money from your account), after two years, how much will you own in your account (including interest)? knowledge on interest (both simple and compound interests) is highly important to help the individual estimate the savings they will have in the future and helped them made profitable loan decision for themselves. p.r. andarsari, m.n. ningtyas /journal of accounting and business education, 4 (1), september 2019 29 evaluation of model goodness of fit based on the research purpose and specification, a test is conducted in stages (iteration) using smartpls 3, to obtain a fit test result. the result of conceptual model goodness of fit evaluation in figure 1 shows that the values of loading factors of some indicators are still below < 0.5 which mean they have to be dropped from the research model, namely fl1, fl4, fl6, fb2 and fb8. knowledge on identity when opening an account, guarantee of savings dan compound interest fail to execute its measuring function appropriately or, in other words, fail to represent the latent variable of financial literacy. the focusing on money use management and controlling money and controlling spending indicators in financial behavior fail to explain well in the latent variable. figure 1. output of smartpls 3 model analysis below is the result of model evaluation made after dropping several invalid indicators. the test result in table 4 shows that all outer loadings of construct indicators have loading values >0.5; thus it can be concluded that this measurement successfully meets the convergent validity. the discriminant validity result shows that the value of root square of average variance extracted (ave) is greater than 0.5. the reliability test result indicates a reliable result since the value of composite reliability (rc) was above 0.6. likewise, the value of cronbach alpha of both variables is over 0.6. for inner model q-square, it shows greater number than 0, thus it can be said that the model is feasible for estimation. table 4. evaluation of structural model goodness of fit index criteria criteria result critical value model evaluation outer model convergent validity indicator construct ≥ 0.5 fl3 2.379 valid fl5 0.946 fl7 0.678 fl8 2.241 fl9 6.190 fl10 4.433 fl11 5.580 fb1 2.991 fb3 1.791 fb4 8.379 fb5 1.305 p.r. andarsari, m.n. ningtyas /journal of accounting and business education, 4 (1), september 2019 30 fb6 8.172 fb7 8.268 discriminant validity (average variance extracted (ave) of each construct is greater than the correlation value between constructs) ave root square ave fl 0.255 0.5049 ≥ 0.5 valid fb 0.354 0.5949 composite reliability (rc) fl 0.613 ≥ 0.6 reliabel fb 0.676 cronbach alpha fl 0.706 ≥ 0.6 reliabel fb 0.699 inner model q-square fb 0.258 ≥ 0 fit the next step after model feasibility test is test of influence between latent variables. the test result shows that the t statistic value is 9.290 (see appendix) in which this influence is significant at 1% level (t statistic 9.290 > t table 1.984). it can therefore be concluded that the better people understand financial concept, the better they would in managing their finance. discussion the research result indicate that financial literacy has an influence on financial behavior. in fact, an individual‘s financial literacy plays an important role in shaping wealth equity. having good financial knowledge helps women to make wise decisions, saving more for retirement, manage investment carefully, and manage household finance better. on the other hand, less literate persons rarely make efficient choices and are more likely to cause more debts, save less and are more prone to fraud. thus, it is important to figure out to what extent women‘s understanding on basic financial concepts and to what extent their financial skills fail. in some other studies, it is found that financial literacy in women tends to be lower than in men (falahi & paim, 2011; atkinson & messi, 2012; bottazzi & lusardi, 2016; hasler, 2017; moon et al., 2014). this difference is hard to explain since no single satisfactory explanation can deal with the difference in financial literacy level between women and men (bucher-koenen et al., 2011). likewise, demographic difference also fails to explain well this gender gap (fonseca & et al., 2010). the result of statistic description processing above indicates that on average the financial literacy level in womenpreneur respondents is in ‗adequately literate‘ category. this means the respondents have knowledge and trust on financial service institutions and financial products and services, including features, benefits and risks, rights and duties related to financial products and services. however, they are less capable of and less skillful in utilizing these financial products and services. referring to the definition of financial literacy from lusardi & mitchell (2011a), financial literacy is definied not limited to merely knowledge, rather it involves self-confidence to do something. they find that women score lower than men when the option ―i don‘t know‖ is among the available choices. nevertheless, when this ―i don‘t know‖ option is removed, women score equally to men. this is consistent with asaad (2015) who states that financial confidence is a critical component in financial literacy. his research result indicates that individuals with high knowledge and self-confidence are more likely to make good financial decisions than those with low knowledge and self-confidence. however, overconfidence is not good either since they are more likely to overestimate their own knowledge accuracy and underestimate the risk they face. hence, even without even realizing it, overconfident individuals are more likely to be involved in risky financial behavior such as, among other things, borrowing money at high interest rate. understanding that self-confidence is equally important with knowledge, it is important for educational institutions and policymakers to prepare a more effective financial literacy initiative to p.r. andarsari, m.n. ningtyas /journal of accounting and business education, 4 (1), september 2019 31 improve daily financial decision making. the challenge then is to create an educational initiative which helps individuals find the right (no less and no more) self-confidence dose. the result of the hypothesis testing made is consistent with the research conducted by ida & dwinta (2010), robb & woodyard (2011), scheresberg (2013), siahaan (2013), brown & graf (2013), asaad (2015), grohmann, kouwenberg, & menkhoff (2015), hamdani (2018). whether a financial behavior is wise or not is tightly related to a person‘s knowledge on financial concepts. when this person knows and understand, then he/she will use the knowledge he/she has as the basis for making decision of the action he/she is about to take. one of the aspects in financial literacy is inflation-related knowledge. for example in inflation aspect, when a person knows and understands that the value of money gets lower and lower as time goes, then he/she will choose and decide the type of investment with a return abovethe inflation rate at that year. knowledge on inflation will also prevent a person from practicing more consumptive behavior. he/she will think that the money he/she owns is not to be spent only for today. the same applies to a person who wish to start a business. they are demanded to not just be capable of managing their personal finance, rather they need to manage their business finance as well. this is where financial knowledge plays its role for entrepreneurs to allow them to develop their business without having to deal with financial issues. another equally important aspect in financial literacy is knowledge on interest rate. in this aspect, if entrepeneurs decide to take a loan, when they understand well the interest concept then they are more likely to choose the loan with relatively low interest. this is in line with lusardi & tufano (2015) who suggest that non-literate person will more likely to take a debt at high interest rate. another benefit of financial literacy for entrepreneurs is it increase financing access at financial institution where in indonesia‘s case the participation is fairly low, i.e. only 30% can access the financing. this limited access to financial institutions has something to do with the debtor's less or even not bankable profile, making the feasibility aspect neglected (suandi & susilo, 2011). the financial institution need financial statements which reflect the actual condition for providing their services. yet, making these financial statements is something hard for them to do due to the lack of knowledge of financial management which includes financial recording (siregar & veronica, 2012). furthermore, an individual‘s behavior is not merely based on what they understand or know, rather it still has something to do with their self-confidence. knowledge drives a person‘s self-confidence to do something (ramalho & forte, 2019). a good financial behavior is the basic need for all people and entrepeneurs are not an exception. most people tend to learn their personal financial management as they grow older and through trial and error process, leading them to a difficult situation when they have been trapped in a poor financial behavior. some previous studies (xiao et al., 2008; mandell & klein, 2009; xiao & porto, 2017) conclude that the best way of fixing behavior at older age is by teaching a good financial education since childhood. knowledge on financial literacy ought to be given as early as possible to allow them to apply it better in their daily life (hamdani, 2018). financial education at schools could take youth‘s financial ability forward. unfortunately, in indonesia personal finance education is still rarely found, be it at universities let alone elementary schools. making personal financial education a compulsory course at universities will equip the youth with the necessary skills and knowledge to develop in today‘s increasingly complex financial environment. conclusion the research result indicates that womenpreneurs in malang municipality has ‗good enough‘ financial literacy. the result of test of influence also indicates that financial literacy has a positive influence on financial behavior. the higher a person‘s financial knowledge, the better and wiser their financial behavior would be. financial knowledge or literacy is needed as the basis for making decisions in daily life, regardless whether or not they run a business. the limitation of this research is that its subjects cover only womenpreneurs in malang municipality. the recommendation for further research is, p.r. andarsari, m.n. ningtyas /journal of accounting and business education, 4 (1), september 2019 32 among other things, to widen the scope of sample (not limited only to malang municipality), modify the model 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(2011). financial illiteracy and stock market participation: evidence from the rand american life panel. financial literacy: implications for retirement security and the financial marketplace, 76. m.r. palil, s. razif/ journal of accounting and business education, 7 (1), september 2022 35 tax planning practices amongst tax agents: evidence from malaysia mohd rizal palil 1 syahirah razif 2 12 faculty of economics and management, universiti kebangsaan malaysia, 43600 bangi, selangor, malaysia. email: mr_palil@ukm.edu.my doi: http://dx.doi.org/10.26675/jabe.v7i1.20169 abstract: this study explored the complexity of corporate tax planning practised by the tax agents. in malaysia, studies on tax investigations were limited due to the high information privacy factors. this study aimed to reveal the tax planning strategies through frequent adjustments made by the companies helped by the tax agents. tax management itself is a way to properly meet the tax obligations, but the paid amount of tax can be reduced to obtain the expected profits. tax planning leads and attracts more public attentions. a survey among 106 tax agents in malaysia working in big-four companies revealed that tax planning appeared to be significant suggested by the tax agents as the companies had limited knowledge on tax regulations and law. this study also found an interesting finding in which companies heavily relied on the tax agents in minimising their yearly tax incidence although the tax planning might violate the current tax laws. this study recommends that the essential elements of designing a good tax system will help restrict the conditions which enable the tax evasion for the future development. this study considered the theoretical developments and related empirical findings on the interrelated issues to measure the tax planning and possible causes and results of corporate tax evasion. this study presented some ideas for further research to examine the unexplained topics on tax planning. in addition, the research findings also signaled to the policy makers to focus more on the integrity of tax agents to increase the compliance. article history received: 31 march 2021 revised: 8 august 2022 accepted: 14 august 2022 keywords tax planning, tax agent, malaysia citation: palil, m.r., & razif, s. (2022). tax planning practices tax agents: evidence from malaysia. journal of accounting and business education, 7(1), 35-44 introduction the terms tax planning and tax evasion are used interchangeably in many literatures. these two terms’ main difference is the degree of law violation in the action. besides, tax planning is defined as corporate action of reducing tax liability without violating any tax law (graham et al., 2014). the complexity of a tax system, such as multiple laws to be complied with, as in the process of filing income tax to the person in charge of income tax return, lack of clarity of the terms and overlapping foreign tax system are factors leading to increasing cases of tax planning in taxation system (abdul hamid, 2004). taxpayers can act aggressively to reduce taxes to sort out conditions that may not be legally justified or otherwise as the consequence of complexity of the tax system leading to unclear situation or circumstance. journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ m.r. palil, s. razif/ journal of accounting and business education, 7 (1), september 2022 36 to overcome this problem, tax agents are appointed by taxpayers, primarily from the business sector, for advice and management of their tax. tax agent is important for in taxpayer’s improved tax compliance due to changes in global tax position. asher and rajan (2001) stated that the globalization process has changed accounting firms’ level of services, such as audits and guarantees, financial advice, tax planning and administrative and compliance methods. there are basically two tax practices, tax planning and tax evasion, the first being law abiding and the second illegal. tax planning signifies the wisdom in organizing tax affairs legally for tax reduction, while tax evasion is a deliberate, non-compliant act to lower tax payments (takril & sanusi, 2014). it is a tax agent’s job to stimulate aggressive tax planning and reduce customer’s tax liabilities, and these can be done by manipulating loopholes and ambiguities in tax law using their expertise and knowledge in tax accounting (takril & sanusi, 2014). tax evasion and tax avoidance are considered the same by many taxpayers and believed to be as tax planning, thus deemed permissible by law. tax planning is limited compared to tax avoidance, however many tax agents would suggest tax evasion to their clients for lower tax liabilities. therefore, for a clearer insight into this issue, this study attempt to examine tax planning practices among tax agents in malaysia. tax planning unclear and often interpreted differently by taxpayers and tax agents (kirchler, hoelzl, & wahl, 2007). the importance of tax planning among companies can essentially lessen tax liability that the companies bear and increase the value and quality of tax paid. moreover, lower number of tax audits and high tax incidence may encourage tax planning practices. previous studies (armstrong, blouin, & larcker, 2012; takril & sanusi, 2014; isa, yussof, & mohdali, 2014; walpole, 2009) recommend in-depth exploration of this topic to observe the extent of corporate income taxpayers’ compliance and responsibility. do companies perform their responsibilities honestly and transparently in reporting their annual income or, amongst those, who are trying to cheat or avoid taxes? why do companies avoid tax while they enjoy the same benefits and facilities that other taxpayers gain? do tax agents encourage the companies to practice tax evasion or tax avoidance? this study aimed to investigate tax agents’ influence on malaysian companies’ tax planning practices and identify the factors of malaysian companies’ tax planning through agents. to achieve the two objectives, this study developed two research questions to explore tax agents’ behaviors in giving customers advice and consultancy. the questions are: first, what do malaysian tax agents’ plan in tax evasion? second, what factors from tax agents influence malaysian companies’ tax planning practices? this study is divided into six parts. the first part is introduction that discusses the background of the study. the second part reviews past studies on tax planning in various dimensions. the third part discusses the research method. the fourth part explains the data analysis. the final part discusses the study’s result and conclusion. literature review and hypotheses companies’ aggressive tax planning will eventually have tax collection decreased. previous studies demonstrated that companies greatly relied on tax agents’ advices in deciding tax planning and the tax planning would finally be decided by tax agents. moreover, the relationship between taxpayers, tax agents and the government is considered significantly affecting tax compliance. for instance, nkundabanyanga et al. (2017) conducted a research on tax treatment in a developing country, uganda. their observation found that tax compliance improves when the government was efficient, (e.g. the country's financial affairs’ were well managed), has a transparent tax system, (e.g. in case of sources and use of tax money) and secures taxpayers’ voice and rights (from basic human aspects). nkundabanyanga et al. (2017) findings that were also previously supported by ortega hortelano, vassallo magro, and pérez díaz (2016) prove that government’s improved functions amongst latin american countries can help motivate people to pay taxes. the situation is then complicated when tax payment and evasion are also associated with tax agent’s level of tax knowledge. generally, if a company finds problems or lacks of knowledge of tax calculation, its tax evasion tendency is very high. this is supported by saad (2011, 2014) that tax agent’s technical knowledge of taxation is imperative to ensure tax compliance, or otherwise lack of knowledge m.r. palil, s. razif/ journal of accounting and business education, 7 (1), september 2022 37 will be taken as the reason for tax evasion. in addition, a recent study by bornman & ramutumbu (2019) explained that there were three main components in high tax compliance, thus tax evasion occurrence is avoided, namely, (1) general knowledge of tax, (2) knowledge of tax procedures and (3) tax agent’s knowledge of tax law. despite companies’ insufficient tax knowledge, corporate taxpayers’ reliance on their appointed tax agents for their (tax agents’) knowledge and experience in planning and handling corporate tax reporting is great. according to isa, yussof, and mohdali (2014), two main factors expecially make tax agents’ role important in helping companies in malaysia, namely internal and external factors. internal factors include reasons, such as companies’ lack of technical knowledge of taxation, complexity of tax affairs and cost-effective factor for corporate taxpayers to hire tax agents compared to handling tax issues by themselves (isa, yussof, & mohdali, 2014). external factors include the need for professional opinions and advice on taxes, latest update of tax information and advice on the best tax planning (isa, yussof, & mohdali, 2014). in line with these goals, the study conducted by isa, yussof, and mohdali (2014) in malaysia on various sectors show that majority of companies hired tax agents due to external factors. the following part discusses issues that may lead to tax planning by tax agents. transfer price and tax planning transfer pricing is an accounting practice representing the prices that one division to charge other division within a company for any goods and services provided. transfer pricing defines the right for setting, analysis, documentation, and adjustment of charges between related parties for goods, services, or use of property (including intangible property). this issue in international taxation keeps taxpayers and tax authorities confused. this usually occurs when two companies of the same multinational group perform trade activities with each other. according to bartelsman & beetsma (2003), difference in corporate tax rates of one country with another caused companies to divert their income, and the loss of over 65% additional tax revenue amongst industries in the organisation for economic co-operation and development (oecd) countries stemmed from the income shift. using transfer pricing tactics, companies in the united states transferred their revenue to foreign affiliates with lower tax rates. barker and mayer (2017) also found that flexible transfer pricing on tax code in the united states’ internal revenue code allowed companies to adopt transfer pricing tactics to avoid taxes. this in turn concludes that avoidance (in the tax code) gives companies the chance to evade taxes. h1: transfer pricing is significantly used by tax agents in tax planning charity/donation contribution and tax planning the oecd (2009: 12) reported that evidence or cases existed that illustrated how charitable contributions are used as a tax evasion tactic. amongst them are concealing information of permanent employees’ salary as voluntary workers, issuance of false payment slips as giving donations, manipulation of assets’ value or donated cash and so on. for instance, donated assets’ value was manipulated in the united kingdom for higher tax deductions (oecd, 2009). the tax research uk (2013) reported that a large company, the cup trust, was believed to be involved in tax planning activities. the company was ranked 14th for contribution according to its 2011 income. however, the issues surfaced when the company demanded higher tax deduction despite the value it had donated. this concludes that certain donors use improper resources or deliberately use donation as a reason for tax deduction. h2: charitable contribution is significantly used by tax agents in tax planning bad debt, prepaid expense and tax planning section 33 of income tax act of 1967 indicates that tax deduction is not available for provision of bad debt, but only for real bad debt. therefore, some companies may manipulate the amount of bad debt instead of provision of bad debt for tax deduction and presume that they will not be audited by tax m.r. palil, s. razif/ journal of accounting and business education, 7 (1), september 2022 38 authorities later. in addition, they are even willing to pay penalty if they were audited by tax authority. the study by poli (2015) found that italian companies tended to report bad debt for maximum tax deduction. if the bad debt expense is lower than the total tax deduction provision, the companies will attempt to increase the bad debt expense for the maximum amount tax deduction. the opposite occurs when bad debt expenses exceed the total allocation of tax deduction. companies will take deduction for various business-related costs before filling out annual tax plan. companies will reduce tax revenue, for example, if they want to reduce current year income tax, and some expenses of new financial year will be paid in current year. h3: bad debt, provision of bad debt and prepaid expense are significantly used by tax agents in tax plan depreciation and tax planning irb may state that an asset’ life expectancy is seven years regardless of the company's circumstances. irb regulation also allows companies to accelerate their depreciation expenses. accelerated depreciation means higher depreciation in the first few years and lower depreciation in the last years of asset life, referred to as accelerated method. this saves income tax payment in the first years of asset’s life but will result in more taxes in later years. profitable companies will find accelerated depreciation more attractive (kulp & hartman, 2011). kozub-skalska (2016) conducted a study on how tax risk managers adopt depreciation to their advantage in accounting policies as an instrument of tax optimisation. the study found that the flexibility in depreciation calculation method gives the companies the chance to avoid taxes. they argued that the tax advantage from depreciation is due to the level of taxable income itself. kozub-skalska (2016) argued that depreciation method is selected be based on the company’s economic/financial implications. h4: depreciation expense is significantly used by tax agents in tax planning. company acquisition and tax planning a company can reduce its tax by acquiring a company with accumulated loss, in which the higher the loss the company bears, the higher the value of tax avoidance and reduction allowed is (dash, 2010). this is the case when the acquiring company is able to spread its profit to the acquired company. the companies involved in such acquisition will have next year’s unused capital losses and allowances absorbed in current or next-year assessment unless the company is inactive. according to section 140 of the income tax act 1967, if a company acquisition is performed based on reasonable economic aspect, the acquisition is likely to obtain tax saving. this is also supported with perceived misuse of tax law, in which the commitment to have debt financing to acquire a company is only for maximum tax deduction (brewer et al. 2002). h5: company acquisition significantly is used by tax agents in tax planning. methods this study was conducted through survey on malaysian tax agents. the following section discusses variable selection and measurement, hypothesis development and population, sampling frame and data collection method. variable selection and measurement although many variables have been tested by researchers previously, this study only focused on five determinants (iv) which quite likely affect tax planning (dv) and are widely used by tax agents to minimise corporate tax liability. transfer pricing was measured using five questions developed by barker and mayer (2017), which were measured using five-point likert scale (from strongly disagree to strongly agree). charitable contribution was measured using five questions developed by webley et al. (1991), m.r. palil, s. razif/ journal of accounting and business education, 7 (1), september 2022 39 which were measured using five-point likert scale (from strongly disagree to strongly agree. bad debt and prepaid expense were measured using five questions developed by poli (2015), which were measured using five-point likert scale (from strongly disagree to strongly agree). kulp and hartman (2011) were taken as the main reference for depreciation measurement, with which five narrative questions were measured using five-point likert scale (from strongly disagree to strongly agree). lastly, the fifth independent variable, company acquisition, was measured with five questions developed by belz et al. (2013). meanwhile, the dependent variable, tax planning, was measured using seven questions based on kasipillai (2003). population, sampling frame and data collection method this study’s population was all tax agents in the federal territories of kuala lumpur and selangor. this population was chosen since the federal territories of kuala lumpur and selangor were amongst the fastest growing cities and the centres for most malaysian companies. as per table 1, there were 664 tax agents in kuala lumpur and 408 tax agents in selangor registered with the irb. the samples were four largest tax agents from kuala lumpur and selangor registered with irb, namely pricewaterhouse cooper, ernst & young, kmpg and deloitte. table 1. study population company registered with lhdn number of certified tax agents ernst & young 392 pricewaterhouse cooper 313 kpmg 185 deloitte 182 the use of these stratified random sampling probabilities ensures that the samples selected were clear and distributed based on the same criteria to represent the population (bell, bryman, & harley, 2018). the study samples comprised of tax agents around klang valley, selangor, malaysia. there were totally 350 questionnaires distributed to tax agents working in the big-four audit firms, namely pricewaterhouse cooper, ernst & young, kpmg and deloitte touche tohmatsu using the ‘snow ball’ sampling method and totally 106 questionnaires were successfully collected and analysed (30.28% response rate). the snowball sampling method is believed to be the best way for respondents from the same group of practice as suggested by bell, bryman, and harley (2018) and black & babin (2019). the data were analysed using spss, covering descriptive and multiple regression analyses. results and discussion this section discusses the data analysis. the survey conducted involved 106 respondents, composed of 54 (50.9%) male and 52 (49.1%) female respondents. table 2 shows that male respondents are more than the female respondents with a difference of 1.8%. table 3 shows that acquiring other company shows the highest mean value of 4.18 with standard deviation of 0.644. meanwhile, the second highest variable is shown by bad debt and prepaid expense variable with mean value of 4.17 and standard deviation of 0.669. charitable contribution has the third highest mean value of 3.73 with standard deviation of 0.763. meanwhile, depreciation variable shows the fourth highest mean value of 3.49 with standard deviation of 0.759. price shift variable has the lowest mean value of 3.04 with standard deviation of 0.729. based on the results in table 3, the three main tax planning practices performed by companies as suggested by tax agents were company acquisition, bad debt and prepaid expense and charitable donation. m.r. palil, s. razif/ journal of accounting and business education, 7 (1), september 2022 40 table 2. demographics of tax agent respondents category description frequency (n = 106) percentage (%) gender male 54 50.9 female 52 49.1 age 20 – 30 67 63.2 31 – 40 24 22.6 41 – 50 12 11.3 51 – 60 3 2.8 race malay 40 37.7 chinese 46 43.4 indian 20 18.9 position executive 32 30.2 senior executive 50 47.2 manager 16 15.1 senior manager 4 3.8 director 4 3.8 highest level of study diploma 11 10.4 bachelor 93 87.7 master 2 1.9 institutional qualification local 46 43.4 overseas 60 56.6 tax-related experience < 1 year 1 0.9 1 – 3 years 22 20.8 3 – 5 years 20 18.9 5 – 8 years 34 32.1 8 – 10 years 3 2.8 > 10 years 26 24.5 tax agent’s monthly income < rm3,000 16 15.1 rm3,000 – rm4,999 9 8.5 rm5,000 – rm6,999 19 17.9 rm7,000 – rm8,999 28 26.4 rm9,000 – rm10,999 13 12.3 rm11,000 – rm12,999 13 12.3 rm13,000 – rm14,999 1 0.9 > rm15,000 7 6.6 table 3. descriptive statistics average standard deviation max min confidence interval (95%) lower upper transfer pricing charitable donation 3.04 3.73 0.729 0.763 1 2 5 5 2.90 3.58 3.18 3.87 bad debt and prepaid expense depreciation 4.17 3.49 0.669 0.759 2 2 5 5 4.04 3.34 4.30 3.64 company acquisition 4.18 0.644 2 5 4.06 4.30 further analysis result in findings as presented in table 4 based on the following mathematical equations: y = β0 + β1x1 +β2x2 + β3x3 +β4x4 +β5x5 + e m.r. palil, s. razif/ journal of accounting and business education, 7 (1), september 2022 41 y = 1.991 + 0.351 transfer pricing – 0.063 charitable contribution – 0.288 bad debt and prepaid expense + 0.317 depreciation + 0.114 company acquisition + e based on the equations above, each factor’s coefficient can influence tax planning. this situation explains that in case of 1 increment of (x1) transfer pricing, then y (tax planning) will increase by 0.351. meanwhile, in case of 1 increment of (x2) charitable contributions occurs, then y (tax planning) will decline by 0.288. then, in case of 1 increment of x3 (bad debt and prepaid expense), then y (tax planning) will decline by 0.288. in case of 1 increment of x4 (depreciation), then y (tax planning) will increase by 0.317 and in case of 1 increment of x5 (company acquisition), then y (tax evasion) will increase by 0.114. this analysis also shows that transfer pricing, depreciation and company acquisition positively affect y (tax planning), while charitable contribution, bad debt and prepaid expense negatively affect y (tax planning). the highest predictor influencing tax planning is transfer pricing. this situation is shown with beta value of 0.351, while the lowest predictor influencing tax planning is charitable contribution with a beta value of 0.063. table 4: multiple regression analysis r r 2 b p dependent variable: tax planning independent variables: 0.57 0.325 transfer pricing (x1) 0.351 0.000 charitable donation (x2) −0.063 0.440 bad debt and prepaid expense (x3) −0.288 0.025 depreciation (x4) 0.317 0.000 company acquisition (x5) 0.114 0.344 table 4 shows that the three factors (transfer pricing, bad debt and prepaid expense and depreciation) significantly influence tax evasion, with significance value respectively 0.000, 0.025 and 0.000, lower than the alpha 0.05, thus they support h1, h3 and h4. charitable contribution and company acquisition show insignificant values respectively of 0.440 and 0.344, higher than alpha 0.05, rendering h2 and h5 negative. table 5 shows the statistics of the factors of tax evasion by malaysian companies through tax agents. there are nine factors identified in this analysis, including lack of general tax-related information, lack of tax intensive, weak relationship between taxpayer and stakeholder, tax growth, high tax rate, tax system’s fairness and efficiency, lack of willingness to pay taxes, poverty and lack of tax calculation skill. the analysis results show that the lack of attitude/awareness to pay taxes shows the highest mean value of 3.58 with standard deviation of 0.645, while the second highest factors causing companies to avoid paying taxes their lack of tax calculation skill and poor relationship between taxpayer and stakeholder (irb) with mean value of 3.42 and standard deviation of 0.601. the third factor influencing the companies to avoid paying taxes is high tax rate with mean value of 3.41 and standard deviation of 0.687. tax system’s fairness and efficiency is ranked fourth with mean value of 3.34 and standard deviation of 0.675. lack of tax intensive is ranked fifth with mean value of 3.32 and standard deviation of 0.655. this is followed by lack of extensive campaign and public information, especially to companies that should be potential taxpayers, with mean value of 3.20 and standard deviation of 0.668. the lowest factor influencing tax planning is poverty, in which the companies pay daily expenses and needs more, with mean value of 3.15 and standard deviation of 0.513. finally, this study determines that the factor and cause of companies’ tax planning through tax agents is their lack of awareness of obligation to the country. m.r. palil, s. razif/ journal of accounting and business education, 7 (1), september 2022 42 table 5: explanatory statistics for tax planning factors average median mod standard deviation variance max min provision of information 3.20 3 3 0.668 0.446 2 4 lack of tax incentive 3.32 3 3 0.655 0.429 2 5 weak relationship 3.42 3 3 0.645 0.417 2 5 tax growth 3.25 3 3 0.553 0.306 2 5 high tax rate 3.41 3 3 0.687 0.472 2 5 tax system’s fairness and efficiency 3.34 3 3 0.675 0.455 2 5 lack of tax morality 3.58 4 4 0.645 0.417 2 5 poverty 3.15 3 3 0.513 0.263 2 4 lack of tax calculation skill 3.42 3 3 0.601 0.361 2 5 the paper’s main objective was to find the factors affecting malaysian companies’ tax planning with tax agents as respondents. the study found that tax agents played a significant role in determining malaysian companies’ tax planning. based on the findings, it is evident that tax agents strongly advised the companies to reduce their tax liability through tree main factors: transfer pricing, bad debt and depreciation (table 4). the other two variables, namely charitable contribution, and business acquisition, seem insignificant. from another perspective, as the main samples were tax agents of big four companies that usually dealt with multinational companies, the main significant factors to determine tax planning was transfer pricing, instead of the other determinants. the results of this study may vary if the respondents were of medium or small sized accounting firms. in addition, charity contribution factor has low contribution to tax planning. this means that tax planning is not driven by donation since it is either in the form of goods or cash, which is one valid way to obtain tax deduction in malaysia under section 44 of income tax act of 1967. the irb has generally listed the organisations or registered the institutions qualified to have tax deduction through donation. however, for verification purpose, a letter of tax deduction confirmation issued by the irb and one from the beneficiary must be attached as evidence of actual donation. tax administrator also plays a significant role in determining tax planning and compliance in a country. the study (table 5) shows that the main factors affecting tax planning (from tax administrator’s perspective) are lack of tax morality, lack of tax calculation skill, weak relationship, and high tax rate. tax morality becomes the main factor in this situation, thus the aggressive tax planning stems from tax agents’ internal factor or it is their intention to do tax planning. the government should collaborate with the irb to take proactive measures in enforcing policies and guidelines in order to regulate transfer pricing, even if transfer pricing tactics cannot be eliminated entirely. one measure to take is to enter into agreement with relevant countries to solve the transfer pricing issue. the government can also issue guidelines for tax agents in facing companies’ transfer pricing situation. taking example of the internal revenue service’s (irs) approach in the united states, a more stringent guideline was issued by the irs to minimise loopholes in the tax code as the consequence of transfer transactions (barker & mayer, 2017). therefore, the irb can also take similar measures by examining and reviewing the weaknesses found in malaysian income tax act 1967. moreover, lack of tax morality, constituting the companies’ lack of attitude towards or awareness of paying taxes to the government, becomes profound. it is then necessary to make effort to install positive values in the community and companies, including the awareness of the importance of taxes for the national development. this is as reported by horodnic (2018) in his study related to the factors influencing the taxpayers’ morals, such as trust, government’s performance, level of corruption, inflation rate and so on. in this case, the government must take active measures to attract the people’s confidence and trust through good relations between taxpayers, tax authorities and the government. m.r. palil, s. razif/ journal of accounting and business education, 7 (1), september 2022 43 conclusion this study concludes that tax agents’ role is important in determining tax planning practices in malaysia. professional tax agents with high integrity and professionalism may give the companies profound tax planning strategies (tax avoidance) in order to minimise their tax incidence. this study contributes to providing not only malaysian, but also foreign, tax administrators insight that tax agents’ role in tax planning is very important and, to minimise the companies’ tax planning, they are to focus on tax agents’ morals. although tax planning is legal, however, in the long run, the government will suffer a long-term tax loss that will affect the fund available to develop domestic economy. despite the contribution, this study still has its limitations, which can be solved in further research. further research should consider more extensive range of tax agents, including medium and 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(1991). tax evasion: an experimental approach. paris: cambridge university press. s. sulastri, i. u. kasanah/ journal of accounting and business education, 5 (2), march 2021 21 does emotional intelligence and religiosity affect the ethical judgment of accounting students? sulastri 1 ika uswatun kasanah 2 1,2 accounting department, faculty of economics, universitas negeri malang, indonesia email: sulastri.fe@um.ac.id doi: http://dx.doi.org/10.26675/jabe.v5i2.15506 abstract: this study aims to determine the effect of emotional intelligence and religiosity on the ethical judgment of accounting students. the sample in this study amounted to 210 accounting student respondents. the sample in this study was taken by the purposive sampling technique. the data in this study were collected using a questionnaire and then analyzed using descriptive statistical analysis and multiple linear regression. based on the research results, it is known that emotional intelligence and religiosity have a significant positive effect on the ethical judgment in accounting students. this means that the higher the level of emotional intelligence and the level of religiosity of students, the more assertive they will be in making an ethical judgment. thus, based on the results of this study, it is hoped that educational institutions, especially at the university level, will provide services and training to accounting students to improve their emotional intelligence and religiosity. also, companies can add indicators of emotional intelligence and religiosity in recruiting accounting staff and corporate auditors, to increase the company's credibility and integrity in the future. article history received: 12 august 2020 revised: 4 january 2021 accepted: 18 january 2021 keywords emotional intelligence, religiosity, ethical judgment introduction in recent years, several cases of ethical misconduct committed by accountants have been reported publicly. accountants are responsible for safeguarding the public interest and ensuring good financial management of both the public and the private sectors to contribute to the nation's economy (ismail & rasheed, 2019). if an accountant fails to apply good ethical standards in the workplace, it will hinder the commitment of the profession to serve the public interest (keller et al., 2007). several cases of accounting scandals occur because accountants do not make ethical judgments and ultimately lead to actions that violate the principles of the accountant's code of ethics. cases of violations of the professional ethics of accountants have occurred both abroad and domestically. one of them is carried out by the multinational british telecom company. in 2017 british telecom italia was proven to have manipulated the value of company profits by falsifying contract renewals and invoices, and creating fake transactions with suppliers (reuters, 2019). british telecom's citation: sulastri, s.,& kasanah, i.u. (2021). does emotional intelligence and religiosity affect the ethical judment of accounting students?. journal of accounting and business education, 5(2), 21-30 journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v5i2.15506 s. sulastri, i. u. kasanah/ journal of accounting and business education, 5 (2), march 2021 22 auditor, pwc (pricewaterhouse coopers), was also investigated for this scandal for alleged fraud in their audit (economica, 2019). the occurrence of these ethical violation cases has created a crisis of trust in the accounting profession and tarnished the reputation of accountants in the eyes of the public. it also provides evidence of the important role of ethics in the accounting profession. the ethical standards of accounting students currently enrolled in tertiary institutions reflect the ethics of the accounting profession in the future (ismail & rasheed, 2019). higher education is not only responsible for producing competent and insightful future accountants, but also must have good ethical standards and social responsibility. the importance of understanding the factors that shape the ethical standards of future accountants will help educational institutions develop appropriate ethics curricula for students and help companies develop appropriate ethics training for their employees (keller et al., 2007). various ethical problems have occurred in the scope of students such as cases of academic fraud including cheating during exams, copying answers belonging to friends, plagiarism, leaving signatures for attendance, and many things that include the criteria for academic fraud (sagoro, 2013). students commit various acts of academic cheating because of the desire to get high scores. even though there are still many ways that can be done to get high scores such as always attending every meeting, being active in class, collecting assignments on time, and studying hard. however, these students did not make ethical judgments so that they ended up committing unethical acts, namely academic fraud. ethical judgment is important in influencing individual ethical decision-making processes when dealing with various ethical dilemmas including during the learning process at the college level. if the individual loses his view of ethical values, it can result in unethical actions like the case above. accounting students will then become accountants who occupy various strategic positions in the financial sector, both in government and private (sagoro, 2013). as an accountant, in carrying out its role, you will be faced with various ethical dilemmas whose alternative solutions are conflicting. in situations like this, an accountant needs ethical judgment to make a decision. accounting students as the next generation of the accounting profession ultimately also need to make an ethical judgment as a basis for ethical decision-making in facing various ethical dilemmas in the future. individual ethical judgment is influenced by many factors including the level of emotional intelligence. a manager who has a higher level of emotional intelligence believes that action must not deceive or harm others, in contrast to a manager with a lower level of emotional intelligence who tends to be willing to take action with negative consequences (angelidis & ibrahim, 2011). emotional intelligence also significantly affects individual ethical behavior (deshpande & joseph, 2009; mesmer-magnus et al., 2008). the aicpa (american institute of certified public accountants) and the institute of management accountants also state that emotional intelligence is an important factor influencing the success of an accountant (akers & porter, 2003). emotional intelligence has a positive relationship with ethical judgment, someone who can understand the emotional state of those around him can direct his ethical judgment towards a more ethical one (ismail & rasheed, 2019). emotional intelligence has a strong impact on auditors' ethical judgment (ismail, 2015) and accounting students (ismail & rasheed, 2019). another factor that influences ethical judgment is religiosity (walker et al., 2012). as we know, indonesia is known as a country where the majority of the population believes in god. this is also reflected in the 1st principle of pancasila, which reads god almighty. most indonesian people make god's decree as a source of law. thus, religiosity can influence individual ethical decisions because there are rules that serve as guidelines in judging something right or wrong. individuals who hold strong religious values will be more ethical in making ethical judgments (resty, 2018), but different from helmy (2018) who stated that religiosity does not affect ethical judgment. it is known that in previous research, several differences in research results have been found. this becomes one of the reasons for the need to re-examine the factors that influence ethical judgment. this study not only focuses on discussing the effect of emotional intelligence on ethical judgment but also examines ethical judgment in terms of religiosity in accounting students. an accounting student is a prospective accountant who ultimately needs ethical judgment as a basis for ethical decision-making in s. sulastri, i. u. kasanah/ journal of accounting and business education, 5 (2), march 2021 23 facing various ethical dilemmas in the future. research on the ethical judgment in accounting students is considered important to provide an overview of accountants' ethical decisions in the future. literature review and hypotheses theory of moral development kohlberg (1984) argued that individual moral development is influenced by the process of thinking and arguing. there are three levels of moral development according to kohlberg in (nurhayati, 2006) namely pre-conventional, conventional, and post-conventional, which at each level consists of two stages as follows. at the first level, namely the conventional level, individual morality is oriented towards physical impacts rather than psychological impacts and is oriented towards a sense of submission. individual ethical behavior is based on external controls, on things that are commanded and prohibited. the preconventional level is the level for the majority of children under 10 years of age (nurhayati, 2006). at the pre-conventional level, it consists of two stages, namely the orientation stage of obedience and fear of punishment and the stage of the orientation of naive egoistic/instrumental hedonism. furthermore, at the conventional level, an action is considered good if it meets the expectations of others. at this level, individuals behave not only to fulfill certain expectations or social order but also to appear loyal and want to identify themselves from a community group. individuals also try to actively build good relationships between themselves and the people around them. the conventional level is the level for the majority of adolescents and adults (nurhayati, 2006). there are two stages at the conventional level, namely the stage of good children's orientation and the stage of orientation to the morality of authority and social rules. at the third or final level, namely the post-conventional level, moral value is defined as independent from a group, regardless of whether the individual is a member of a group or not. individuals strive to obtain moral values that are more certain and have been recognized by the wider community and are universally applicable. the post-conventional level is the level achieved by several adults over the age of 24 years (nurhayati, 2006). at the post-conventional level, it is divided into two stages, namely the morality orientation stage of the social contract and individual rights and the moral orientation of the principles that apply universally. the theory of cognitive moral development states that every individual experiences various moral stages which are defined as a series of stages of cognitive moral development (kohlberg, 1969). individuals who pass through the stages of moral development will be able to make ethical considerations, while individuals who fail to go through the stages of moral development will be less or even unable to make ethical considerations (aziz & cahyonowati, 2015). this means that individuals with higher levels of moral development will be more assertive in making ethical judgments. ethical judgment ethical judgment is the process by which a person has acknowledged ethical issues and considered and determined which alternative is the most ethical to solve the problem (hunt & vitell, 1986). ethical judgment leads to making judgments about what actions should be done ethically right and right (helmy, 2018). this means that ethical judgment is a process of determining which action is the most ethical in facing an ethical dilemma. rest in 1983 proposed a four-component framework for examining the development of individual moral thought processes and behaviors, namely ethical sensitivity, ethical considerations, ethical motivation, and ethical character (chan & leung, 2006). the four components describe ethical decisionmaking and individual behavior through various processes, one of which is ethical considerations (suliani & marsono, 2010). if an individual fails in making ethical judgment then it will also affect the individual's ethical actions and behavior. s. sulastri, i. u. kasanah/ journal of accounting and business education, 5 (2), march 2021 24 emotional intelligence emotional intelligence is defined as a part of social intelligence that involves the ability to monitor the feelings and emotions of a person and others, and use this information to direct their thoughts and actions (salovey & mayer, 1990). according to salovey & mayer (1990), emotional intelligence has four different dimensions viz, self emotional appraisal (sea), others emotional appraisal (oea), regulation of emotion (roe), and use of emotion (uoe). the self emotional appraisal (sea) or self-assessment of emotions related to the ability of individuals to understand the emotions that exist within them and be able to express these emotions naturally (wong & law, 2002). someone who can feel their emotions more quickly and accurately tends to be better at expressing those emotions to others. furthermore, others emotional appraisal (oea) is an assessment and recognition of the emotions of others about an individual's ability to understand the emotions of those around him (wong & law, 2002). a person who has high oea abilities will be more sensitive to the feelings of others. the regulation of emotion (roe) is related to the regulation of emotions in themselves and the ability of individuals to control their emotions, which allows them to avoid prolonged psychological stresses (wong & law, 2002). the use of emotion (uoe) is the management of emotions in performance related to how an individual manages their emotions and uses them for positive activities (wong & law, 2002). religiosity glock & stark (1965) in (pamungkas, 2014) defines religiosity as an integrated system of beliefs, lifestyles, ritual activities, and institutions that give meaning to human life and direct humans to sacred values or the highest values. glock & stark in (nasikhah & prihastuti, 2013) divides religiosity into five dimensions. the first dimension is the dimension of faith (the ideological dimension) which refers to an individual's belief in the teachings of his religion. this dimension considers what is considered true by individuals such as belief in the existence of gods, angels, and holy books. the next is the dimensions of worship (the ritualistic dimension) that describes the extent to which an individual carries out his or her religious orders about religious practices. these religious practices can be religious practices in person or in general. the third dimension of appreciation (the experiential dimension) consists of an individual's appreciation of religious teachings such as how they feel about god and how their attitudes towards religion. then the fourth is the dimension of religious knowledge (the intellectual dimension) which describes the extent to which individuals understand the knowledge and teachings of their religion. the last dimension of the effect (the consequential dimension) measures how individuals can apply their religious teachings so that they can direct behavior in their social life. this dimension refers to the decisions and commitments of individuals in a society based on their beliefs, rituals, knowledge, and religious appreciation. the effect of emotional intelligence on ethical judgment emotional intelligence refers to an individual's ability to understand the emotional state around him. individuals who can control and manage these emotions well can direct their attitudes and place themselves in various situations. emotional intelligence can lead individuals to separate the various emotions that are used as material for thought in acting (dewi et al., 2019). an individual who can understand the emotional state of himself and those around him can direct ethical judgment towards a more ethical (ismail & rasheed, 2019). emotional intelligence has a strong impact on a manager's (angelidis & ibrahim, 2011), auditor’s (ismail, 2015), and accounting students' (ismail & rasheed, 2019) ethical judgment. a manager who has a higher level of emotional intelligence will believe that an action should not be detrimental to others, on the other hand, a manager with a lower emotional intelligence level tends to be willing to take action with negative consequences (angelidis & ibrahim, 2011). this means that the higher the level of an s. sulastri, i. u. kasanah/ journal of accounting and business education, 5 (2), march 2021 25 individual's emotional intelligence, the tighter he will be in making ethical judgments. based on the explanation above, the following research hypothesis is formulated. h1: emotional intelligence has a positive effect on ethical judgment. the effect of religiosity on ethical judgment religiosity is closely related to individual belief in god. the principles and commands of god that are believed by individuals provide an overview of how individuals should respond to and respond to what is happening around them. this in turn will also affect individual judgment in making a decision. individuals who have a strong religion will always apply and consider god's teachings and commands in every decision and action they take. jaafar et al., (2004) argued that there is a real difference in terms of moral judgment between groups of malay and american adolescents, malay adolescents show a slightly higher level of moral reasoning than american adolescents. malay adolescents reflect malay religious principles and cultural values in moral considerations when compared to american adolescents who reflect personal responsibility, freedom, self-interest as justification for moral reasons (jaafar et al., 2004). walker et al., (2012) in their research stated that religiosity affects individuals in doing ethical judgment. these results are in line with research conducted on students in minangkabau that the level of religiosity has a positive effect on their ethical judgment (resty, 2018). based on the explanation above, the following research hypothesis is formulated. h2: religiosity has a positive effect on ethical judgment. methods this research is an explanatory study that aims to explain the relationship between emotional intelligence and religiosity on the ethical judgment. using the purposive sampling technique, a sample was taken with the criteria for accounting students who have taken courses in business and professional ethics. these students were chosen because they were considered to have basic knowledge of professional ethics so that they could identify and determine ethical and unethical behavior. the number of samples used in this study was 210 respondents. emotional intelligence is an individual's sensitivity to the feelings or emotions of himself and others, which then controls and manages the information to direct his thoughts and actions. this variable is measured by a questionnaire which includes four dimensions of emotional intelligence, namely selfemotional appraisal (sea), others emotional appraisal (oea), regulation of emotion (roe), and use of emotion (uoe) which are adopted from wong & law (2002). respondents were asked to respond to the form of a four-point likert scale with an answer preference level, namely strongly disagree, disagree, agree, and strongly agree. religiosity is an individual's belief in god, applying and considering god's principles and provisions in every decision or action. the religiosity variable is measured by a questionnaire which includes five dimensions of religiosity, namely the dimension of belief, the dimension of worship, the dimension of appreciation, the dimension of religious knowledge, and the effect dimension adopted from fadhilah (2019) and rahmawati (2019). respondents were asked to respond to the form of a four-point likert scale with an answer preference level, namely strongly disagree, disagree, agree, and strongly agree. ethical judgment is a process of considering and determining which action is the most ethical in dealing with an ethical dilemma. in this study, the variable ethical judgment was measured by presenting six illustrations of ethical dilemmas adopted from emerson et al., (2007). respondents were asked to respond to the form of a four-point likert scale with an answer preference level, namely strongly disagree, disagree, agree, and strongly agree. the data collection technique in this study was through distributing questionnaires. the closed questionnaire was used in this study. the data collected were analyzed using descriptive statistical analysis and multiple linear regressions. s. sulastri, i. u. kasanah/ journal of accounting and business education, 5 (2), march 2021 26 results and discussion description of respondents based on the data collected, it is known that most of the respondents in this study were female. as can be seen in table 1, female respondents in this study were 166 people or 79%, while male respondents were 44 people or 21%. table 1. general description of respondents by gender gender number of respondents percent females 166 79% males 44 21% total 210 100% multiple linear regression test the f test in this study was used to see the effect of the independent variable emotional intelligence (x1) and religiosity (x2) on the dependent variable ethical judgment (y) simultaneously. table 2. f-test results model sum of squares df mean square f sig 1 regression 200.723 2 100.362 17.117 .000 b residual 1213.701 207 5.863 total 1414.424 209 based on table 2, it can be seen that the significant value is 0.000 <0.05. it can be concluded that the emotional intelligence (x1) and religiosity (x2) variables simultaneously influence ethical judgment (y). furthermore, to determine the effect of each independent variable emotional intelligence and religiosity on the dependent variable ethical judgment was carried out using the t-test. table 3. results of t-test model unstandardized coefficients standardized coefficients t sig. b std. error beta 1 (constants) 11.070 1.554 7.121 .000 emotional inteligence (x1) .146 .047 .211 3.093 .002 religiosity (x2) .263 .071 .251 3.689 .000 based on table 3, it is known that the significance value is 0.000 <0.05 with a beta coefficient value of 0.211. this means that emotional intelligence has a significant positive effect on the ethical judgment. so it can be concluded that h1 is accepted. furthermore, the significance value for the religiosity variable is 0.000 <0.05 with a beta coefficient value of 0.251. this means that religiosity has a significant positive effect on the ethical judgment. then it can be concluded that h2 is accepted. the effect of emotional intelligence on ethical judgment the results of the study show that emotional intelligence has a significant positive effect on ethical judgment. this means that the higher the student's emotional intelligence level, the higher the student's ethical judgment will be. conversely, the lower the student's level of emotional intelligence, the lower the student's ethical judgment will be. emotional intelligence can influence an individual's ethical judgment when faced with an ethical dilemma. individuals with a high level of emotional intelligence are sensitive to the feelings of themselves and others around them, and use this information to direct their thoughts and actions. (salovey & mayer, 1990). individuals with a high level of emotional intelligence believe that an action should not deceive and harm people (angelidis & ibrahim, 2011). so that individuals who can s. sulastri, i. u. kasanah/ journal of accounting and business education, 5 (2), march 2021 27 control and manage their emotions can direct their thoughts and actions in a more ethical direction, including when making ethical judgments. meanwhile, individuals with a low level of emotional intelligence tend to be willing to take actions that have a negative impact (angelidis & ibrahim, 2011). individuals with high levels of emotional intelligence tend to act more ethically than individuals with low levels of emotional intelligence (angelidis & ibrahim, 2011). so that individuals who have a high level of emotional intelligence will direct their ethical judgment towards a more ethical one. the results of this study also support the theory of cognitive moral development put forward by kohlberg. the theory of cognitive moral development states that every individual experiences various stages of moral development which are influenced by the process of thinking and arguing (kohlberg, 1969). student moral development is at the conventional level. at this level, the individual tries to actively establish a good relationship between himself and the people around him (nurhayati, 2006). individuals with high levels of emotional intelligence tend to take actions or decisions that will benefit everyone (angelidis & ibrahim, 2011). this is following the theory of cognitive moral development, individuals who have a high level of emotional intelligence will always take actions that do not hurt others and obey the rules of law to maintain good relations between themselves and those around them. judging from the results of descriptive statistical analysis, the self-emotional appraisal (sea) indicator gets the highest total score, namely 26.64% of the four existing indicators. individuals who can understand their emotional states tend to be better at expressing their emotions to others. this can help direct the actions and decisions of individuals as they interact with others. the results of this study are in line with the research conducted by ismail & rasheed (2019) showing that emotional intelligence positively affects ethical judgment. research conducted on accounting students in malaysia states that students who can understand the emotional state of those around them can direct their ethical judgment towards a more ethical one. other studies also show the same results that emotional intelligence affects the ethical judgment of managers (angelidis & ibrahim, 2011) and auditors (ismail, 2015). the effect of religiosity on ethical judgment the results of the study show that religiosity has a significant positive effect on the ethical judgment. this means that the higher the level of student religiosity, the higher the student's ethical judgment will be. conversely, the lower the level of student religiosity, the lower the students' ethical judgment will be and the more tolerant they are in making ethical judgments. religiosity affects an individual's ethical judgment in determining whether an action is ethical or unethical when facing an ethical dilemma. religious individuals have a strong belief in god almighty, accompanied by a commitment to apply and consider his provisions in every decision or action. (mcdaniel & burnett, 1990). individuals with a high level of religiosity will try to act following religious rules (weaver & agle, 2002). religiosity can influence individual actions and perceptions (helmy, 2018). the higher the level of individual religiosity, the tighter it will be in controlling unethical behavior (resty, 2018). so that the values of religiosity that are believed by individuals can direct their thinking about what is ethical and unethical based on the principles and commands of god almighty. the individual will try to avoid unethical actions following the rules, orders, and provisions of god almighty. individuals with a high level of religiosity always obey the commands of god almighty and always uphold ethical values. this shows that religiosity can influence individuals when making an ethical judgment. the results of this study are also following the theory of cognitive moral development. the theory of cognitive moral development states that every individual experiences various stages of moral development which are influenced by the process of thinking and arguing (kohlberg, 1969). the level of student moral development is at the conventional level. at the conventional level, individuals believe that an action must be carried out following the rules to avoid criticism and social disapproval (nurhayati, 2006). religious individuals believe and practice the values of religiosity in every consideration (weaver & agle, 2002). the values of religiosity that individuals believe in the form of rules, regulations, and orders from god almighty can influence their thinking when making ethical judgments about which actions are ethical and unethical. this is following the theory of cognitive moral development, that s. sulastri, i. u. kasanah/ journal of accounting and business education, 5 (2), march 2021 28 individuals with a high level of religiosity believe that they must take action following the rules they believe in, namely the rules and orders of their religion. (weaver & agle, 2002). judging from the results of the descriptive statistical analysis, the belief dimension indicator (the ideological dimension) got the highest total score, namely 23.49% of the other four indicators. based on these results, it can be concluded that the respondents showed a confident attitude towards the teachings of their religion. this means that respondents consider their religious teachings important and consider them in every action and decision they make. this finding is in line with research conducted by resty (2018). research conducted on accounting students in minangkabau states that religiosity has a positive effect on the ethical judgment. the higher the level of student religiosity, the more ethical the student will be in making a decision (resty, 2018). the results of this study are also following the research by walker et al., (2012) which indicates that religiosity affects ethical judgment. individuals with a high level of religiosity will always apply religiosity values in identifying ethical and unethical behavior (walker et al., 2012). however, the results of this study are contrary to the research by helmy (2018) which states that there is no significant difference in ethical judgment between students who have a high or low level of religiosity. conclusion based on the findings in the research and discussion previously reviewed, the following conclusions can be drawn. first, emotional intelligence has a significant positive effect on ethical judgment among students. students who can understand, identify and manage their emotions and others’ will always direct their actions in a positive direction to maintain good relations between themselves and the people around them. so that the higher the level of emotional intelligence of students, the more ethical judgment will be made. second, religiosity has a significant positive effect on ethical judgment on students. the values of religiosity that are believed by students can direct their thoughts about what is ethical and unethical based on the principles and commands of god almighty. this also applies when students face ethical dilemma situations, so that the higher the level of student religiosity, the more assertive they will be in making ethical judgments. thus the results of this study are expected to be used as input for educational institutions, especially at the university level, to provide services and training to accounting students to improve their emotional intelligence and religiosity. besides, companies can also add indicators of emotional intelligence and religiosity in recruiting accounting staff and corporate auditors. this can be done as a step to maintain and increase the company's credibility and integrity in the future. the limitation of this study is that the subjects used in this study are accounting students who still have no experience in the world of work. so there is the possibility that these findings will differ from their actions and decisions when they are faced with ethical dilemma situations in the work environment later. future studies should use accountants or auditors who have experience in the work environment as research subjects. further research can also add other relevant factors, both internal and external, that influence ethical judgment such as age, gender, moral reasoning, ethical education, ethical climate, and organizational ethical culture. references akers, m. d., & porter, g. l. 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(2002). the effects of leader and follower emotional intelligence on performance and attitude : an exploratory study. the leadership quarterly, 13, 243–274. m.a. rafsanjani, h.p. pamungkas, e.t. rahmawati /journal of accounting and business education, 4 (1), september 2019 34 does teacher-student relationship mediate the relation between student misbehavior and teacher psychological well-being? mohamad arief rafsanjani 1 heni purwa pamungkas 2 etika dhewi rahmawati 3 1,2 departement of economic education, faculty of economics, universitas negeri surabaya, indonesia 3 sma negeri 1 turen, malang, indonesia email: mohamadrafsanjani@unesa.ac.id doi: http://dx.doi.org/10.26675/jabe.v4i1.8411 abstract: one dominant determinant of teacher psychological well-being is the problem of student discipline. this study seeks to describe how the process of student disciplin (seen of student misbehavior) may affect teacher psychological well-being (seen of enthusiasm and emotional exhaustion) by including a mediator variable, namely teacher-student relation. this study was conducted on 159 economics teachers of senior high schools in malang (malang city and malang regency) using a total population sampling. we used structural equation modeling (sem) for data analysis, followed by a sobel test the mediating role of variable in teacher-student relationship. the results showed that student misbehavior had a negative effect on work enthusiasm but a positive effect on students' emotional exhaustion. this study also found that teacher-student relation mediate the relationship between student misbehavior and teacher psychological well-being. the results of this study explain the process of student misbehavior in establishing teacher-student relations which ultimately influences teacher work enthusiasm and emotional well-being. keywords: psychological well-being, student misbehavior, teacher-student relationship. introduction teacher psychological well-being is one theme that is always interesting to discuss as it is continuously associated with motivation and achievement of student learning outcome and teacher teaching quality, this is because teacher well-being often observed from its work enthusiasm and emotional exhaustion, will affect the teacher in creating an optimal learning condition and therefore its well-being impacts directly on student motivation and learning outcomes (arens & morin, 2016; klusmann, kunter, trautwein, lüdtke, & baumert, 2008; shen et al., 2015). this notion illustrates that teacher psychological well-being is one of the important determinants in the success of learning in a classroom. there are various factors that influence teacher psychological well-being. in terms of variable, one of the dominant factors is associated with the exposure to stress at work. previous researches show that journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ m.a. rafsanjani, h.p. pamungkas, e.t. rahmawati /journal of accounting and business education, 4 (1), september 2019 35 teacher psychological well-being is influenced by exposure to stress in the workplace (aldrup, klusmann, & lüdtke, 2017; duygulu, ciraklar, guripek, & bagiran, 2013; kyriacou, 2011; rafsanjani & rahmawati, 2019). one of the dominant causes of stress for teacher is student misbehavior (aldrup, klusmann, lüdtke, göllner, & trautwein, 2018; kyriacou, 2011). in this particular study, it is related to disciplinary violation, disturbance in classroom that interrupts the learning process and disrespect towards the teacher (aloe, shisler, norris, nickerson, & rinker, 2014; dicke et al., 2014). based on this view, it is believed that a decline in teacher psychological well-being has been linked to student misbehavior in classroom (aldrup et al., 2018). the previous findings that showed student misbehavior, always linked as one cause of reduced teacher psychological well-being (aldrup et al., 2018; aloe et al., 2014; kyriacou, 2011). however, this relationship left us with a question on how exactly the process student misbehavior may have affected the teacher psychological well-being. in the model of teacher well-being, it was suggested that the teacherstudent relationship is thought to be one of the mediator variables that may explain the relationship between student misbehavior and teacher psychological well-being teachers (j. l. spilt, koomen, & thijs, 2012). the model of teacher well-being stated that student misbehavior was thought to influence the relationship between teacher-student relationships, for example when teacher feels less respected, making the teacher feel rejected in classroom, thereby building unhealthy teacher-studentrelationship, which ultimately decreases teacher psychological well-being (jl spilt et al., 2012). on the other hand, building positive relationships between teachers and students is a fundamental goal for teacher to support achieving the learning goal, so if teacher-student relationship does not go well, it will have an adverse affect on teacher psychological well-being (butler, 2012; klassen, perry, & frenzel, 2012). this is the basis of a hypothesis that teacher-student relation can explain how a psychological process that underlies student misbehavior may influence the teacher psychological well-being. the teacher-student relationship reflects the closeness that exists from an interaction between the two. teacher-student relationship is generally characterized by a mutual respect, trust, warmth, and of low conflict (aldrup et al., 2018). such relationship plays a vital role in students development because it makes the students feel safe and attached to their teachers (deci, vallerand, pelletier, & ryan, 1991) and makes the students feel appreciated and supported by their teachers, and in the end, they are motivated to attain positive learning outcomes of cognitive, affective and behavioral (aldrup et al., 2018; corneliuswhite, 2007; kunter et al., 2013; roorda, koomen, spilt, & oort, 2011). but the relationship between teacher-student relations and the teacher psychological well-being is often overlooked. this is based on the observation that this variable is rarely studied (klassen et al., 2012; j. l. spilt et al., 2012). this is certainly surprising because building relationships with students is part of a core task in teacher profession (van der want et al., 2015). for this reason, this study follows a hypothesis from j. l. spilt et al. (2012), namely to examine the teacher-student relationship as a mediator variable to explain the influence of student misbehavior on teacher psychological well-being. in addition, related to the teacher psychological well-being, the variable teacher-student relation is still rarely examined (klassen et al., 2012; j. l. spilt et al., 2012). literature review and hypotheses teacher psychological well-being is a psychological state and work experience in an optimal condition (ryan & deci, 2001), characterized by positive matters that are felt or experienced by a teacher, e.g. feeling of job satisfaction and work enthusiasm, and lack of negative experience e.g. stress and emotional exhaustion (diener, suh, lucas, & smith, 1999; kunter et al., 2008; watson, clark, & tellegen, 1988). work enthusiasm is a condition felt by a teacher when one enjoys, likes and feels happy about the profession or work one does as a teacher (kunter et al., 2008). this positive psychological condition will m.a. rafsanjani, h.p. pamungkas, e.t. rahmawati /journal of accounting and business education, 4 (1), september 2019 36 influence the quality of teaching which will ultimately influence student motivation and learning outcomes (keller, goetz, becker, morger, & hensley, 2014; kunter et al., 2013). on the other hand, to achieve such optimum psychological function, in this case psychological well-being, a teacher needs low emotional exhaustion, wherein emotional exhaustion refers to its stress dimension, including feelings of strain and the depletion of emotional resources due to work or profession which will eventually lead a person stay away from work both emotionally and cognitively (maslach, schaufeli, & leiter, 2001). emotional exhaustion is a negative emotional condition and peak fatigue as a result from the work done. this is manifested in physical, psychological and emotional exhaustion exhaustion at its lowest point (wright & cropanzano, 1998). emotional exhaustion is a factor that causes a decline in teacher psychological well-being, in which emotional exhaustion is the main factor that causes a person to despair, give up and quit his job. emotional exhaustion refers to stress dimension experienced by a person, including feelings of tense, depressed and decreasing the level of patience (maslach et al., 2001), which ultimately has an adverse impact on student learning outcomes (klusmann, richter, & lüdtke, 2016; shen et al., 2015). the influence of student misbehavior on work enthusiasm through student-teacher relationship there are two models that are often used to explain to explain the origins of occupational wellbeing: the transactional model of stress and coping (lazarus & folkman, 1984) and the job demandsresource model (demerouti, bakker, nachreiner, & schaufeli, 2001). the core of these models states that job stressor experienced by a person is triggered by prolonged pressure that drains physical, psychological and emotional effort. in relation to teaching profession, the main stressors are student behavior deviation known as student misbehavior which includes student discipline problems, lack of respect towards the teachers and other disorders that distract learning process in the classroom (aloe et al., 2014; dicke et al., 2014; kyriacou, 2011). in previous studies, deviation in student behavior was linked to teacher psychological well-being, which caused feelings of anger, anxiety and increased sentiments experienced by the teacher and ultimately decreased pleasure and job satisfaction (aloe et al., 2014; dicke et al., 2014; klusmann et al., 2008; skaalvik & skaalvik, 2010). on the other hand student misbehavior is closely linked in creating the relationship between teacher-student. this variable (teacher-student relationship) is the building blocks of daily interactions in classrooms (pennings et al., 2018). teacher-student relation plays an important role in creating quality learning that will lead to positive learning outcome and student motivation (cornelius-white, 2007; pianta, 1999; roorda et al., 2011), and teacher psychological well-being (jantine l. spilt , koomen, & thijs, 2011). the same notion was revealed in a study, which stated that positive teacher-student relation is generally reflected in a respectful, warm and trusting relationship and a low level of conflict (aldrup et al., 2018; davis, 2003; roorda et al ., 2011). this is vital in supporting student development as it makes the student feel safe and develops a close relationship with the teacher (deci et al., 1991). fndings from previous studies also stated that when students feel appreciated and supported by their teachers, they will produce positive learning outcomes from affective, behavioral and cognitive aspects (aldrup et al., 2018; cornelius-white, 2007; kunter et al., 2013; roorda et al., 2011). in the model of teacher well-being proposed by jantine l. spilt et al. (2011) suspect that teacherstudent relations play an important role as a determinant of teacher psychological well-being, one of which is work enthusiasm. this variable (teacher-student relationship) can be used to explain how the student misbehavior influences the teacher's psychological well-being. student misbehavior can trigger bad interactions between teacher-student. this is supported by previous findings which stated students with behavioral and discipline problems causes the relationship with their teachers worsen (birch & ladd, 1998; buyse, verschueren, doumen, van damme, & maes, m.a. rafsanjani, h.p. pamungkas, e.t. rahmawati /journal of accounting and business education, 4 (1), september 2019 37 2008; nurmi et al., 2018 ) such student misbehavior ultimately makes teacher feel rejected and hurt and it is difficult to give attention and affection to student with problematic behavior (hargreaves, 2000; newberry & davis, 2008). ultimately, this makes the teacher feel reluctant and no longer enthusiastic in carrying out their duties and work. based on the above explanation, the researcher developed a hypothesis as follows: h1 = student misbehavior negatively influences teacher work enthusiasm through teacher-student relations. the influence of student misbehavior on emotional exhaustion through student-teacher relationship with regards to transactional model of stress and coping (lazarus & folkman, 1984) and job demands-resource model (demerouti et al., 2001) that discuss job stressor and its trigger and its impacts on physical, psychological and emotional well-being, one of the main causes of stress experienced by teachers is student misbehavior. student misbehavior is a violation of discipline that occurs during a learning process both inside and outside classroom. as explained earlier, student behavior is closely linked to creating both positive and negative teacher-student relationship, and ultimately influence teacher psychological well-being. this is reinforced by previous research that revealed student misbehavior would disrupt the learning process in classroom (robers, zhang, & truman, 2012). in another study, teachers were the subjects who said that they spent significant time related to student behavior problem (beaman, reynolds, & stephenson, 2011), one in three teachers stated that student misbehavior interfered with their teaching activities (robers et al., 2012) which have an impact on teacher-student relation to decline and ultimately cause teachers' emotional conditions increase. such condition was predicted by jantine l. spilt et al. (2011) that teacher-student relationship is believed to link the relationship between student misbehavior and teacher psychological well-being, and in this case: teacher emotional exhaustion. this is reinforced by previous findings in that building positive teacher-student relation is at the core of identity of a professional teacher (van der want et al., 2015) and it is teacher's main goal. hence when teacher fails to build a positive relationship with the student, it causes the teacher feeling stressful to increase and also results in an increased emotional exhaustion and reduced work enthusiasm (aldrup et al., 2018; mccormick & barnett, 2011). based on the above explanation, the researcher developed a hypothesis as follows: h2 = student misbehavior has positive influence on teacher emotional exhaustion through teacher-student relationship methods sampel this research was conducted on economic teachers of senior high school and equivalent, in malang city and regency. based on data from the local education office, there were 159 economic teachers. bcause this study uses structural equation models (sem), the minimum sample requirement is between100-400 (hair, black, babin, & anderson, 2010) therefore we took that all these teachers as our sample (saturated sample/total population sampling). instruments the variable student misbehavior in this study was assessed using an instrument developed by kunter and baumert (2006) based on teacher's perception regarding the extent students pay attention to m.a. rafsanjani, h.p. pamungkas, e.t. rahmawati /journal of accounting and business education, 4 (1), september 2019 38 and obey the teacher during the teaching learning process in classroom. this instrument consists of 5 items with a reliability level of α = 0.84 (aldrup et al., 2018). with regard to variable of teacher-student relationship, this study adopted the scale measurement of student teacher relationship scale (strs) developed by pianta (2001), in which it measures teacher’s perception if the students appreciate, likes and respect the teacher. this instrument consists of 4 items with reliability level α=0.85 (aldrup et al., 2018). 5-point scale yields score on conflict and closeness. with regard to teacher psychological well-being, we observed based on two indicators, namely work enthusiasm and emotional exhaustion. teacher work enthusiasm was assessed using an instrument developed by kunter et al. (2008) which consists of 4 items. emotional exhaustion was assessed using the maslach burnout inventory educators survey (mbi-es) instrument developed by (maslach, jackson, & leiter, 1997) which consists of 4 items. all variables in this study were assessed using instruments with likert scale measurement ranging from 1=strongly disagree to 5=strongly agree. data analysis this study used path analysis to analyze the data, to see the relationship between endogenous variables (student misbehavior), mediator variables (teacher-student relation) and exogenous variables (teacher psychological well-being). for this analysis researchers used sem (structural equation modeling). in addition to analyzing the relationship between latent variables (student misbehavior, teacher-student relationship and teacher psychological well-being), we also wanted to make sure that the manivest variable (indicators) that we use to measure latent variables were correct (confirmatory factor analysis/cfa). results the results of data analysis in figure 1, show that student misbehavior has a significant negative effect on work enthusiasm with β coefficient=-0.393, α=0.00 and vice versa has a significant positive effect on emotional exhaustion with β coefficient=0.384, α=0.00. whereas for misbehavior, it also has a significant negative effect on teacher-student relationship with β coefficient=-0.415 α=0.00, and studentteacher relationship has a significant positive effect on work enthusiasm with β coefficient=0.248 α=0.00 and has a significant negative effect on emotional exhaustion with β = -0.325 α = 0.00. figure 1. results of data analysis m.a. rafsanjani, h.p. pamungkas, e.t. rahmawati /journal of accounting and business education, 4 (1), september 2019 39 the results of the analysis (table 1) also show that direct effects of student misbehavior on teacher work enthusiasm is -0.393, this is higher than the indirect effects (the effects of sm on we through tsr) of 0.103 (-0.415 × 0.248) thus giving a total effects of student misbehavior towards teacher work enthusiasm of -0.496. furthermore, the student misbehavior has direct effects on teacher emotional exhaustion of 0.385, this is higher than the indirect effects (the effect of sm on ee over the tsr) of 0.135 (-0.415 × -0.325), which in turn, influences the student total misbehavior towards teacher emotional exhaustion of 0.520. table 1. direct and indirect effect work enthusiasm (we) emotional exhaustion (ee) student misbehavior (sm) direct effects -0.393 0.385 indirect effects (through tsr) -0.105 0.135 total effects -0.496 0.520 the first sobel test was conducted to see the role of teacher-student relationship as a mediator variable from the influence of students’ misbehavior on teacher work enthusiasm (table 2), the results show that student-teacher relationship variable plays a significant role as a variable that mediates the influence of student misbehavior on teacher work enthusiasm (p <0.05). table 2. sobel test for indirect effects sm→tsr→we input test statistic p-value ta -4.866 sobel test: 2.496211 0.012553 tb 2.908 the second sobel test was conducted to examine the role of mediator of teacher-student relationship variable on teacher emotional exhaustion in table 3. it also showed that the teacher-student relationship variable played a significant role in mediating the influence of student misbehavior on teacher emotional exhaustion (p < 0.01). tabel 3. sobel test for indirect effects sm→tsr→ee input test statistic p-value ta -4.866 sobel test: 3.01394165 0.00257877 tb -3.839 discussion relationship between student misbehavior with teacher work enthusiasm and emotional exhaustion findings of this study show that student misbehavior has significant negative effects on teacher work enthusiasm. this means that student misbehavior or student delinquency such as disciplinary violations at school may cause a decrease in teacher enthusiasm towards work (i.e. teaching). on the other hand, findings of this study indicate that student misbehavior has significant positive effects on teacher emotional exhaustion which is illustrated with an increase in student misbehavior at school lead to increased teacher emotional exhaustion. these results explain that student misbehavior characterized by disciplinary violation, disturbances in both inside and outside the classroom, ignorant towards teacher instruction teacher, and student disturbance during the learning process can ultimately lead to a decrease in teacher enthusiasm in teaching in the classroom. the decline of teacher's enthusiasm towards work will be marked by m.a. rafsanjani, h.p. pamungkas, e.t. rahmawati /journal of accounting and business education, 4 (1), september 2019 40 psychological conditions experienced, namely they feel no longer enjoy, like, and happy in carrying out their duties as teachers. in addition, these findings also confirm the results of previous studies stating that the decline in the teacher psychological well-being seen from work enthusiasm is caused by student misbehavior (aldrup et al., 2018; aloe et al., 2014; dicke et al., 2014 ; klusmann et al., 2016; kyriacou, 2011; skaalvik & skaalvik, 2010). this of course must get the main attention from all parties involved, because if the student misbehavior is not found a solution, it will make the teacher no longer feel enthusiastic to work, which eventually will result in the teacher not being optimal in carrying out the duties in teaching which surely impacts on the student learning outcomes (keller et al., 2014; kunter et al., 2013). other findings in this study indicate that student misbehaviors that cause disturbances during the teaching and learning process in classroom may cause an increased teacher emotional exhaustion. this emotional exhaustion would be seen from the stress experienced which manifests in teacher physical and psychological (emotional) exhaustion, including feeling depressed, decreased level of patience, irritability, frustration and sadness. this also confirms previous findings that explain student misbehavior is one of the causes in increased teacher emotional exhaustion (aldrup et al., 2018; dicke et al., 2014; mccormick & barnett, 2011). this situation certainly needs special attention because student misbehavior makes teachers experience depressed emotional conditions, which in turn can make the teacher stay away from the profession or experience reluctance to carry out their duties (maslach et al., 2001). emotional exhaustion also causes a person to be at the culmination point of despairing, giving up and ending in stopping his profession as a teacher. when teachers experience this (emotional exhaustion), this will certainly have a negative impact on the process of achieving the goals of classroom learning. the teacher-student relationship as a mediating variable finding of the study indicates that student misbehavior is one of the causes of a decline in teacher psychological well-being. in order to observe the process of relations between the two variables, in reference to hypothesis of j. l. spilt et al. (2012), the researcher included variable teacher-student relationship as a mediating variable from the relationship between student misbehavior and teacher psychological well-being. the results of this study indicate that student misbehavior has a significant negative effect on teacher-student relations. this shows that student misbehavior when at school causes the teacher-student relationship to be bad, and vice versa. in more detail, this study reveals that teacher-student relations have a significant positive effect on teacher work enthusiasm which means that when the teacher-student relationship is well established, it makes the teacher more enthusiastic and enthusiastic in carrying out his work as a teacher. on the other hand, the teacher-student relationship has a significant negative effect on the teacher's emotional exhaustion that explains to all of us when the teacher-student relationship is at a good level, can reduce the teacher's emotional exhaustion, and vice versa. the sobel test results also show that the teacher-student relationship variable plays a significant role in mediating the influence of student misbehavior on the teacher's enthusiasm and also on the teacher's emotional exhaustion. this proves the hypothesis of the previous research which states that the teacher-student relationship variable can explain how the influence of student misbehavior on the teacher psychological well-being (j. l. spilt et al., 2012). poor student behavior during class or school will make it difficult for teachers to show affection and attention to these students, which ultimately makes the teacher ignorant of students. this is what will then form teacher-student relationships that are not good, and ultimately affect the teacher psychological well-being. the findings of this study also revealed that the teacher-student relationship was more closely related to student misbehavior, compared to the teacher psychological well-being. this might happen because the teacher will immediately respond to student behavior in the teaching and learning process in the class. the process of teacher-student interaction in this class will ultimately form teacher-student relationships. m.a. rafsanjani, h.p. pamungkas, e.t. rahmawati /journal of accounting and business education, 4 (1), september 2019 41 furthermore, this study demonstrates and confirms the previous studies that state positive teacherstudent relations will increase work enthusiasm and reduce teacher emotional exhaustion (aldrup et al., 2018; jantine l. spilt et al., 2011). positive teacher-student relations are characterized by mutual respect, mutual trust, low conflict between teachers and students and heartfelt interactions between the two. when such relation exists, the teacher will become enthusiastic and motivated to teach and guide the students, who in the end, the learning goals will be easily achieved optimally. positive teacher-student relationships will also reduce teacher emotional exhaustion, because when the teacher feels enthusiastic and eager to work, it will automatically reduce stress on the psychological condition. this is an important finding because previous research has focused a lot on the relationship between teacher-student relations with student development (roorda et al., 2011), and research rarely looks at the relationship between teacher-student relations and teacher psychological well-being (klassen et al. 2012; jl spilt et al., 2012). this study demonstrates that teacher-student relationship is one of the important determinants that influence teacher psychological well-being. conclusion the results of this study indicate that student misbehavior has significant effects on teacher psychological well-being as seen from work enthusiasm and teacher emotional exhaustion. furthermore, this study also shows that teacher-student relationship bridge the influence of student misbehavior on work enthusiasm and teacher emotional exhaustion. the implication of findings of this study describe about the process of student misbehavior influences teacher psychological well-being. in the process, student misbehavior plays a role in causing teacher-student relations to be negative (negative), this makes the teacher reluctant to interact closer with the students (becoming ignorant) and ultimately making the teacher lazy and reluctant to work (decreased enthusiasm for work). on the other hand, student misbehavior also causes the teacher more depressed, the level of patience decreases which was observable from teachers’ attitude where they got easily angry when dealing with student misbehavior (emotional exhaustion). this study has limitations in observing the variable student misbehavior and teacher-student relations from the teacher perception. therefore, the researcher suggest the following study to reexamine the results of this study by combining measurements from teacher’s perception as well as student’s perception to provide a more accurate result related to the variable student misbehavior and teacherstudent relations. references aldrup, k., klusmann, u., & lüdtke, o. 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(1998). emotional exhaustion as a predictor of job performance and voluntary turnover. journal of applied psychology, 83(3), 486–493. doi:https://doi.org/10.1037/0021-9010.83.3.486 a.monique, i.harymawan/ journal of accounting and business education, 6 (2), march 2022 10 the influence of industrial specialization auditor on audit report lag angelia monique 1 iman harymawan 2 1,2 department of accountancy, faculty of economics and business, universitas airlangga, indonesia email: harymawan.iman@feb.unair.ac.id doi: abstract: this study aimed at analyzing the impact of industrial specialization auditor on audit report lag and how the related party transaction affects the relationship between industrial specialization auditor and audit report lag. this study used 1,897 observations from 353 different firms listed on the indonesia stock exchange from 2010 to 2017. industrial specialization auditor was measured using market share based on total assets. this study used an ordinary least square regression analysis model. this study found that firms audited by the industrial specialization auditors had shorter audit report lag. this study also found that firms with high disclosure of the related party transactions had shorter audit report lag and those audited by the industrial specialization auditors belonging to the related party transactions did not extend (shorten) the audit report lag. these results indicate that firms audited by the industrial specialization auditors influenced the audit report lag; firms with high disclosure of the related party transactions influenced the audit report lag; and firms audited by the industrial specialization auditors belonging to high related party transactions did not influence the audit report lag. the implication of this study can be used by the firm management as a consideration in selecting the auditors. article history received 10 november 2020 revised 21 december 2020 accepted 1 january 2022 keywords audit delay; audit report lag; industrial specialization auditor; related party transactions. citation: monique, a., & harymawan, i. (2022). the influence of industrial specialization auditor on audit report lag. journal of accounting and business education, 6(2),10-21. introduction previous researches have concluded some factors that can affect audit report lag (nor et al., 2010; hashim & rahma, 2012; hosseinzadeh et al., 2014; hashim et al., 2013; abernathy et al., 2014; al daoud et al., 2014, 2015; khlif & samaha, 2014; whitworth & lambert, 2014; sultana et al., 2014; baatwah et al., 2016; hassan, 2016; sharma et al., 2017). the factors are firm characteristics and complexity (firm size and firm performance), audit risk (ownership structure, high risk account, and audit opinion), public accountant office’s attribute (auditor’s reputation), and firm governance (audit committee independence, audit committee meeting, board of directors’ size, and board of directors’ independence). there are only few researches that analyze the relationship of auditor’s industrial specialization with audit report lag (habib & bhuiyan, 2011; whitworth & lambert, 2014; rusmin & evans, 2017). there is no formal arrangement for the requirements for a public accountant office to be categorized into industrial specialist, thus research on auditor’s industrial specialization is interesting. in addition, there is no research on auditor’s industrial specialization in relation to related party transaction on audit report lag. journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ a.monique, i.harymawan/ journal of accounting and business education, 6 (2), march 2022 11 many previous researches have been conducted on audit report lag in many countries including emerging countries, such as malaysia (nor et al., 2010; hashim & rahman, 2012; hosseinzadeh et al., 2014; hashim et al., 2013), jordan (al daoud et al., 2014, 2015), egypt (khlif & samaha, 2014), and indonesia (rusmin & evans, 2017). emerging countries are quite attractive to investors since they are oriented to export and produce products at a lower cost, generating a higher return than advanced countries for the investors. audit report lag is the main indicator for investors in decision making since audit report contains auditor opinion that describes financial statement credibility, thus they can quickly adjust their investment preference (habib & bhuiyan, 2011). since auditors specialized in an industry develop their knowledge of such industry specifically, they conduct audit more efficiently, and they are expected to complete audit more quickly than non-specialized auditor (habib & bhuiyan, 2011). this research examined the use of industrial specialization auditor, related party transaction, and the use of industrial specialization auditor on firms that disclose high related party transaction. following the learning curves theory, the researcher predicted that using industrial specialization auditor to provide audit services where the auditor was used to and familiar to client’s business processes and risks in an industry and related party transaction increased firm efficiency, and the audit would be more efficient and completed more quickly, making the firm to have a shorter audit report lag. in addition, this research proposed specialized auditor to conduct more in-depth examination on related party transaction. therefore, a firm audited by specialized public accountant office and having related party transaction is predicted to have a longer audit report lag. this research used firms registered at the indonesia stock exchange (bei) as samples. the shortest and longest audit report lags based on the samples were 12 days and 425 days. this shows that there is audit report lag of over a year. the mostly used measurement of auditor’s industrial specialization, that was market share based on audit fee, could not cover most of the firms registered in the indonesia stock exchange (bei), since not all of the firms disclosed the audit fee (rusmin & evans, 2017), thus this research used market share measurement based on total assets. besides, indonesia is a developing country with a strong history of military and political connections in the business world (harymawan & nowland, 2016; harymawan, 2018), thus they tended to do related party transaction. therefore, indonesia is a country that is compatible to the research on the influence of auditor’s industrial specialization on audit report lag and the influence of auditor’s industrial specialization in relation to related party transaction on audit report lag. the results of this research may contribute theoretically and practically. theoretically, this research may develop scientific knowledge and become a reference for further researches on auditor’s industrial specialization, related party transaction, and audit report lag. practically, firm management can use the research results as reference in choosing public accountant office specialized in its industry that performs audit effectively and efficiently so as to shorten audit report lag. literature review and hypotheses the learning curves theory states that a work that is carried out repeatedly will be completed more quickly since the doer is accustomed to the operation and instruments. this theory assumes that a worker will complete his work more quickly when he has done it repeatedly. the more he does the same thing, the shorter he takes to complete the work. similarly, an industrial specialization auditor completes an audit more quickly in a client’s industry since he has conducted the audit repeatedly in that very industry. an auditor who has conducted an audit repeatedly in the same industry will be used to any audit risks and processes in that industry. according to habib and bhuiyan (2011), a specialized public accountant office gets more quickly familiar to client’s industrial model. this conforms to the learning curves theory. too long audit report lag causes negative view since it affects the relevance of information in the financial statements (whitworth & lambert, 2014). delayed delivery of information in financial statements will surely affect the effectiveness of financial statements (rusmin & evans, 2017). financial statements that are ineffective and lack relevance because of the length of time taken to deliver the a.monique, i.harymawan/ journal of accounting and business education, 6 (2), march 2022 12 financial statements may affects uncertainty in decision making (dao & pham, 2014). a firm surely desires to give a positive impression of its financial statements by issuing its financial statements in time, thus audit report lag should be minimized at all costs. in addition, the existence of decision of head of capital market and financial institution supervisory agency number: kep-346/bl/2011 in improvement of regulation number x.k.2 that obligates open companies registered at the indonesia stock exchange to submit their annual financial statements within three months (90 days) after the end of company’s fiscal year motivates firms to submit their financial statements before or on the 90 th day after the end of fiscal year. on the other hand, investors also desire shorter audit report lag since audit report contains auditor opinion that describes financial statements’ credibility, thus they can quickly adjust to their investment preference (habib & bhuiyan, 2011). specialist public accountant office has big competence in presenting high quality audit (defond & zhang, 2014). specialized public accountant office gets familiar to client’s industrial model more quickly (habib & bhuiyan, 2011). therefore, quick understanding of client’s industrial information makes an auditor work more efficiently (huang et al., 2015). the more efficient an auditor performs an audit, the shorter the audit report lag should be (whitworth & lambert, 2014). there are two arguments on related party transaction. the first argument states that related party transaction increases firm efficiency since related party transaction may minimize transaction cost and maximize firm value (khanna & palepu, 2000), firm performance (fisman & wang, 2010; ryngaert & thomas, 2012), and optimize allocation of internal resources and increase return on asset (ge et al., 2010), while the second argument states that related party transaction has higher risks that increases audit fee and tends to make auditor make modified opinion with explanatory sentences for related party transaction (habib et al., 2015; fang et al., 2018). referring to the research conducted by habib and bhuiyan (2011), auditor’s industrial specialization is capable of developing specific knowledge and expertise needed in an industry and adapting more quickly to client’s business operation since it issues audit report more quickly or shortens audit report lag. likewise, the research conducted by whitworth and lambert (2014) and rusmin and evans (2017) finds that auditor’s industrial specialization negatively affects audit report lag. therefore, the researcher predicted that a firm audited by an industrial specialization auditor has shorter audit report lag. h1: firm audited by industrial specialization auditor has shorter audit report lag. the research conducted by nor and ismail (2017) states that related party transaction positively affects firm performance. related party transaction can be carried out for efficiency reason since related party transaction may reduce the cost of transaction and increase firm value (khanna & palepu, 2000), firm performance (fisman & wang, 2010; ryngaert & thomas, 2012), and optimize allocation of internal resources and increase return on asset (ge, et al., 2010). therefore, the researcher predicted that firms that disclose high related party transaction has shorter audit report lag. h2: firm disclosing high related party transaction has shorter audit report lag. habib et al. (2015) and fang et al. (2018) find that related party transaction positively affects audit fee and tends to make auditor issue modified opinion with explanatory sentences of related party transaction. this means that related party transaction is an account with high risk, causing audit fee to increase and the firm to get modified opinion with explanatory sentence. industrial specialization auditor understands client’s business risk and industrial operation better and will give more attention to highly risky related party transaction account. therefore, the researcher predicted the firms that are audited by industrial specialization auditor and disclose related party transaction have longer audit report lag. h3: firm that is audited by industrial specialization auditor and discloses high related party transaction has longer audit report lag. a.monique, i.harymawan/ journal of accounting and business education, 6 (2), march 2022 13 methods sample and data the research’s initial samples were all firms registered in the indonesia stock exchange and listed in the database of osiris for the period 2010-2017. all financial data were obtained from osiris and data other than financial data were manually collected from financial statements and annual financial statements downloaded from the indonesia stock exchange’s official website. in the sampling choice, the data of financial industrial firms (sic 6) and lost data were excluded. based on the criteria, the number of samples used in this research was 1,897 observations that were processed using ordinary least square regression model. measurement auditor’s industrial specialization auditor’s industrial specialization is public accountant office specialized in one industry. auditor’s industrial specialization is measured using market share. then, following the proxy of rusmin and evans (2017), public accountant office with the highest market share in an industry is an industrially specialized public accountant office. the firms audited by industrially specialized public accountant office were scored 1 and 0 if otherwise. in this research, the researcher used market share measurement model based on total assets rusmin and evans (2017) as follows: mstaik = ∑ ∑ ∑ where i is index for public accountant office, j is index for client firm, k is index for client industry, jik is number of public accountant office’s client i in industry k, total asetijk is total assets of client of auditor i from client j in industry k, and mstaik is market share of total assets of auditor i in industry k. related party transaction related party transaction in financial accountancy standards notice (psak) no. 7 is defined as a transfer of resources, services, or obligations between the reporting entity and related parties, regardless of whether there is a price to charge. related party transaction is measured using a formula referring to the research conducted by fang et al. (2018) as follows: rpt = audit report lag audit report lag is defined as a period from the last date of firm’s fiscal year to the date of audit report (hassan, 2016). audit report lag is measured by finding the difference between the last date of firm’s fiscal year and the date of audit report. the definitions of all variables used in this research are as presented in table 1. data analysis technique the data analysis technique used in this research was descriptive statistical analysis test, pearson correlation analysis test, independent t-test, and multiple linear regression test. the regression models used in this research were as follows: a.monique, i.harymawan/ journal of accounting and business education, 6 (2), march 2022 14 regression model to test hypotheses one and two arl = β0 + β1specialisti,t + β2rpti,t + β3bdsizei,t + β4bdindi,t + β5acmeeti,t + β6acfei,t + β7big4i,t + β8levi,t + β9roai,t + β10fsizei,t + β11industryi,t + β12yeari,t + ε regression model to test hypothesis three arl = β0 + β1specialist*rpti,t + β2specialisti,t + β3rpti,t + β4bdsizei,t + β5bdindi,t + β6acmeeti,t + β7acfei,t + β8big4i,t + β9levi,t + β10roai,t + β11fsizei,t + β12industryi,t + β13yeari,t + ε table 1. variable measurement variable proxy source of data audit report lag difference between the final date of firm’s fiscal year and the date of audit report firm’s annual financial statements auditor’s industrial specialization 1 if firm is audited by an industrially specialized public accountant office and 0 if otherwise. osiris and firm’s annual report related party transaction rpt = firm’s annual financial statements board size bdsize = total bcomm + total bdirc firm’s annual report independence of board of directors bdind = firm’s annual report audit committee meeting 1 if audit committee meeting is held more than four times in a year and 0 if otherwise firm’s annual report audit committee’s financial expertise 1 if it has more than one member of audit committee with expertise in financial sector and 0 if otherwise firm’s annual report big four public accountant offices 1 if firm is audited by one of big four public accountant offices and 0 if otherwise firm’s annual report leverage lev = osiris return on asset roa = osiris firm size fsize = ln (total aset) osiris source: processed data results and discussion descriptive statistics the descriptive statistical analysis aimed at describing all of the variables used in this research without comparing relationship between variables. the descriptive statistics of the variables used in this research, after winsorize, are presented in table 2 and table 3. table 2 shows the specialized public accountant office in each industry. public accountant office purwantono, sungkoro & surja affiliated to ernst & young is an auditor specialized in the industries of agriculture, forestry, and fishery; manufacture; transportation & public utility; and services (sic 0, 2, 4, and 7). meanwhile, public accountant office tanudiredja, wibisana, rintis & rekan affiliated to pricewaterhouse coopers is an auditor specialized in the industries of mining and construction; manufacture; wholesale & retail trade (sic 1, 3, and 5). in service industry (sic 8), the specialized auditor is public accountant office tanubrata sutanto fahmi & rekan (bdo). a.monique, i.harymawan/ journal of accounting and business education, 6 (2), march 2022 15 table 2. auditor’s industrial specialization based on industrial sector sic industry public accountant office market share % 0 agriculture, forestry, fishery purwantono, sungkoro & surja (ey) 40 1 mining & construction tanudiredja, wibisana, rintis & rekan (pwc) 27 2 manufacture (1) purwantono, sungkoro & surja (ey) 28 3 manufacture (2) tanudiredja, wibisana, rintis & rekan (pwc) 47 4 transportation & public utility purwantono, sungkoro & surja (ey) 42 5 graceries & retails tanudiredja, wibisana, rintis & rekan (pwc) 38 7 service (1) purwantono, sungkoro & surja (ey) 38 8 service (2) tanubrata sutanto fahmi & rekan (bdo) 63 based on table 3, the firms registered in the indonesia stock exchange have audit report lag with average score of 77 days and median score of 80 days. the fastest audit report lag is 12 days by pt multipolar tbk. operating in manufacturing industry (sic 3), pt matahari putra prima tbk. operating in wholesale and retail trade industry (sic 5), and pt multifiling mitra indonesia tbk. operating in service industry (sic 8) in 2010 and audited by kap amir abadi jusuf, aryanto, mawar & rekan (rsm). meanwhile, the longest audit report lag of 425 days is that of pt buana listya tama tbk. operating in transportation and public utility industry (sic 4) in 2011 and audited by kap tanubrata sutanto fahmi & rekan (bdo). about 18% of observation used industrial specialization auditor. the firms have average sale transaction with related party of 10.5% of total assets. the firms averagely have nine members of board of directors and board of commissioners, and averagely one of four members of board of directors is independent board of director. about 40% of observation held audit committee meeting more than four times and 72% observation had more than one member of audit committee with expertise in financial sector. about 46% of observation was audited by big four public accountant offices. the firms have average leverage and return on asset 52% and 48%. meanwhile, the average total assets of all observations are 8.589 trillion rupiahs. table 3. descriptive statistics mean median minimum maximum arl 76.969 80.000 12.000 425.000 specialist 0.180 0.000 0.000 1.000 rpt 0.105 0.001 0.000 1.753 bdsize 9.355 9.000 4.000 28.000 bdind 0.231 0.222 0.000 1.167 acmeet 0.402 0.000 0.000 1.000 acfe 0.716 1.000 0.000 1.000 big4 0.456 0.000 0.000 1.000 lev 0.521 0.502 0.052 2.294 roa 4.780 3.840 -24.450 39.410 total aset 8,589,000,000,000 2,651,000,000,000 30,110,000,000 92,320,000,000,000 pearson correlation table 4 presents the results of correlation matrix of all variables used in this research. based on table 4, auditor’s industrial specialization has negative (-0.103) and significant relationship with audit report lag with significance level 1%. related party transaction, size of board of directors and board of commissioners, audit committee meeting, audit committee member’s financial expertise, use of big four public accountant offices, return on asset, and firm size are inversely proportional to audit report lag, while leverage is directly proportional to audit report lag. there is no significant relationship between board of directors’ independence and audit report lag. a.monique, i.harymawan/ journal of accounting and business education, 6 (2), march 2022 16 table 4. pearson correlation arl specialist rpt bdsize bdind acmeet acfe big4 lev roa fsize arl 1.000 specialist -0.097 *** 1.000 (0.000) rpt -0.087 *** 0.057 ** 1.000 (0.000) (0.013) bdsize -0.237 *** 0.183 *** 0.104 *** 1.000 (0.000) (0.000) (0.000) bdind 0.016 -0.057 ** -0.047 ** -0.117 *** 1.000 (0.480) (0.013) (0.041) (0.000) acmeet -0.101 *** 0.130 *** 0.122 *** 0.204 *** -0.003 1.000 (0.000) (0.000) (0.000) (0.000) (0.902) acfe -0.066 *** 0.055 ** 0.001 0.001 -0.022 0.006 1.000 (0.004) (0.017) (0.950) (0.974) (0.346) (0.804) big4 -0.135 *** 0.498 *** 0.101 *** 0.374 *** -0.047 ** 0.147 *** 0.038 * 1.000 (0.000) (0.000) (0.000) (0.000) (0.039) (0.000) (0.095) lev 0.197 *** -0.022 -0.054 ** -0.077 *** 0.005 0.009 0.086 *** -0.056 ** 1.000 (0.000) (0.341) (0.019) (0.001) (0.817) (0.696) (0.000) (0.015) roa -0.221 *** 0.109 *** 0.072 *** 0.190 *** -0.110 *** 0.033 0.029 0.153 *** -0.140 *** 1.000 (0.000) (0.000) (0.002) (0.000) (0.000) (0.146) (0.215) (0.000) (0.000) fsize -0.174 *** 0.233 *** 0.034 0.609 *** 0.042 * 0.296 *** -0.016 0.397 *** 0.002 0.121 *** 1.000 (0.000) (0.000) (0.136) (0.000) (0.067) (0.000) (0.482) (0.000) (0.915) (0.000) a.monique, i.harymawan /journal of accounting and business education, 6 (2), march 2022 17 independen t-test table 5 and table 6 present the detail of variables in the firms audited by industrial specialization auditor and in the firms that disclose related party transaction in their financial statements. based on table 5, the firms audited by industrial specialization auditor have significantly shorter audit report lag than the firms audited by non-industrial specialization auditor (72 days and 78 days), and have more members of board of directors and board of commissioners, fewer members of independent directors, more frequent audit committee meeting, more members of audit committee with expertise in financial sector, higher return on asset, bigger firm size, and tend to be audited by big four accountant offices than firms audited by non-industrial specialization auditor. there is no significant difference in the leverage of firms audited by industrial specialization auditor or non-industrial specialization auditor. table 5. firm characteristics based on auditor’s industrial specialization companies audited by auditor’s industrial specialization companies not audited by auditor’s industrial specialization t-value z-value n=342 n=1.555 arl 72.471 77.958 -4.240 *** -5.714 *** bdsize 10.655 9.068 8.111 *** 7.643 *** bdind 0.217 0.234 -2.491 ** -2.984 *** acmeet 0.538 0.372 5.702 *** 5.655 *** acfe 0.769 0.705 2.386 ** 2.383 ** big4 0.985 0.340 25.031 *** 21.705 *** lev 0.507 0.524 -0.953 -1.597 roa 6.921 4.309 4.758 *** 6.284 *** fsize 29.416 28.401 10.438 *** 9.556 *** significant at * 10%, ** 5%, *** 1% source: processed data in table 6, the firms that disclose related party transaction have more members of board of directors and commissioners, fewer independent board of directors, more often audit committee meeting, higher return on asset, bigger firm size, and tend to be audited by big four accountant offices than the firms that do not disclose related party transaction. there is no difference in audit report lag, audit committee member’s expertise in financial sector, and significant leverage between the firms that disclose related party transaction and the firms that do not disclose it. table 6. firm characteristics based on related party transaction companies disclosing related party transaction companies not disclosing related party transaction t-value z-value n=1.710 n=187 arl 76.999 76.690 0.185 -0.675 bdsize 9.543 7.642 7.523 *** 7.958 *** bdind 0.228 0.257 -3.444 *** -3.948 *** acmeet 0.412 0.310 2.708 *** 2.703 *** acfe 0.719 0.695 0.677 0.677 big4 0.477 0.267 5.495 *** 5.453 *** lev 0.522 0.516 0.253 1.337 roa 4.976 2.990 2.794 *** 2.917 *** fsize 28.682 27.693 7.798 *** 7.519 *** significant at * 10%, ** 5%, *** 1% source: processed data a.monique, i.harymawan /journal of accounting and business education, 6 (2), march 2022 18 primary analysis table 7. regression results of auditor’s industrial specialization variable (1) (2) arl arl specialist -2.305 * -2.657 * (-1.88) (-1.91) rpt -2.836 ** -3.300 ** (-2.24) (-2.28) specialist*rpt 3.036 (0.79) bdsize -0.983 *** -0.984 *** (-5.67) (-5.67) bdind -1.245 -1.278 (-0.25) (-0.26) acmeet -1.731 * -1.738 * (-1.70) (-1.71) acfe -4.306 *** -4.322 *** (-2.97) (-2.98) big4 0.097 0.119 (0.09) (0.11) lev 11.039 *** 11.083 *** (3.77) (3.79) roa -0.369 *** -0.370 *** (-4.02) (-4.02) fsize -0.421 -0.414 (-0.96) (-0.94) _cons 96.770 *** 96.646 *** (8.73) (8.71) industry dummy yes yes year dummy yes yes r2 0.146 0.146 n 1,897 1,897 statistic-t in bracket * p< 0.1; ** p< 0.05; *** p< 0.01 source: processed data to test the influence of auditor’s industrial specialization and related party transaction on audit report lag by controlling the bdsize, bdind, acmeet, acfe, big4, lev, roa, and fsize variables, the following regression model was used: arl = β0 + β1specialisti,t + β2rpti,t + β3bdsizei,t + β4bdindi,t + β5acmeeti,t + β6acfei,t + β7big4i,t + β8levi,t + β9roai,t + β10fsizei,t + β11industryi,t + β12yeari,t + ε to test the influence of auditor’s industrial specialization and related party transaction on audit report lag by controling bdsize, bdind, acmeet, acfe, big4, lev, roa, dan fsize variable, the following regression model was used: a.monique, i.harymawan /journal of accounting and business education, 6 (2), march 2022 19 arl = β0 + β1specialist*rpti,t + β2specialisti,t + β3rpti,t + β4bdsizei,t + β5bdindi,t + β6acmeeti,t + β7acfei,t + β8big4i,t + β9levi,t + β10roai,t +β11fsizei,t + β12industryi,t + β13yeari,t + ε the specialist independent variable was measured with market share based on total assets. regression was carried out with ordinary least square regression robustly. the regression results are presented in table 7. in table 7, the results of first model regression were used to test the first and second hypotheses in (1) and the results of the second model regression were used to test the third hypothesis in column (2). based on the results of the first model regression in column (1), it is found that auditor’s industrial specialization (specialist) negatively and significantly affects audit report lag. this result conforms to previous researches conducted by habib and bhuiyan (2011), whitworth and lambert (2014), and rusmin and evans (2017). the results of the first model regression in (1) also find that related party transaction (rpt) negatively and significantly affects audit report lag. this indicates that related party transaction, in this case being sale transaction, negatively and significantly affects audit report lag. this result supports the argument that related party transaction increases the efficiency of firm operation. this firm operation efficiency makes audit completed more quickly. the regression results of auditor’s industrial specialization in relation to related party transaction (specialist*rpt) on audit report lag in column (2) finds that auditor’s industrial specialization in relation to related party transaction affects audit report lag but insignificantly. the results of the first and second model regression indicate that the firms that use the services of industrial specialization auditor have shorter audit report lag, the firms that disclose high related party transaction also have shorter audit report lag, and auditor’s industrial specialization in relation to related party transaction does not affect audit report lag. as such, the regression results support the first and second hypotheses and reject the third hypothesis. conclusion in line with the learning curves theory, auditor that has audited an industry repeatedly gets more familiar with any risks and familiar with client’s business industry, and can be classified as industrial specialization auditor. using industrial specialization auditor’s services quickens audit completion and issuance of audit report and opinion. in other words, it shortens audit report lag. this research examined the influence of auditor’s industrial specialization on audit report lag and the influence of related party transaction and industrial specialization in relation to related party transaction on audit report lag in indonesia. the results of this research prove that specialized auditor can complete audit process more quickly. when an auditor gets more specialized, it will get more accustomed to the client’s business operation and risks, thus it completes an audit more quickly. this research also finds that high related party transaction increases firm efficiency thus auditor can complete an audit more quickly and audit report lag gets shorter. meanwhile, this research does not find any significant relationship between auditor’s industrial specialization in relation to related party transaction and audit report lag. this research’s implication for firm management is to suggest using audit service of an auditor specialized in the firm’s industry since such specialized auditor may shorten audit report lag. the limitation of this research is that it uses proxy of auditor’s industrial specialization with market share based on total assets and is limited to the period 2010-2017. further research should develop proxy of auditor’s industrial specialization with market share other than total assets and appropriate audit fee to the characteristics of the country of research subject, use proxy of other related party transaction, and update the year of observation. a.monique, i.harymawan /journal of accounting and business education, 6 (2), march 2022 20 references abernathy, j. l., beyer, b., masli, a., & stefaniak, c. 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(2017). costs of mandatory periodic audit partner rotation: evidence from audit fees and audit timeliness. auditing, 36(1), pp. 129–149. https://doi.org/10.2308/ajpt-51515 sultana, n., singh, h., & van der zahn, j. l. w. m. (2014). audit committee characteristics and audit report lag. international journal of auditing, 19(2), pp. 72–87. https://doi.org/10.1111/ijau.12033 whitworth, j. d., & lambert, t. a. (2014). office-level characteristics of the big 4 and audit report timeliness. auditing, 33(3), pp. 129–152. https://doi.org/10.2308/ajpt-50697 https://www.researchgate.net/deref/http%3a%2f%2fdx.doi.org%2f10.17576%2fpengurusan-2017-51-04 https://doi.org/10.1111/ijau.12033 https://doi.org/10.2308/ajpt-50697 y.c. seralurin, p.k. allolayuk, m.y. noch, v. pattiasina, e.y. tamaela/journal of accounting and business education, 6 (2), march 2022 41 factors affecting internal auditor performance: the moderation role of papuan culture-based development yohanes cores seralurin 1 paulus k. allolayuk 2 muhamad yamin noch 3 victor pattiasina 4 eduard yahannis tamaela 5 1,2 accounting department, faculty of economics and business, universitas cendrawasih papua, indonesia 3,4 accounting department, faculty of economics and business, universitas yapis papua, indonesia 5 college of administrative sciences of said perintah masohi, indonesia email: victorpattiasina6@gmail.com doi: http://dx.doi.org/10.26675/jabe.v6i2.16681 abstract: this study aimed to analyze the impact of locus of control, task complexity, and organizational commitment on internal auditor performance. the population of this study included all auditors at 4 (four) inspectorate offices in papua province (jayapura city, jayapura regency, keerom regency, and sarmi regency). the research samples were collected using a purposive sampling technique. the collected data were the processed using the moderated regression analysis (mra) technique. the results showed that locus of control had a significant effect on inspectorate internal auditor performance. task complexity had a negative effect on internal auditor performance. organizational commitment did not affect internal auditor performance. papuan culturebased development moderated the effect of locus of control on internal auditor performance. papuan culture-based development did not moderate the effect of task complexity on internal auditor performance, and traditional papuan culture baseddevelopment did not moderate the effect of organizational commitment on internal auditor performance. the finding implied that locus of control affected auditor performance, while tax complexity and organizational commitment did not affect auditor performance. article history received: 29 october 2020 revised: 15 september 2021 accepted: 20 january 2022 keywords earnings management, audit quality, good corporate governance, audit committee citation: seralurin, y.c., allolayuk, p.k., noch, m.y., pattiasina, v., & tamaela, e.y. (2022). factors affecting internal auditor performance: the moderation role of papuan culture-based development. journal of accounting and business education, 6(2), 41-53 introduction local institutions are essential elements for the development of a region. the inexistence of local institutions, bureaucracies and participants makes the infrastructure cannot be well built or maintained. public services cannot be well performed if the required technology is maximally utilized, and the government also cannot well maintain the flow of information needed by the public. thus, local institutions are a dominant factor, especially in mobilizing participation. in fact, community participation activities can be stimulated by the government’s and their owned initiatives (esman, 1984). journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v6i2.16681 y.c. seralurin, p.k. allolayuk, m.y. noch, v. pattiasina, e.y. tamaela/journal of accounting and business education, 6 (2), march 2022 42 in regional development process, it is necessary to have supervision both in financial reporting and other supervision, in this case, the regional inspectorate functioning as an auditor or internal examiner for regency/city government as well as provincial government responsible to regent/mayor and governor. as an internal government auditor, the inspectorate has the authority to do 3 (three) things; first, the supervision in the form of prevention from the reporting errors and accountability, prevention from the negligence of regional employees in implementing the systems and procedures, prevention from errors in the use of authority by the opd officials and prevention from the embezzlement and corruption occurring in the regions. respondents’ answers related to tax socialization in performing the audit function, the inspectorate must find all material errors occurring in the regional financial management, both errors in the presentation of numbers and due to the violations of specific procedures in financial management. third, guidance, that is, providing technical guidance to the proper financial management in accordance with the applicable laws and regulations following the accountability and transparency principles (pattiasina, 2020). in addition, due to the phenomena in papua where there were still corruption indications in the development of road infrastructure in the difficult-access areas, the budget was greatly limited so that the government required the auditors to maximally work. a papuan legislator, yan permenas mandenas, commanding the audit board of indonesia (bpk) and the financial and development supervisory agency (bpkp) to work, stated that if the audit board of indonesia and the financial and development supervisory agency maximally conducted the audit, then the potential for corruption indications possibly occurred in the construction of road infrastructure in the difficult-access areas, such as mountainous areas. yan permenas mandenas also said that papua government financial report’s status, namely the unqualified (wtp) bpk audit results in the last two years, was considered unnecessary when compared to the actual results. he denid that the budget for papua was small because when looking at the graphic growth since otsus, the budget for papua actually has continuously to increased (tamaela et al., 2020). therefore, this study is expected to reveal whether or not the auditors in papua had conducted the maximum supervisions. it was undeniable that there were corruption indications in its infrastructure development. the auditors actually can produce a satisfactory working performance by having an exemplary organizational commitment. for auditors, organizational commitment is the level of how far an auditor with an organization has the goals and intentions to maintain the organizational membership. it meant that a government auditor with high organizational commitment will grow a sense of belonging to the organization so that the auditor will feel happy and work as best as possible for the organization. this opinion is in line with the research conducted by (budiman, 2016) stating that organizational commitment had a significant effect on the performance of government auditors in the inspectorate of padang, padang panjang, and lubuk basung, agam regency, in which the high commitment provided high motivation and had a positive impact on the government auditor performance. in addition, task complexity could affect the performance of government auditors. task complexity was significant due to its tendency in conducting audit facing the complex problems, especially in the implementation of audit performance which should meet the applicable audit implementation standards. an internal auditor’s role can lead to a decision dilemma possibly affecting the performance of internal auditor (wahyuni, 2017). the difficulties faced by the internal auditors result in a lack of consensus on auditors and inaccuracies in the performance of audit judgment, resulting in the decreasing quality of audit judgment (lipe, 1992; seralurin et al., 2020). to improve the audit judgment performance, a locus of control is required by the internal auditor. locus of control could minimize an auditor’s deviant behaviors to achieve a higher performance level. locus of control is a personality or variable influencing and controlling the auditors’ deviant behaviors (arfan, 2005, tan & swan, 2020). apart from the locus of control, local culture is another factor which can guide everyone to well understands the related culture. (adiputra, 2014). the culture-based development of indigenous papuan included mapping 5 customary areas consisting of saereri area covering the districts in cenderawasih bay, mamberamo tabi (mamta) area covering the north coast of papua, la pago area covering the eastern side of central mountains, animha area in the south coast of papua, and mee pago area in the y.c. seralurin, p.k. allolayuk, m.y. noch, v. pattiasina, e.y. tamaela/journal of accounting and business education, 6 (2), march 2022 43 west side of central mountains. the division of those areas were based on cultural proximity, territorial proximity, and development proximity indicators. it was the basis for researchers to use the local culture elements. the culture-based development of papuan customary including five customary areas were used in this research due to the internal auditors of the inspectorate of several regencies/cities in papua province. the aforementioned factors had been studied by the previous researchers, including the results of a study conducted by (adiputra, 2014) discussing the local culture of bali province, known as tri hita karana culture as moderator. the effect of locus of control and task complexity on internal auditor performance stated that the locus of control, task complexity, and the moderation results of tri hita karana on locus of control and task complexity had a positive effect on the auditor’s internal performance. furthermore, the research conducted by (gautama et al., 2017) stated that locus of control did not affect the relationship between task complexity and auditor performance. this research was strengthened by that conducted by (budiman, 2016) stating that audit structure and locus of control did not affect auditor performance. this study was a replication of the previous studies’ conceptual models added with organizational commitment variable adopted from the research conducted by (pradana, 2014) and the culture-based development of indigenous papuan variable as a moderating variable of locus of control, task complexity, and organizational commitment to internal auditor performance. the purpose of this study was to analyze the effect of locus of control, task complexity, and organizational commitment on internal auditor performance and to figure out the impact of culture-based development of indigenous papuan as a moderating variable of locus of control, task complexity, and organizational commitment on internal auditor performance. the novelty of this research shows that the previous study did not add organizational commitment variable, while in this study, organizational commitment variable was used to examine the internal auditor performance. moreover, the novelty in this study was related to the auditors in the papuan customary territory, including the papuan culture-based development. in fact, there is no such research presented in this research paper. literature review and hypotheses agency theory agency theory has provided a valuable method to determine a complex contractual relationship called a modern company (jensen, 1983). itwas stated that an agency relationship is a contract in which one or more persons (the principal(s)) engage with another person (the agent) to take actions on behalf of the principal(s) involving the delegation of some decision-making authority to the agent. this explained the occurring phenomena when a distinguished principal delegates the authority to the subordinates to complete the task or authority in making decisions (anthony, 2011; bachri et al., 2021). the behavioral accounting research used agency theory based on thinking related to the information differences between superiors and subordinates. based on the agency theory, the principal (owner or top management) supervises the agent (lower employee or manager) to perform the task efficiently. agency theory assumes that the organizational efficient performance is determined by the effort and influence of environmental conditions (arfan, 2005). referring to auditing, both capital owner and agent are assumed to be those with economic rationality, where every action is motivated by personal interests or will to fulfil first before the others. attribution theory attribution theory studies the process of how someone interprets a behavioral event, reason, or cause (luthans, 2011). attribution theory develops the concept of different human judgment methods, depending on the meaning associated with a particular behavior. thus, humans’ perceptions and assessments are adequately influenced by the assumptions from the internal human conditions. attribution theory has a different assessing way in accordance with individual behaviors, then applying the evaluation style requires socialization so that the same perception occurs between superiors and y.c. seralurin, p.k. allolayuk, m.y. noch, v. pattiasina, e.y. tamaela/journal of accounting and business education, 6 (2), march 2022 44 subordinates to reduce dysfunctional behaviour. it enables the more in-depth evaluation to be processed on the current research. locus of control locus of control is one personality variable defined as an individual’s belief in his or her destiny (kreitner, 2005). locus of control consists of two parts: internal and external locus of control. according to (ayudiati, 2010), the characteristic differences between internal and external locus of control are as follows. (1) internal locus of control includes: a) eager to work hard, b) having high initiative, c) always trying to find solutions for the problems faced, d) always trying to think as effectively as possible, and e) having the perception that business must be done to obtain success; and (2) external locus of control includes: a) lack of initiative, b) easy to give up and lazy to do business, c) lack of information, d) hoping that there is little correlation between effort and success, and e) more impressed and dependent on people’s guidance. the results of another empirical study conducted by nasrullah deli (2014) stated that locus of control had a positive and significant effect on the internal auditor performance. similar results were also shown by the results of research conducted by iman supriadi et al., (2021) stating that locus of control had a positive and significant effect on of internal auditor performance. h1: locus of control has a positive effect on internal auditor performance task complexity task complexity has been recognized as an important task characteristic affecting human performance and behaviors (tarigan, 2016). it should be seriously taken into account into system design and evaluation, task design and evaluation, working organization, and studies on human system interaction, human performance and behavior, safety system, and so on (liu, 2017). a general theoretical task model is described in three basic components of all tasks: products, (required) actions, and knowledge codes (liu, 2017). these components are described and then used to extract three analytical dimensions of task complexity: component, teamwork and dynamic complexity (wood, 1989). meanwhile, (sanusi, 2007) argued that task complexity was unstructured, confusing, and challenging tasks. task complexity was defined as an individual’s task perception due to the limited capabilities and memory to integrate problems (jamilah, siti, 2007). h2: task complexity has a positive effect on internal auditor performance organizational commitment for auditors, organizational commitment is a level of how far an auditor with an organization with its goals intends to maintain the organizational membership. employees who have committed to an organization will defend their organization and try to improve their achievements. besides, someone who has committed to an organization will have a sense of belief to realize the organizational goals and encourage self-involvement in making decisions (marita, 2018). the undeveloped internal audit effectiveness will become a barrier for an organization to achieve the goals economically, efficiently and effectively (lijian, 2018). the results of the study conducted by m. shabri abd. majid (2016); ramha pura (2017), and made doni permana putra (2020) stated that organizational commitment had a positive and significant effect on auditor performance. h3: organizational commitment has a positive effect on internal auditor performance papuan culture-based development papuan local culture-based development was adopted as an organizational culture in this study. because a cultural value usually serves as the highest guideline for human behavior (sirrullah, 2020). the cultural value system consists of conceptions living in most people’s minds to consider anything valuable in life (ghorbani, 2012) papuan customary-based development describes the existing development y.c. seralurin, p.k. allolayuk, m.y. noch, v. pattiasina, e.y. tamaela/journal of accounting and business education, 6 (2), march 2022 45 approach in papua province which is divided into five customary areas. the papua’s development design in the next 20 years represents an expectation to achieve by the end of 2025. the big vision emphasized in the 20-year papua development scenario is “papua with social, cultural, economic and political independent”. this grand vision is realized with five missions: realizing social, cultural, economic and regional development, political, and realizing indigenous papuan people independence (papuabangkit.com, 2017). h4: papuan culture-based development moderates the relationship between locus of control and internal auditor performance h5: papuan culture-based development moderates the relationship between tax complexity and internal auditor performance h6: papuan culture-based development moderates the relationship between organizational commitment with internal auditor performance methods this study examined the effect of locus of control, task complexity, and organizational commitment on internal auditor performance with papuan culture-based development as a moderating variable, with the analytical model as shown in figure 1. figure 1. conceptual framework this research used a survey method conducted by distributing questionnaires in the large and small populations, but the research data were obtained from the samples taken from the related populations based on the relative incidents, distribution and relationship between variables, as well as the sociological and psychological aspects (sugiyono, 2014).in addition, the design in this study was included into quantitative research. quantitative research is a research method emphasizing the measurement aspects in an objective way towards the social phenomena translated into several problem components, variables, and indicators. this study aimed to test and analyze the internal auditor performance at the inspectorate office in papua province. by using a standardized and tested theoretical basis, this research was also classified as a descriptive study to explain the effect of variables by testing the previously formulated hypotheses. the research samples were 120 respondents collected using a purposive sampling technique. the sample criteria covered internal auditor working for at least one year, competent as internal auditor, already attending the basic technical guidance training (bimtek), understanding the knowledge related to the y.c. seralurin, p.k. allolayuk, m.y. noch, v. pattiasina, e.y. tamaela/journal of accounting and business education, 6 (2), march 2022 46 papuan traditional territory based-development. the research data were then statistically analyzed using the amos structural equation modeling (sem) based on the goodness of fit index technique, regression weight analysis, and confirmatory factor analysis (cfa), equipped with the sem software amos version 24 and spss version 25. the data analysis tests included the descriptive statistical analysis, model assumption test, and hypothesis testing. results and discussion description of respondents the researcher successfully distributed the questionnaires to all 120 target respondents. table 1 summarizes the respondents’ characteristics. table 1. respondents’ characteristics frequency (n) percentage (%) sex male 77 64.2 female 43 35.8 education diploma 13 10.8 bachelor 62 51.7 master 45 37.5 doctoral 0 0 age 21-30 years old 39 32.5 31-40 years old 47 39.2 41-50 years old 29 24.1 above 50 years old 5 4.2 based on the data shown in table 1 above, most respondents (77 or 64.2%) were male with the education level of bachelor degree (62 or 51.7%) and age range of 31-40 years old. these indicated that the respondents were quite mature to answer the questions given. the definition of research variables is related to the respondent’s explanation of each variable. the tendency is based on the average response score. for each element, the distribution of each respondent group is explained on table 2. the table above presents the data on the interpretation of respondents’ responses to tax information, translated into three statements with the average of 4.37. it meant that the respondents tended to agree that locus of control affected internal auditor performance. these results also illustrated that loc1 and loc2were relatively good when compared to others with the average highest answer score of 4.38. it meant that the respondents tended to agree that the increasing organizational commitment affected internal auditor performance. these results also illustrated that kmo1 was relatively good when compared to others with the highest average answer score of 4.36. the table 3 presents the data related to the respondents’ perceptions on papuan traditional culturebased development translated into three statements with the average of 4.06. it meant that the respondents tended to agree with the statement of development based on papuan culture. these results illustrated that pbp3 was relatively good when compared to the others with the highest average answer score of 4.18. the table 3 presents the data related to the respondents’ perceptions on auditor internal performance described into three statements with the average of 4.26. it meant that the respondents tended to agree with the statement of development based on papuan traditional culture. these results also y.c. seralurin, p.k. allolayuk, m.y. noch, v. pattiasina, e.y. tamaela/journal of accounting and business education, 6 (2), march 2022 47 illustrated that kia2 was relatively good when compared to the others with the highest average answer score of 4.29. table 2 respondents’ answers related to locus of control answer score loc1 loc2 loc3 total f % f % f % 1 0 0.0 0 0.0 0 0.0 0 2 0 0.0 0 0.0 0 0.0 0 3 8 6.7 8 6.7 7 5.8 69 4 61 50.8 59 49.2 60 50.0 720 5 51 42.5 53 44.2 53 44.2 785 total 120 100 120 100 120 100 1574 average 4.36 4.38 4.38 4.37 note: loc1: my promotion in an organization depends on my abilities. loc2: success or failure depends on the number of efforts. loc3: when i well prepare the plans, i am sure that the plans will also work well. table 3 respondents’ answers on the development based on papuan indigenous culture answer score pbp1 pbp2 pbp3 total f % f % f % 1 0 0.0 0 0.0 0 0.0 0 2 0 0.0 0 0.0 0 0.0 0 3 29 24.2 25 20.8 19 15.8 219 4 58 48.3 75 62.5 61 50.8 776 5 33 27.5 20 16.7 40 33.3 465 total 120 100 120 100 120 100 1460 average 4.03 3.96 4.18 4.06 note: pbp1: in conducting supervision/inspection to the development programs based on traditional culture, the inspectorate is always guided by the governor of papua’s vision and missions. pbp2: i continue to monitor the regional superior commodity development program. pbp3: the examination that i perform is able to eliminate mistakes/deviations from the leading commodity development program happening so far. table 4. respondents’ answers related to internal auditor performance answer score kia1 kia2 kia3 total f % f % f % 1 0 0.0 0 0.0 0 0.0 0 2 0 0.0 0 0.0 0 0.0 0 3 12 10.0 17 14.2 10 8.3 117 4 64 53.3 51 42.5 75 62.5 760 5 44 36.7 52 43.3 35 29.2 655 total 120 100 120 100 120 100 1532 average 4.27 4.29 4.21 4.26 note: kia1: developing an audit program. kia2: proposing audit time budget allocations for each type of activity during audit processes. kia3: inspection schedule following the annual working plan y.c. seralurin, p.k. allolayuk, m.y. noch, v. pattiasina, e.y. tamaela/journal of accounting and business education, 6 (2), march 2022 48 goodness of fit a structural model is categorized as a goodness of fit when meeting several requirements. the following is the model suitability index to test whether a model can be accepted or rejected. table 5. goodness s of fit goodness s of fit index value cut-off value assumption chi-square (χ2) 96.091 < 66.339 (df=80) fit significance probability 0.106 ≥ 0.05 fit cmin/df 1.201 ≤ 2.0 fit rmsea 0.041 ≤ 0.08 fit cfi 0.971 ≥ 0.95 fit tli 0.962 ≥ 0.95 fit gfi 0.908 ≥ 0.90 fit source: processed data (2020) based on the goodness s of fit test, it could be seen that all indices were shown in the table had met the reasonable assumption. thus, it could be concluded that the model was appropriate and the proposed model was good. the path equation coefficient the structural equation modeling (sem) analysis testing was conducted using the sem software amos version 24with the following cfa test table. table 6. confirmatory factor analysis (cfa) influence type endogen variable standardized estimation loc kmt kmo pbp direct internal auditor performance 0.510 -0.371 -0.086 -0.014 source: processed data (2020) note: loc: locus of control. kmt: task complexity. kmo: organizational commitment. pbp: development based on papuan traditional culture based on the table of confirmatory factor analysis results above, equation i for the structural equation modeling (sem) research was explained as follows. equation i  kia= 0.510 loc + -0.371 kmt + -0.086+ -0.014 + z1 a) the locus of control regression coefficient was 0.510. this indicated that each increase in locus of control, the internal auditor performance increased the locus of control coefficient value by 0.031. b) the task complexity regression coefficient was -0.371. this indicated that each increase in one task unit of complexity decreased the internal auditor performance by -0.371. c) the organizational commitment regression coefficient was -0.086. this indicated that each increase in one unit of organizational commitment role decreased the internal auditor performance value through the organizational commitment coefficient by -0.086. y.c. seralurin, p.k. allolayuk, m.y. noch, v. pattiasina, e.y. tamaela/journal of accounting and business education, 6 (2), march 2022 49 d) the papuan indigenous culture-based development regression coefficient was -0.014. this indicated that each increase in papuan indigenous culture-based development decreased the auditor internal performance through the papuan culture-based development coefficient value by-0.014. moderation equation coefficient the moderating variable was statistically manifested in predictor and moderator (hayes, 2017). in this study, the interaction variables consisting of pbp_loc (multiplication between development based on papuan traditional culture and locus of control), pbp_kmt (multiplication between papuan customary culture-based development and task complexity), pbp_kmo (multiplication between papuan customary culture-based development and commitment organization) were labeled. table 7. confirmatory factor analysis (cfa) endogen variable standardized estimate loc kmt kmo pbp_loc pbp_kmt pbp_kmo internal auditor performance -0.037 0.120 0.030 0.794 -0.513 -0.084 source: processed data (2020) based on the table of confirmatory factor analysis results above, after adding the interaction variable, the moderating equation for structural equation modeling (sem) research could be explained as follows: equation ii kia = -0.037 loc + 0.120 kmt + 0.030 kmo + 0.794 pbp_loc +0.513 pbp_kmt + 0.084 pbp_kmo + z2 the moderating equation structural equation modeling (sem) explained that the interaction between papuan indigenous culture-based development and locus of control had a positive regression coefficient of 0.794 with the significance value of 0.003 <0.05. moreover, the interaction between papuan indigenous culture-based development and task complexity had a negative regression coefficient of 0.513 with the significance value of 0.002 <0.05. next, the interaction between papuan indigenous culture-based development and organizational commitment had a negative regression coefficient of 0.084 with the sign. value of 0.002 <0.05. regression weight test path equation this study used z-test for the research hypothesis testing seen from the c.r. value with the significance level of 5%. the testing criteria are if c.r. > 1.96, then the hypothesis is accepted. it meant that there was a direct partial effect of locus of control, task complexity, and organizational commitment with internal auditor performance as shown in the following table. table 8. regression weight analysis of partial test results on path equations endogen exogen c.r. ρ internal auditor performance <--locus of control 3.316 0.001 internal auditor performance <--task complexity -3.195 0.001 internal auditor performance <--organizational commitment -0.616 0.538 source: processed data, sem amos output (2020) the calculation results show that locus of control positively and significantly affected internal auditor performance with the c.r. value of 3.316 > 1.96 and a significant value of 0.001 <0.05. it meant that locus of control positively and significantly positive affected internal auditor performance. these results indicated that the research respondents categorized into internal loc affected auditor performance y.c. seralurin, p.k. allolayuk, m.y. noch, v. pattiasina, e.y. tamaela/journal of accounting and business education, 6 (2), march 2022 50 at the government inspectorate office. someone with the internal locus of control viewed the world as something predictable and individual behavior played an important role. those were individuals believing that they were responsible for their working behaviors in the related organization (adiputra, 2014). task complexity negatively but significantly affected internal auditor performance with the significance value of 0.001 <0.05. it meant that task complexity had a significant adverse effect on internal auditor performance. the test results were in line with the research conducted by (gautama et al., 2017), stating that task complexity negatively affected internal auditor performance. it could be concluded that the higher the task complexity experienced by an auditing auditor , the performance will decrease (gautama et al., 2017). organizational commitment negatively but significantly affected internal auditor performance with thew cr value of -0.616 <1.96 and significance value of 0.538> 0.05 greater than the expected significance level. this meant that organizational commitment did not significantly affect internal auditor performance. the test results was in contrary with those of research conducted by (budiman, 2016) stating that organizational commitment positively and significantly affected the government auditors’ performance at the inspectorate of padang city. in this case, most respondents did not give their best ability and loyalty to their organization, because if the members of an organization are committed to their organization, then they will have a high commitment to the organization. moderation equation based on the results of data processing obtained in the table 9, papuan culture-based development, as the moderating variable, positively and significantly affected locus of control on internal auditor performance with the c.r. value of 4.094 > 1.96 and significant value of 0.001 <0.05 following the expected significance level of less than 0.05. it meant that papuan indigenous culture-based development moderated the effect between locus of control with internal auditor performance. the moderating variable in this study had a positive regression coefficient strengthening the relationship between taxpayer awareness and taxpayer compliance and was classified as quasi moderator, in which locus of control significantly affected internal auditor performance in the first output and interaction effect (pbp_loc) in the second output. in addition, it can be seen from the table above that papuan indigenous culture-based development, as the moderating variable negatively but significantly affected task complexity on internal auditor performance with the c.r. value of -0.505 <1.96 and significance value of 0.001 <0.05. thus, it could be concluded that papuan culture-based development could moderate the relationship between task complexity and internal auditor performance. it also indicated that the moderation effect given was negative and the development based on traditional papuan culture could not reduce the negative effect of task complexity on internal auditor performance. the test results were in line with the research conducted by (gautama et al., 2017). locus of control results did not affect the relationship between task complexity and auditor performance at the public accountant offices in bali province. in this case, the auditors in the inspectorate office of papua province, indicated that the implementation of papuan indigenous culture-based development was not able to reduce the negative impact of task complexity presumably due to a lack of coordination of managers with the senior and junior auditors in the division of tasks. thus, task complexity could reduce the auditors’ performance. table 9. regression weight analysis of partial test results on moderation equation endogen exogen c.r. ρ internal auditor performance <--pbp_loc 4.094 0.001 internal auditor performance <--pbp_kmt -0.505 0.001 internal auditor performance <--pbp_kmo -3.650 0.614 source: processed data, sem amos output (2020) finally, based on the table above, papuan culture-based development as a moderating variable negatively but significantly affected organizational commitment to internal auditor performance with y.c. seralurin, p.k. allolayuk, m.y. noch, v. pattiasina, e.y. tamaela/journal of accounting and business education, 6 (2), march 2022 51 the c.r. value of -3.650 <1.96 and a significance value of 0.614> 0.05. thus, it can be concluded that papuan culture-based development did not moderate the relationship between organizational commitment and internal auditor performance. in this case, the auditors in papua province, especially in the traditional region of tabi, show that the implementation of papuan indigenous cultural development agency had not been able to affect the auditors to ensure that they had the best ability and loyalty to their organizations, because if the members of organization were committed to their organizations, they would have a high commitment. conclusion based on the research results, the researchers had some conclusions. first, locus of control had a positive and significant effect on internal auditor performance. locus of control had a negative and significant effect on internal auditor performance. meanwhile, organizational commitment did not have a significant effect on 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(1989). social cognitive theory of organizational management. academy of management review, 14, 361–384. p. priyanto /journal of accounting and business education, 5 (2), march 2021 9 the value of garp investing: evidence from the indonesian stock exchange panji priyanto stie jakarta international college, indonesia email: panji.priyanto@jic.ac.id doi: http://dx.doi.org/10.26675/jabe.v5i2.15743 abstract: the purpose of this study was to examine whether or not the garp in selecting the stock portfolios can provide a more stable growth rate of return when compared to the value stock and growth stock as well as to examine the stock return on value stock and growth stock based on the changes in its fundamentals. the population in this study was all companies listed on the indonesia stock exchange (known as idx) in the period of 2015-2019. the samples were selected using a comparative-quantitative approach and consisted of 20 companies: seven companies included in the value stock portfolio category and ten companies included in the portfolio category. growth stock and three companies were included in the garp's stock portfolio category. the formation of stock portfolios in the company's fundamentals was based on price to book value ratio, price-earnings ratio, and price-earnings growth ratio. this study used the anova method equipped with spss by performing four tests: homogeneity of variance, betweensubject, post hoc, and homogenous subset test. the results of this study show that there were differences in the portfolio return of value stocks, growth stocks, and garp stocks on the indonesia stock exchange in the period of 2015-2019. meanwhile, the garp investment strategy was stable for the growth when compared to the value investment and growth investment in the indonesia stock exchange in the period of 2015-2019. the implementation of garp concept in managing the investment portfolios and criteria for choosing the stocks have the profitable growth, first in forming the garp because investors in the stock market tend to expect obtaining high investment returns with a limited time horizon. the implementation of garp concept has prevented the investors from the value trap because the garp strategy is a hybrid solution for the growth stock and value stock, thus. the garp investors will experience a combination of returns. article history received: 25 august 2020 revised: 28 february 2021 accepted: 5 maret 2021 keywords garp investment, stock portfolio, company’s fundamentals, indonesia stock exchange citation: priyanto, p. (2020). the value of garp investing: evidence from the indonesia stock exchange. journal of accounting and business education, 5(1), 9-20 introduction in capital market, there are various types of investors with various investment methods. in stock development, there are various concepts in selecting stocks to be purchased by the investors, including value investment, investment growth, and others to be performed in this study, namely the growth-at-areasonable price (garp). every investor has different views and ways of thinking in examining the present value and estimating the future value of a company. so, there are differences in the list of stocks included in the portfolios, including value stocks, growth stocks, and garp stocks. topics on value stocks and growth stocks have spread throughout the world and invite academicians to conduct the related research. various researchers, such as fama & french (1998), chan journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ mailto:panji.priyanto@jic.ac.id http://dx.doi.org/10.26675/jabe.v5i2.15743 p. priyanto /journal of accounting and business education, 5 (2), march 2021 10 & lakonishok (2004), and scott bauman & miller (1997), examined the return, risk, and overall performance of value stocks and growth stocks. the results of this study indicated that value stocks tended to produce a higher return than growth stocks did or better known as value premium phenomenon. in the previous research conducted by sumantika (2016) on the rate of return of value stock and growth stock: comparison based on the company’s fundamentals and holding period, the results show that the value of stocks were classified as a loser at t-1 became a winner at t + 1. at the same time, stock growth stocks were classified as a winner at t-1 became a loser at t + 1. however, in the long run (10-year holding period), the researcher found no guarantee that the value of stocks outperformed the stock growth. these stock values generated a higher level, especially when there was a positive change in the company (undervalued stock value). on the other hand, the growth stock will produce the lowest rate, especially when investors realize that the actual growth is lower than the expected growth rate or, in other words, when there are problems in terms of company's financial performance. a study focusing on the emerging markets, that is, the singapore capital market conducted by hodnett & hsieh (2012) tried to identify stocks with the above-average sales growth trading at a multiple average or below average price-to-sale. their performance related to the pure growth portfolios was further analyzed. after using various historical growth rates compared to the previous month, prior year, historical lows and highs as measures of potential growth and some price-to-sales as measures of stock price fairness, the growth-on-fair price (garp) portfolios on the taiwan stock exchange in the period of 1 january 2000-31 march 2010. the results of the study show that garp's portfolios outperformed its partners' pure growth portfolios during the review period. the additional contribution of garp as measured in terms of the increased return, reduced risk, and increased sharpe ratio when switching from the pure growth stock selection technique to garp selection technique, was proven significant during the examination period. in contrast to the previous research, hussaini (2016) who conducted a research in thailand, found some evidence that stock value did not produce an average monthly profit higher than growth stock or that there was no value premium phenomenon. return value stock and growth stock cannot differ outside of the us capital market due to the differences in ways investors behaved in these markets (rasul, 2011). bauman & johnson (1996) also stated that the quality and information of investment research information varied from country to country. based on these findings, this research was essential to conduct in the indonesian capital market because the performance of indonesian capital market is one of the best capital markets in the world. the indonesian capital market has a long life and becomes the oldest in southeast asia, while in asia, the indonesian capital market ranked the fourth after bombay in 1830, hong kong in 1981, and tokyo in 1871. the emergence of growth at reasonable price (garp) itself is a solution to the weaknesses of two investment concepts. a concept combines the value investment and investment growth and selects stocks with the constant growth. the basic concept for garp is to find stocks made to grow but sell at a fair price. garp itself does not need to buy stocks at a significant discount. finding a bright business growing over a long term and selling at a fair price are the garp's main goals. the question of this research is related to how the concept of investment is. garp can outperform the other investment concepts, such as value investment and growth investment. of course, garp's strategy does not just pay off the peg ratio. according to investors, garp is the view that profitable growth can only be obtained if the financial conditions are stable. the capital structure is included in these criteria. the oversized debt also toppled the ship portfolios when the wind reversed. furthermore, a reasonably high roe is one indicator to use as a guide for finding the garp stocks. the favoritism of value stocks in the empirical literature raises the question whether or not the investors indeed overvalue the perceived prospects of growth stocks. broussard et al (2005) argued that the superiority of value investment could be attributed to either the assertion that the stock value is a risk, or to the misspecification of growth manifested by the investors. baker & nofsinger (2011) argued that investors often labeled the good companies with strong past performance as the suitable investments without considering the sustainability of past performance and cost of investment. this argument implies that the growth of investors should be more discipline about the price they pay for the firms’ future p. priyanto /journal of accounting and business education, 5 (2), march 2021 11 growth prospects. the concept of growth-at-a-reasonable-price (garp) investment strategy is essentially a strategy that seeks stocks with the above-average earnings growth and average or below-average price multiples. this study tried to draw a comparison between performances of portfolios formed based on the pure growth criteria and portfolios formed based on the selection criteria of garp on the indonesia stock exchange in the period of 2015-2019. the purpose of this study was to examine whether the selection of garp stock portfolios can provide a more stable growth rate of return compared to the value stock and growth stock and to examine the stock return on value stock and growth stock based on changes in its fundamentals. perhaps, the main benefit of these strategies is the displacement of a systematic framework, so that they can allocate to compel the growth stories, even if only when they trade with some reasonable facts. literature review and hypotheses portfolio theory stuart & markowitz (1959) said that the portfolio must be diversified to reduce risk. optimal portfolio formation by using the markowitz model on the jii index, found the results to form an optimal portfolio. an investor can diversify stocks, by choosing some incoming stock portfolios and the certification process can reduce the risk level by collecting some different stocks (yunita, 2018). a stock portfolio consists of several companies’ stocks different from the expectation when there is one decreasing stock, while the others increase, and consequently the investment has not suffered a loss. furthermore, the correlation between returns of one stock and another will also reduce the variance of return of the portfolio (zubir, 2011). the more the types of investment are selected, the less the investment risks will be. however, the number of excess portfolios can also be bad. a fat or excess portfolio will cause excessive costs. so, profits will be reduced due to the many incurring costs. there are limitations in preparing an investment portfolio. risks that will always arise and cannot be eliminated by the diversification are known as systematic risks. meanwhile, the unsystematic risk which can be eliminated or reduced by diversification and addition of all existing risks is known as portfolio total risk. the portfolio risk is then well-diversified depending on the market risk of each stock included in the portfolio (husnan, 2008). risk is how likely it is that the realized profit rate will be deviated from the expected rate of profit (djaja et al., 2015). sharpe was developed by willian sharpe and is frequently referred to as the reward-to-variability ratio. based on the sharpe index calculations, the capital market line concept is a benchmark created by dividing the portfolio risk premium by its standard deviation. treynor developed by jack treynor is also called the reward to volume ratio, and the treynor index is different from the sharpe index because the treynor index uses the security market line as a benchmark, and not the capital market line used by the sharpe index. then, treynor assumes that the portfolio is well identified so that the relevant friendly risk is the systematic risk (measured by beta). jensen is an index that shows the difference between the actual rate of return obtained by the portfolio and the expected rate of return if the portfolio is on the market line capital. this jensen index exceeds the returns above or below the security market line (tandelilin, 2010). the portfolio performance measurement also can be done by using the treynor index. the index developed by jack treynor is often called the reward to volatility ratio. according to hartono (2013), "the portfolio performance calculated by this gauge is done by dividing the excess return with the portfolio volatility." furthermore, tandelilin (2010), mentioned that the measurement of portfolio performance using the treynor index is seen by connecting the portfolio return rate with the risk of portfolio by assuming that the portfolio is well diversified so that the relevant risk is measured by beta. if a portfolio is not well-diversified, the ranking obtained between the sharpe and treynor indices will be different. in addition to these two indices, tandelilin (2010) argued that portfolio performance can also be measured using the jensen index to show the difference between the actual rate of return obtained by the portfolio and the expected rate of return if the portfolio is on the capital market line. just like the treynor p. priyanto /journal of accounting and business education, 5 (2), march 2021 12 index activity, this measuring tool method assumes that the portfolio is fully diversified so that the only risk to the portfolio is systematic. growth at reasonable price (garp) garp investment is a disciplined growth investing approach rather than a new investment style scott et al. (2003) investigated the effects of behavioral biases in the stock market valuation by analyzing the returns on portfolios with different intersections between their respective earnings growth and p/e ratio rankings. the study results provide some evidence related to the merits for the value investment over the period of 1989-1997. according to the standard & poor's guide for selecting stocks, published in 2005, the primary screens for garp stocks is the p/e-to-growth (peg) ratio, and garp investors should avoid stocks with above-average debt-to-equity ratio and below-average return-on-equity (roe). these criteria prevent firms that are overpriced and firms that employ leverage to maintain their high growth levels to be included in the portfolio (damodaran, 2012). ahmed & nanda (2001) argued that value and growth investment strategies should not be mutually exclusive. in particular, the substantial growth in earnings is a better proxy for identifying the growth stocks when compared to the p/e ratio. adopting a strategy selecting stocks with low p/e ratio and high earnings growth (virtually a garp investment strategy), ahmed & nanda (2001) found the new strategy to outperform the traditional low p/e investment strategy on a risk-adjusted basis over the period of 1982-1997. an investigation on the responsiveness of growth stocks and value stocks to earnings announcements conducted by gulen et al. (2011) revealed that value stocks responded more drastically to positive earnings surprises and were less sensitive to negative earnings surprises. thus, growth investment could be subject to higher downside risk compared to the value investment. the results of study conducted by fama & french (1998) and (gulen et al., 2011) implied that growth stocks are more likely to be overpriced when compared to the value stocks. a research conducted by hidayat & hendrawan (2017) examined the portfolio making using per and peg at an index of lq 45 in the selection of a list of stocks in the portfolio and found that a stock was relatively undervalued and had a high return versus the average return obtained by the jci market return. tobin's q model and per portfolio with compass index sample of 100 obtained a return of above the jci market. if the investors exchange portfolios, more active semester strategies will obtain higher returns when compared to a passive strategy, by forming a portfolio, in the long run, more than one-year (hendrawan & salim, 2017). heisler et al. (2007) analyzed the relationship between asset growth and abnormal returns for global stocks comprising the msci world composite. the research results indicated that the significant return predictive power of asset growth (2-year total asset growth in particular) was proven over the examination period of 1985-2009 when the size and p/b factors were taken into account. a fundamental analysis with the price/earnings to growth ratio is one way to gather information related to the fair stock value based on the company's financial statements. although it seems complicated, the information obtained is very useful in making the investment decisions. there are many other financial ratios in a fundamental analysis in which investors can use, while the numbers needed to calculate the average financial ratio can be obtained from the balance sheet, income statement, and cash flow statement. one of financial ratios in the fundamental analysis of stocks, function of price/profit to growth ratio is as essential as the other ratios since providing an overview related to the fair stock price by applying the method of use. the price/income to growth ratio (peg ratio) can be briefly interpreted as a ratio measuring a fair price based on the potential increase in the future company profits. for an analyst, this ratio provides a complete picture of price-to-earnings (per) ratio because it includes the earnings per share (eps) growth factor or earnings per share in calculation. we call this eps growth factor as the earnings per share (eps) growth rate. in selecting the stocks using the garp (growth at a fair price) investment method, the peg ratio must include a computation. this method looks for stocks with a reasonable increase in the stock price based on the stock performance itself. p. priyanto /journal of accounting and business education, 5 (2), march 2021 13 company’s fundamentals fundamental analysis is the investment cornerstone. the most significant part of fundamental analysis involves digging up the financial statements and doing the quantitative analysis, which involves looking at the income, expenses, assets, liabilities, and all other financial aspects of the company to gain insight into the company's future performance (drakopoulou, 2016). according to tandelilin (2010), when fundamentally analyzing companies, the investors can choose those appropriate as investment alternatives (tandelilin, 2010). this fundamental analysis states that every investment instrument has a strong foundation, namely the intrinsic value to determine through a careful analysis for the recent conditions and prospects for the future. some experts think that fundamental analysis techniques are more appropriate for making decisions to choose which company stocks should be purchased for a long-term investment (abdulmannan & faturohman, 2015). based on the above theories and previous research on value stock and growth stock, the research hypotheses were formulated as follows: h1: there are differences in the portfolio return of value stocks, growth stocks, and garp stocks on the indonesia stock exchange in the period of 2015-2019. h2: garp stocks are more stable for growth when compared to value stocks and growth stocks on the indonesia stock exchange in the period of 2015-2019. methods research variable the selection of value stocks was measured by looking at stocks with cheap valuations, such as price-book value (p/bv) ratio below one or p/e ratio below 10 in which p/bv is the ratio between stock value and book value of a company. if the stock price is below the book value of a company, the stock can be categorized as cheap. meanwhile, the p/e ratio is the ratio between stock prices and company profits. the rule of thumb for cheap stocks is that the p/e ratio is below 10, but it is often necessary to compare it with its peers or the industry first. the gaps between cheap valuations and stock price increases which have not yet emerged are usually caused by a lack of information obtained, the difficulty of investors in obtaining information, and the existence of poor corporate governance. for the criteria in selecting the growth stocks, stocks which have a high valuation value and have a profit growth of above 10% per year for three consecutive years. the ratio used to determine stocks which are included in the garp category is stocks which have the p/e growth (peg) below 1. the momentum of buying and selling stocks is included in the garp category using the standard deviation as a benchmark, namely the last 5year standard deviation as a measure to determine when to buy and sell the stocks in the garp category—selling when the stock's valuation is +1 or +2 standard deviation and buying when the stock's valuation is -1 or -2 standard deviation. samples determination this study used a quantitative approach in a comparative form. the research was conducted to all companies listed on the indonesia stock exchange (idx) in the period of 2015-2019. the population in this study included all companies listed on the indonesia stock exchange in the period of 2015-2019. to measure the idx value category, 30 indices measured the price performance of 30 stocks which have low price valuations with adequate transaction liquidity and financial performance. meanwhile, the 30-idx growth category measurement is an index measuring the price performance of 30 stocks that have a relative price trend of net profit and income growth with adequate transaction liquidity and financial performance. (https://www.idx.co.id/produk/indeks/). the samples used in this study were selected using a purposive sampling technique. based on the predetermined sample criteria, 20 companies were obtained as the research samples consisting of 7 companies included in the value stock portfolio category, ten companies included in the growth stock portfolio category, and three companies included in the garp stock portfolio category. the procedures to p. priyanto /journal of accounting and business education, 5 (2), march 2021 14 form a portfolio of growth and value stock were based on the company's pbv and p/e ratio values. for selecting the stocks, including garp stocks, the researchers selected the value stocks and growth stocks category before selecting the garp stocks by making a calculation to find the p/e growth (peg). the following is a table for selecting stocks categorized as value stocks, growth stocks and garp stocks according to the sample criteria in the research method. the samples in this study were companies selected from the population using a purposive sampling technique. first, companies with negative pbv and pe ratios in the year of portfolio formation were excluded from the samples because negative ratios cannot be interpreted in terms of the expected growth rates. second, companies included in the value stock category were those with a price book value (p/bv) ratio below one or p/e ratio below 10, and for the growth selection criteria, stocks belonging to companies which valuation value has the profit growth of 10% per year for 3 (three) consecutive years. third, company shares not traded during the period of portfolio formation up to the period of calculating the portfolio performance were excluded from the samples. fourth, the company shares included in the value stock category during the period of portfolio formation, which then turned into growth stocks within a period of one year to 3 years after portfolio formation or vice versa, were excluded from the samples. these were performed since each category's returns can be compared for one to three years after the formation of portfolios. method of analysis this study used the anova method equipped with spss by performing four tests: homogeneity of variance, between-subjects, post hoc, and homogenous subset tests. this method used to examine the relationship between one independent variable and one or more independent variables (ghozali & ratmono, 2017). the determined variable in this research was the portfolio return. portfolio return is the imbalance received by the investors on a set of securities or assets they own. portfolio returns in this study included sharpe measure and sharpe measure of risk with a standard deviation as the real risk of all owned portfolios. portfolio performance using the sharpe measurement was calculated using the following formula (jogiyanto, 2010): rvar = ............................................................................................. (1) information: rvar = reward to variability or the sharpe meter = the average return on the total portfolio in a certain period = the average risk-free return on assets within a certain period = portfolio excess return descriptive statistical and difference tests analyzed this study. difference test was used to explain whether there were differences in portfolio returns between value stocks, growth stocks, and garp stocks, while descriptive statistical test was used to explain whether the portfolio returns were value stock, growth stock, and garp stock, or vice versa. different tests can be done with the parametric statistics and non-parametric statistics. if the data were normally distributed, the difference test was brought with the parametric statistical test, namely, the independent sample t-test, but if the data were not normally distributed, the difference test was brought with non-parametric statistical test, namely the mann whitney test (ghozali & ratmono, 2017). the level of significance used in this study was 0.05. if the p-value difference test is <0.05, there is a significant difference in portfolio returns between a value stock and growth stock. if the p-value difference test is > 0.05, there is no significant difference in riskadjusted return between stock value and growth stock. p. priyanto /journal of accounting and business education, 5 (2), march 2021 15 results and discussion to see the p/e growth (peg) ratio, in which the peg ratio is a financial ratio developed from per by adding a growth component in the calculation. the peg ratio is trusted to provide a complete calculation because a high per ratio is not necessarily an overvalued stock if it is supported by high eps growth. by following per under the criteria for selecting garp stocks, in which the ratio used to determine stocks including in the garp category were stocks which have the p/e growth (peg) below 1. peg ratio = price to earnings ratio (per) eps growth table 1. portfolio of value stocks, growth stocks and garp stocks in a period of 2015-2019 no stock code name of company pbv ratio pe ratio pe growth portfolio 1 bnga bank cimb niaga tbk. 0.67 20.80 -1.86 value stocks 2 adro adaro energy tbk. 0.77 9.05 -1.55 value stocks 3 essa surya esa perkasa tbk. 0.93 126.40 -1.55 value stocks 4 elsa elnusa tbk. 0.86 9.25 -0.74 value stocks 5 asri alam sutera realty tbk. 0.84 7.93 -0.41 value stocks 6 inkp indah kiat pulp & paper tbk. 0.69 4.72 0.01 garp stocks 7 eraa erajaya swasembada tbk. 0.95 7.58 0.44 garp stocks 8 pnbn bank pan indonesia tbk 0.70 10.97 0.73 value stocks 9 bmtr global mediacom tbk. 0.56 67.72 0.76 value stocks 10 pnlf panin financial tbk. 0.36 5.39 0.91 garp stocks 11 bbni bank negara indonesia (persero) tbk. 1.46 11.11 0.36 growth stocks 12 bdmn bank danamon indonesia tbk. 1.50 17.11 1.32 growth stocks 13 bbri bank rakyat indonesia (persero) tbk. 2.46 13.34 1.34 growth stocks 14 ggrm gudang garam tbk. 3.52 20.14 1.68 growth stocks 15 tlkm telekomunikasi indonesia (persero) tbk. 3.74 20.16 1.97 growth stocks 16 bbca bank central asia tbk. 4.10 22.74 0.67 growth stocks 17 icbp indofood cbp sukses makmur tbk. 5.36 26.65 1.43 growth stocks 18 aces ace hardware indonesia tbk. 6.15 26.73 1.33 growth stocks 19 myor mayora indah tbk. 6.63 33.77 0.14 growth stocks 20 cpin charoen pokphand indonesia tbk 6.65 21.86 1.86 growth stocks source: processed secondary data, 2020 based on table 1, the results of stock selection show that the value stocks categorized as stocks with cheap valuations were with the p/bv ratio of below one or p/e ratio of below 10. one example of the research results was the adro stocks which have the p/bv ratio of 0.67, p/e ratio of 9.05, and peg ratio of -1.55. it means that the value stocks were not categorized as the garp stocks. furthermore, the results of stock selection categorized as the growth stocks, in which the valuation was already high due to the continuous re-rating and growth of above 10% per year for three consecutive years. one example of the research results was the ggrm stocks as seen from the 30-idx growth index. furthermore, it was also not categorized as a garp stock because its p/e ratio was above ten and did not comply with the terms of garp stock category. for the selection of garp stocks, the results obtained from this study were inkp, eraa, and pnlf, as seen from the p/e ratio of below ten and the peg ratio of below 1. based on table 1 above, there were three stocks categorized into the garp stock criteria with the stock codes of inkp, eraa and pnlf by following the criteria of the research samples for stocks price/ earnings to growth < 1 1 > 1 undervalued normal price overvalued p. priyanto /journal of accounting and business education, 5 (2), march 2021 16 categorized as garp stocks, namely the pbv ratio of below 1, p/e ratio of below ten, and p/e growth ratio (peg) of less than 1 (undervalued). table 2. one way anova test anova rate of return sum of squares df mean square f sig. between groups 14.399 2 7.200 11.210 .001 within groups 10.919 17 .642 total 25.318 19 based on table 2, the one-way test results based on the spss output (anova) above shows that the significance value was more significant than 0.05 (0.001<0.05). so it can be concluded that the average rate of return from this investment strategy was different. table 3. descriptive descriptive rate of return n mean std. deviation std. error 95% confidence interval for mean minimum maximum lower bound upper bound value stocks 7 -.66 1.083 .409 -1.66 .34 -2 1 growth stocks 10 1.21 .621 .196 .77 1.65 0 2 garp stocks 3 .45 .450 .260 -.66 1.57 0 1 total 20 .44 1.154 .258 -.10 .98 -2 2 based on table 3, the descriptive analysis results obtained from the spss output, the return on value stocks in the year after the portfolio formation was -66; the rate of return for growth stocks in the year after portfolio formation was 1.21; the return on garp stocks in the year after the portfolio formation was 0.45. so the rate of return in the period of 2015-2019 based on the company's fundamentals, stock selection based on the garp stock category, was higher than both value stocks and growth stocks. table 4. normality test normality tests strategy kolmogorov-smirnov a shapiro-wilk statistic df sig. statistic df sig. rate of return value stocks .223 7 .200 * .876 7 .211 growth stocks .270 10 .037 .906 10 .256 garp stocks .178 3 . .999 3 .951 based on table 4, the spss output analysis shows that the significance values according of the value stock strategy, growth stock strategy, and garp stock strategy were respectively 0.211 (> 0.05), 0.256 (> 0.05), and 0.951 (> 0.05). the analysis results show that those three investment strategies have a significance value of more than 0.05 (> 0.05). it means that the data were normally distributed, and the normality assumption was fulfilled. p. priyanto /journal of accounting and business education, 5 (2), march 2021 17 table 5. homogeneity of variance test homogeneity of variance test levene statistic df1 df2 sig. rate of return based on mean 2.682 2 17 .097 based on median 2.266 2 17 .134 based on median and with adjusted df 2.266 2 14.907 .138 based on trimmed mean 2.621 2 17 .102 from the homogeneity test results based on the spss output results above, it can be concluded that the significance value was greater than 0.05 (0.097> 0.05). thus, it can be concluded that the data variant was homogeneous. table 6. post hoc test rate of return tukey b a,b strategy n subset for alpha = 0.05 1 2 value stocks 7 -.66 garp stocks 3 .45 .45 growth stocks 10 1.21 means of groups in the displayed homogeneous subsets . from the post-hoc test results based on the spss (tukey) output above, it can be concluded that in subset 1, there was a difference in return between the value stocks and garp stocks. it means that the rate of return between the value stocks and garp stock was different, but not significant. in subset 1, there was a difference in return on garp stocks and growth stocks. it means that a difference in return between garp stocks and growth stocks was significantly different. hypothetical test the first hypothesis was whether there was a difference in the portfolio return of value stocks, growth stocks, and garp stocks on the indonesia stock exchange in the period of 2015-2019. the results of above test show that the difference between the return value, growth, and garp categories was significant at 0.05 (p> 0.05). statistically, there was no difference in portfolio returns between all types in indonesia. however, several categories were positive, during the study period for portfolio formation based on p/e, p/b, and p/c in 2015 and 2019. thus, the first hypothesis was received. the second hypothesis was whether or not the garp stocks stable for the growth when compared to the value stocks and growth stocks on the indonesia stock exchange in the period of 2015-2019. the mean difference results show that not all differences in the average return between value stocks, growth stocks, and garp stocks were optimistic. likewise, the results of the above test were significant at 0.05 (p> 0.05). the empirical literature on value investment versus growth investment generally finds the value investment become favorable for a long-term investment strategy. in addition to the higgledy-piggledy phenomenon regarding to the successive earnings growth, many prior studies found that the growth stocks were overpriced and more potentially risky when the investors’ high expectations were not met. the researchers also argued that the actual growth in earnings, sales, and assets were better indications for the stocks’ growth potentials, while the price multiples are considered as the poor measures for firms in the growing industries. although value investment and growth investment were often perceived as the opposite investment styles, it was also argued that these two investment strategies should not be mutually exclusive. the growth-at-a-reasonable price (garp) investment strategy is essentially a disciplined growth p. priyanto /journal of accounting and business education, 5 (2), march 2021 18 investment technique which enables the investors to avoid paying the unreasonable or uncertain prices for future growth. in the previous study conducted by (sumantika, 2016), the researcher found that based on the five tested models, the undervalued stocks produced the highest rate of return if formed based on a combination of pbv with roe, per with the earnings growth, pbv, and book value growth. the undervalued stocks generated high returns at all market capitalization levels, momentum, price, and volume levels, where the highest returns were found in 1) loser stock, 2) small-cap, 3) low price, and 4 ) at high volume. this study was intended to look for stocks which have the potential to grow, yet sold at a fair price. garp itself does not require buying the heavily discounted stocks. finding a bright business which has the potential to grow in a long term and sells at a fair price is the goal of garp. when market conditions get worse, growth stocks are usually ones with the worst price declines. this is even worse if the economic conditions causing the profit growth are not as high as expected. conversely, during a bullish market, the value stock will increase more slowly than the market to increase and lag. garp stocks will move between two types of stocks in the bullish or bearish conditions. the rate of return on the garp stocks has the difference between growth stocks and value stocks. the garp stocks tend to be more stable with the rate of return growth in the long-term investments. thus, garp stocks are highly selective and combine the two stock selection concepts to potentially experience a long-term return growth. this research shows that the garp stocks can be found in sectors forgotten by the market. they may rarely appear on the 'most active stocks' lists, yet a good thing for us in the long run. its stock price will be encouraged to rise in a controlled manner, along with the growth of its profit. in the previous research conducted by (hodnett & hsieh, 2012), the garp selection criteria ensured that the growth stocks in the portfolios were not overpriced as traded at the reasonable p/s ratios. the research results revealed that although the pure growth portfolios outperformed the market proxy on a risk-adjusted basis, their sharpe ratios failed to improve when the portfolios became more concentrated as higher returns for the more concentrated portfolios were achieved at the expense of higher risk. by removing the stocks traded at an above-average p/s multiple, the garp portfolios outperformed their otherwise identical pure growth portfolios on a risk-adjusted basis. the garp selection technique has contributed to the existing investment strategy to improve returns, reduce risk, and enhance the risk-adjusted returns. conclusion based on the results of data analysis and discussion above, it can be concluded that there is a significant difference in the rate of return between value stocks, growth stocks, and garp stocks in the period of 2015-2019. the criteria for selecting the garp stocks ensure that the growth stocks in the portfolio are not expensive as traded at a reasonable p/e ratio. the garp selection techniques contribute to the existing investment strategies to increase returns, reduce risks, and enhance the risk-adjusted returns. the results show that value stock stocks are classified into losers at t-1 and become winners at t + 1. meanwhile, the growth stocks ranked as winners at t-1 become losers at t + 1. however, in a long term (5-year holding period), the researcher has found that there is a garp stock strategy combining the concept of value stocks and growth stocks become more stable growth rate of return of the value stocks and growth stocks. these value stocks generate a higher rate of return, especially when there is a positive change in the company's fundamentals (undervalued value stock). on the other hand, growth stocks will produce the lowest rate of return, especially when investors realize that the actual growth rate is lower than the expected growth rate or, in other words, when problems occur in terms of the company's financial performance. for portfolio selection for garp stocks, there is a significant growth rate of return in the long run. based on the test results, the researcher has found that the undervalued stocks produce the highest rate of return if they are formed based on a combination of pbv and roe, per with earnings growth as well as pbv with book value growth. the undervalued stocks generate high returns at all levels of market p. priyanto /journal of accounting and business education, 5 (2), march 2021 19 capitalization, momentum, price levels, and volumes where the highest returns found in 1) loser stock, 2) small-cap, 3) low price and 4 ) at high volume. based on the outlined conclusions, several suggestions are recommended as follows. short-term investors in the indonesian capital market is recommended to use a strategy by forming a value stock portfolio for investment because the value stock portfolios provide higher returns than growth stock portfolios in 13 years after the portfolio formation. at the same time, the investors who are interested in making investment for a long term can use an investment strategy by combining the value investment and growth investment for the expected rate of return, namely garp investment and garp investors. they think that the profitable growth can only generate if the financial condition is included in the criteria of capital structure. too large debt will have the potential to overthrow the portfolio ships when the wind reverses. furthermore, a high roe is another indicator to use as a guideline to find the garp stocks. the research results reveal the concept of garp appears to be a solution to the weaknesses of both investment camps, known as value investment and growth investment by combining which stocks have more profitable growth, but the valuation value is still reasonable. the implementation of garp concept in managing the investment portfolios, criteria for choosing stocks is considered having more profitable growth first in forming the garp because investors in the stock market tend to expect having high investment returns with a limited time horizon. the implementation of garp concept prevents the investors from the value trap because the garp strategy is a hybrid solution for the growth stocks and value stocks. thus the garp investors will experience a combination of returns. references abdulmannan, a. a., & faturohman, t. 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(2011). manajemen portofolio; penerapannya dalam investasi saham. jakarta: salemba empat. in jakarta: salemba empat. a. dyastiarini., g. irianto., r. roekhudin / journal of accounting and business education, 6 (1), september 2021 49 deliberative csr: alternative csr concept based on liberation theology perspective astri dyastiarini 1 gugus irianto 2 roekhudin 3 1,2,3 accounting department, faculty of economic and business, universitas brawijaya, indonesia email: astridyast@gmail.com doi: http://dx.doi.org/10.26675/jabe.v6i1.14508 abstract: theories underlying the csr concept only takes side of secular world because it is based on materialistic world view which directs csr practice at pragmatic goals. therefore, csr needs conceptual development which is able to balance material and spiritual worlds. the objective of this research is to develop csr concept through elaboration of divine values based on liberation theology. liberation theology presents three main principles, namely, 1) equitable distribution of wealth, 2) managing earth as mandate of creation, and 3) fulfilling basic human rights. the principle is taken as the basis to arrange the deliberative csr concept that is able to promote a civil society. this research employed a qualitative approach with critical paradigm to interpret the phenomena and reconstruct csr concept. the results of this research are: 1) the concept of tazkiah or soul purification in economic case, that is purifying human by spending their wealth in the way of allah; 2) the concept of justice, as the basis to settle poverty issue; 3) natural balance as the basis of utilizing natural resources; 4) social welfare, which is the prophet’s revolutionary mission through liberating human from ignorance, oppression, slavery, and poverty. the implication is that deliberative csr liberates csr from materialism’s capitalistic worldview. deliberative csr makes entity perform csr beyond the obligation; which is as human necessity to actualize their duties as god’s representative on earth as the consequence of devotion to allah swt. article history received: 20 june 2020 revised: 14 november 2020 accepted: 2 february 2021 keywords csr, gri, liberation theology, civil society, deliberative csr introduction corporate social responsibility (csr) has become one of the most orthodox concepts generally accepted in the business world (carrol and sabana, 2010). it is called orthodox since csr implementation is only to comply with legal requirements. in indonesia, csr is mandatory for each limited liability company (lako, 2011) as set forth in law (uu) no. 40 of 2007 . initially, csr is vaguely framed in moral and macro-social term (lee, 2008) and not desired by business players since shareholders cannot see how csr is able to serve their interest and influence company’s performance and management. in the last decade, csr is debated with regard to its influence on company’s financial performance. many academics and theoreticians explain why company performs social responsibility. the stakeholder citation: dyastiarini, a., irianto, g., roekhudin, r.. (2021). deliberative csr: alternative csr concept based on liberation theology perspective. journal of accounting and business education, 6 (1),49-60 journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v6i1.14508 a. dyastiarini., g. irianto., r. roekhudin / journal of accounting and business education, 6 (1), september 2021 50 theory (freeman & david, 1983) emphasizes that a company must manage the interest of various stakeholders as a strategy to maintain a good relationship for the company’ survival. the legitimacy theory (deegan, 2002) shows that csr is performed as company’s strategy to legitimize its existence in the social environment for it to utilize any resources it needs. the social contract theory states that company has a contract with the society that will endanger its survival if the society considers it violating the contract. all of the theories above form csr praxis which only takes side of secular life, since it is based on materialistic worldview. materialistic csr praxis will be directed to pragmatic goals, such as branding, appreciation, or legitimacy. consequently, the current csr concept does not indicate that there is a relationship between world life and the afterlife (triyuwono, 2016). although able to use them.” ford’s business idea as a service to society was not only mocked by the shareholders, but also by the court that granted dodge brothers’ request to acquire the maximum dividend. dodge brothers did not see any rational relationship between csr and profit and most of the shareholders investing in the company did not make any difference in the society but gained substantial profit from investment. csr is evidently able to improve corporate performance, unfortunately, however, csr is not yet able to complete is mission as company’s commitment to social and environmental issues. according to sanders (2012), the failure of whole csr is based on the fact that this field of study deeply is instilled in neoliberal ideology. neoliberalism ensures competition between the bourgeoisie to expand the market, aiming at gaining profit and collect wealth (irianto, 2006). the consequence is moral dislocation and unhealthy conflict among social hierarchy, including exploitation of natural and human resources, even manipulation of the need for goods/services are in demand, desire commodification, class domination, and economic inequality. on the other hand, tauhid worldview does not dichotomize material world and the afterlife. tauhid, which is commonly defined as oneness of god, also means unity of humans (engineer, 1999), and its promotion in secular tradition is an impossibility. each human act, in tauhid world view, is performed as an embodiment of obedience of god almighty. consequently, humans do not only pursue material dimension, but also improve spiritual dimension. therefore, elaboration of csr concept with religious principles will direct csr concept to divine consciousness (gallhofer & haslam, 2004). therefore, religion is expected to influence individual preference regarding csr aspect. some beliefs give significant direction to ethical business practice that is able to promote a civil society as the ideal of all religions. civil society is a social system growing based on faith which upholds the values of virtue. the society built by prophet muhammad p.u.b.h. is a real embodiment of civil society. civil society is one main issue discussed in al-qur’an, indicating the importance of social piety. oppression removal is a requirement for promoting civil society (engineer, 1999), since justice is the main characteristic of civil society . justice is an islamic spirit as a distorted revolutionary ideology in line with the growth-development of power conflict after the prophet’s death. islam loses its vitality as a revolutionary religion which brings justice mission. liberation theology comes to release religion from its establishment. liberation theology is different from traditional (classical) approach which is abstract and ahistorical, and emphasizes on individual piety which ignores social piety. liberation theology suggests an integration of spiritual vision of god’s law, which is based on the scripture, to provide alternative philosophical framework of human relationship with the nature and other creatures (engineer, 1999). majority of researches on csr are encouraged by debates on measuring instrument, disclosure standard, and impact to company. for example, csr’s impact on corporate value (porter & kramer, 2002); (rakotomavo, 2012), financial performance (stuebs & sun, 2015); (karaye et al., 2014); (waworuntu et al., 2014), competitive advantage (lee et al., 2013), and improvement of corporate image and reputation (boubakary & moskolaï, 2016); (smirnova, 2012). only 13.9% study csr concept itself (croker & barnes, 2017). therefore, this research tries to study csr concept critically. the objective of this research is to develop csr concept through elaboration of divine values based on liberation theology, thus it gives ethical guidance directing to the effort to promote civil society. this a. dyastiarini., g. irianto., r. roekhudin / journal of accounting and business education, 6 (1), september 2021 51 research contributes to improving and developing csr concept by balancing material dimension and spiritual dimension; thus piety to creator is the reason of csr implementation. literature review and hypotheses religion: opium of establishment or revolutionary ideology? marx states that religion is opium and nietzsche assumes god has died. religion, according to marx, only makes people only sigh with oppression and is even used to perpetuate establishment. “willingness” and “patience” are understood as a form of acceptance of fate that the creator has determined, while injustice does not descend from the heaven, but is human construct instead. al-qur’an firmly denies superiority and dominance which create oppression. religion is created not to weaken humans, but as a life guidance for each individual to return to him as the goal of life perfection. islam calls itself sirath al-mustaqim (muthahhari, 1993). liberation theology: religious relevance in social context liberation theology comes to relieve religion from its establishment. after the prophet’s death, islam became a religion which was laden with feudalistic praxis and supported establishment (engineer, 1999:4-8). liberation theology is characteristically praxis and is not merely theoretical which is full of obscurity and abstract matters. according to engineer (1999), liberation theology starts with seeing human condition in the world and in the afterlife, anti-establishment, and serves to defend those oppressed and gives ideology to fight oppression. social justice is the obligation of each individual who believes in the existence of god. when a believer tries to enslave others, then he wants to be god, while there is no god but allah. believing in god automatically bears the consequence of promoting justice, since justice is rooted in tauhid. islam commands us to be just since it is close to taqwa (righteousness) and those who are taqwa are close to god. injustice may be destroyed through an organized religion. an organized religion plays an important role in building and spreading ethical guidelines which conform to religious doctrines and proposes practical guidelines on running a business (brammer et al., 2007). religion becomes believers’ guidelines on undergoing their life, including in economic field. csr liberation: elaboration of divine values viewing csr from the framework of liberation theology is an effort to promote holistic csr praxis. csr as a strategy is always directly associated with corporation’s core of business (porter & kramer, 2002). consequently, any forms of csr praxis must be directed to creating value for company. accumulation of profit in the capitalism is intended to collect personal wealth, while islam does not justify it . csr wrapped in capitalism will only take dominant class’s side. therefore, it is important to liberate csr from the body of capitalism for csr praxis to promote collective humanity or civil society. capitalism vs liberation theology capitalism prioritizes competition with the logics “the strong wins” leading to damaged solidarity. differently from islam, capitalism upholds competition to collect wealth in order to be ruling class. ruling class will consider themselves superior, giving them the right to dominate, oppress, and alienate inferior groups. meanwhile, islam and other heavenly religions prioritize brotherhood and humanity with justice spirit. csr in capitalism’s logics is only used as a new strategy to win competition, which is adapted to society’s hope for corporation’s practice which considers sustainability aspect. however, when reviewed more thoroughly, csr is an effort to improve corporate value through positive branding as confirmed with an award. this is as contained in presidential regulation no. 47 of 2012 that company that has played a role in and implemented social and environmental responsibilities may be given with award. meanwhile, in religious teaching, helping or giving assistance is performed by the right hand without the left hand’s awareness. this means that it is performed only for god’s pleasure. in addition, a. dyastiarini., g. irianto., r. roekhudin / journal of accounting and business education, 6 (1), september 2021 52 collecting wealth in islamic teaching is prohibited since it will deepen poverty, while poverty is the worst human nature. this poverty challenge must be responded by building a social structure which is free from exploitation, alienation, and concentration of wealth on a handful of people (engineer, 1999). civil society as the goal of csr practice since the end of 1980s, civil society got more attention and interest with regard to the fall of many socialist regimes previously in the east bloc such as the authoritarian regimes in latin america, asia, and southeast asia (beittinger-lee, 2013). civil society gives dominant role to individual as independent human . csr is corporation’s program as the embodiment of their responsibility for environmental and socio-economic issues caused by their business operation (stohl & stohl, 2010). collective humanity becomes the characteristics of civil society, which is upholding humanity. methods this research employed qualitative approach. qualitative approach is deemed appropriate to achieve the research’s objective, which is csr concept development. qualitative tends to prioritize inductive logical thinking, where classification of problems is obtained from the meeting between research and informant in the field or from the data found (creswell, 2013). this research employed critical paradigm. critical paradigm emphasizes the importance of deconstruction and reconstruction (djamhuri, 2011). this is in line with the research’s objective, which is reconstruction of csr concept. therefore, critical paradigm is the most appropriate worldview to observe, interpret and define related phenomena. the data were analyzed using liberation theology. in the book “islam and liberation theology”, engineer (1999) concentrates his attention on social injustice and inequality developing in the society. engineer aims at releasing religion from limitations constructed by rulers, where religion is taken only ritual worship for individual piety while discrediting social piety. in order to achieve the aim, engineer dialecticizes social phenomena with verses of al-qur’an. the research site chosen was pt. semen tonasa tbk (ptst). ptst was a go public company operating in mining sector, in which mining industry was a business activity with the biggest contribution of environmental damage. ptst won top csr 2017 for sdg category environment impact reduction and its managing director was chosen as the top leader on csr commitment. one year before this award, ptst was protested by surrounding society since it did not implement csr for four years. based on the phenomena, the researcher was interested to study and investigate ptst’s csr practice. the types of data employed in this research were as follows: 1. secondary data the secondary data were in the form of official document divided into internal and external documents. internal document includes annual report, financial reporting, sustainability reporting, and other related documents from internal organization. external document was information from external source of organization, such as through certain media or institution. 2. primary data the primary data were data directly obtained from the source without any intermediary. the primary data the result of interview or observation on object studied. the techniques employed to collect the data were as follows: 1. documentation document has long been used in research as data source, used to test, interpret, and even forecast (moleong, 2013). the data needed in this research were annual report, sustainability report, and other data related to ptst’s csr. the researcher also chose the last three years, which was period of report 2016 which made pt. semen tonasa tbk. win csr award, and years 2015 and 2014 when the society demanded ptst’s social responsibility. 2. observation the observation technique required researcher to be involved in the daily activities of people/group observed (sugiyono, 2009), used as the research’s source of data. through observation, the data obtained a. dyastiarini., g. irianto., r. roekhudin / journal of accounting and business education, 6 (1), september 2021 53 would be complete, in-depth and the research might find to what extent the meaning of each observable behavior. 3. interview interview was the instrument to prove information or certification obtained previously (moleong, 2013). the interview was conducted in an unstructured manner aiming at finding non-standard information and reemphasizing interpretation. the informants taken as the primary source of data were as follows: table 1. research informants no. name status 1. ihm biro csr/pkbl 2. akf partnership program section 3. pe environmental development section 4. an biring ere village 5. mr bpd of biring ere 6. is development partner 7 ib development partner there were some initial steps conducted by the research before arranging the research design. the research’s flowchart may be illustration in the drawing below. figure 1. research flow design results and discussion islam is a revolutionary ideology. its arrival serves as the marker of changes, not only in belief in the creator, but also in social and economic life. islam that does not care about socio-economic issues changes islam’s image from revolutionary to non-contextual . therefore, liberation theology comes to return islam’s commitment to creation of socio-economic justice. according to engineer (1999), liberation theology has the characteristics: first, views human condition in the world and the afterlife; second, it does not desire status quo; third, it struggles those oppressed; fourth, it does not only acknowledge one metaphysical concept of fate, but also acknowledges individual freedom concept. liberation theology’s perspective in company’s social responsibility responsibility is an embodiment of human’s awareness of their obligations on their acts, either or not deliberately . humans assume allah’s mandate, while the heaven, earth and mounts do not will to assume it. as the essence of its creation as khalifah , humans are assigned to be leader on earth, thus they are obliged to fulfil the mandate. the amanah character is not only directed to allah as the highest authority in life, but also to humans. therefore, humans should determine law fairly. a. dyastiarini., g. irianto., r. roekhudin / journal of accounting and business education, 6 (1), september 2021 54 social justice is a strong foundation for ukhuwah islamiyah, which is with even socio-economic distribution . khurshid et al. (2014) state that all society members have the right to be given with basic needs, regardless of race, religion, language, skin, sex, age, health, and status. rice (1999) states that islam provides complete life codes, which direct each phase of human life; spirituality, economic justice, and social justice, including business affairs. the exploitative capitalism system causes unjust socio-economic structure, that there is no political justice, social justice, and economic justice. the form of exploitation in capitalist system is not compatible with islam’s justice doctrine. that is why modern capitalist society cannot cooperate with islam’s worldview (engineer, 1999). there is no absolute ownership in islam, which is quite different from capitalism, which glorifies personal ownership. al-qur’an and hadith clearly state that in fighting poverty, ownership is not absolute but must be shared justly to those in need (engineer, 1999). unfortunately, distributive justice is narrowed down to shadaqoh. it is correct that islam suggests charity to eradicate poverty, but shadaqoh is not the only best way. engineer (1999) explains the importance for social institution to manage wealth to prevent curses and reproaches . human’s ownership of wealth is directed to the shared welfare (engineer, 1999). csr attempts to improve corporate image by present it as humane and socially responsible business player, but may also be deemed as a mask to pursue limitless benefit and power (khurshid, et al., 2013). the stigma cannot be separated from capitalistic business paradigm. according to (dusuki, 2008), csr in the west pays more attention to materialistic instead of ethic matter, since it is based on secular western theories. in comparison to western theories, islam assumes a relatively holistic approach to csr concept. islamic basic values, such as aqidah (faith and belief), ibadah (act of filial piety to allah), and akhlaq (morality and ethics), will not change even if the time changes. these islamic basic values are promoted in syari’ah which is the islamic basic worldview. muslims are bound by this law as the consequence of tauhid (belief/faith in allah). csr concept in islam covers a wider implication including the dimension of taqwa (believing in allah) which considers business as a group of individuals playing a role in and responsible for services and representative (khalifah) in any situation. islam as the liberation theology with the spirit of anti-status quo requires three basic concepts (engineer, 1999) to promote a just society order, namely: 1) equitable distribution of wealth; 2) managing earth as mandate of creation; and 3) fulfilling basic human rights. just society order is the characteristics of civil society. the firs principle is taken as the basis in the economic aspect of csr concept, namely: 1) the concept of tazkia, and 2) the concept of justice. the second principle as taken as the basis in environmental aspect, namely: the balance of nature. the third principle is taken as the basis in social aspect, namely: social welfare. the concept of social responsibility in indonesia is set forth in no. 40 of 2007 and elaborated in the technical regulation as in figure 2. csr concept in islam covers a wider implication including the dimension of taqwa (believing in allah), thus business entity must also account for all of their acts to allah as the owner of earth along with anything therein. csr concept in islam will bring the spirit of liberation which is anti-status quo, thus csr is understood as jihad to destroy oppressing socio-economic structure. without jihad, one’s faith is not perfect. therefore, csr concept elaborated from islamic principles attempts to promote a society order which raises human level essentially and promote civil society. csr concept which is grounded on materialistic worldview will direct csr practice which only takes side of life. secular csr does not indicate relationship between worldly life and the afterlife. this contradicts islamic worldview. islam reminds humans not to be occupied by worldly affairs and ignore afterlife affairs. meanwhile, the csr concept in the perspective of liberation theology may be viewed in the figure 3. a. dyastiarini., g. irianto., r. roekhudin / journal of accounting and business education, 6 (1), september 2021 55 figure 2. the concept of social responsibility in indonesia figure 3. csr concept in liberation theology’s perspective a. dyastiarini., g. irianto., r. roekhudin / journal of accounting and business education, 6 (1), september 2021 56 the concept of tazkia islamic ethical system is different from secular ethical system. secular ethical system is formed from man-made theories (hassan, 2016), thus it only considers worldly life. islamic ethical system is sourced from al-qur’an and hadith, emphasizing relationship between human and the creator. therefore, the concept of development in islam also pays attention to spirituality aspect as revealed by (gambling & karim, 1986). “the concept of tazkia, or growth and purification, is the idea of active contribution in the material world. this concept entails that muslims are required to participate in worldly activities with the provision that any material development and growth should also guarantee social justice and spiritual improvement. one of the key features of the islamic ethical system is that it provides no separation between an individual’s public and private lives (in the eyes of god).” tazkia is active contributive idea in material world requiring muslims to actively take part in worldly activities provided that each material development and growth must ensure social justice and spiritual improvement. the meaning of tazkia by term is self-purification from any disease, realizing various maqam on it and making asma and shifat as the character (al-ghazali, 1996). this soul purification will cleanse human from any manners which do not conform to their nature. according to (triyuwono, 2016), management which only focuses on achieving profit will stimulate over-egoistic behavior and keep organization away from ethical and human values. human’s distance from ethical values will erode their human nature. therefore, humans are commanded to cleanse themselves and return to their nature as khalifah. “but the righteous will be spared from it–who donate ˹some of˺ their wealth only to purify themselves, not in return for someone’s favors, but seeking the pleasure of their lord, the most high.” (qs. al-layl [92]:17-20). allah promises those donating their wealth only for seeking his pleasure will be kept away from the hell. the concept of tazkia in this case is to cleanse human soul and each of their acts by balancing worldly and heavenly affairs, that is to spend their wealth in the way of allah. islam does not separate individual’s personality from personal life. the concept of justice: taqassata justice is society’s highest measure (engineer, 1999). justice in islam is rooted from tauhid; thus the real meaning of taqwa is not only to perform ritual worship. each faithful individual is commanded to act justly because god almighty loves those who act justly . poverty must be responded by building social structure which is free from exploitation, oppression, and collection of wealth by a handful of people or group. allah swt says: “give good news of a painful torment to those who hoard gold and silver and do not spend it in allah’s cause. the day ˹will come˺ when their treasure will be heated up in the fire of hell, and their foreheads, sides, and backs branded with it. ˹it will be said to them,˺ “this is the treasure you hoarded for yourselves. now taste what you hoarded!”” (qs. at-tawbah [9]:34-35). the verse above depicts god’s punishment for those who hoard wealth. this is different from capitalist concept of adoring wealth. allah makes laws as the consequence of how humans are in multistage in sustenance; such as livelihood, zakat, and kafarat . on the laws, allah reminds humans of his dearly sanction. “whenever we intend to destroy a society, we command its elite ˹to obey allah˺ but they act rebelliously in it. so the decree ˹of punishment˺ is justified, and we destroy it utterly.” (qs. al-isra’ [17]:16). it is clear that rich men (that is those with over-sustenance) do not care the weak and those oppressed, thus all social structure will be chaotic and destroyed by revolution (engineer, 1999:54). there are many evidences the creator has given of his laws; such as the story of prophet nuh, the story of prophet luth, the story of prophet sulaiman, tsunami in aceh, and earthquake in padang. a. dyastiarini., g. irianto., r. roekhudin / journal of accounting and business education, 6 (1), september 2021 57 the balance of nature the cartesian-newtonian paradigm considers the nature inferior and the object of be controlled by human. although human is created as venerated being, islam does not make human dominate other creations. tauhid worldview positions human as khalifah, carrying the mandate that the heaven, earth and mounts are unable to assume. created as khalifah, human is required to keep the earth from destruction because of previous humans’ greed. allah says: “˹remember˺ when your lord said to the angels, “i am going to place a successive ˹human˺ authority on earth.” they asked ˹allah˺, “will you place in it someone who will spread corruption there and shed blood while we glorify your praises and proclaim your holiness?” allah responded, “i know what you do not know.”” (qs. al-baqarah [2]:30) earth is not created without any wisdom, but with correct goals. therefore, god prohibits human from destroying the earth, as allah says below: “do not spread corruption in the land after it has been set in order. and call upon him with hope and fear. indeed, allah’s mercy is always close to the good-doers.” (qs. al-a’raf [7]:56). destruction on earth means spreading disobedience, hostility, and injustice on earth. islam considers business to have socially useful function. business, as human association, is required to get involved in sustainable development activity (hassan, 2016), thus it can reduce environmental impact and help provide, protect, and preserve the environment to inhabit. social welfare social welfare is one of the main subjects of islamic teaching. this can be observed from the prophet’s life story. he was born in mecca in an illiterate society . the time before islam came was called the era of ignorance. the society’s social view at that time was narrow and they rejected any view other than their ancestral tradition. at 40 years old, the prophet liberated mecca and all mankind (engineer, 1999). the prophet liberated them from suffering, superstition, oppression, slavery, and injustice. he also liberated those oppressed, the poor, and those ignorant (engineer, 1999). all of it was not only performed through being teacher and philosopher, but also activists who were involved in the field in the society’s economic activities. the revolution performed by the prophet is allah’s command. allah says the importance of scientific knowledge, which is likened to be nur (light). allah also removes superstition and tribal perspective, and gives equal right to women. all of this changed the arabs and is the most evolutionary concept for all mankind. conclusion ptst is a state-owned company operating in limestone mining. this requires ptst to perform tjsl (the consequence of business activities which is in direct contact with natural resources exploitation) and pkbl (the consequence as state-owned company). in its implementation, ptst had performed its obligation in implementing the two forms of csr, but not maximally. the reason is that the csr program implemented was not followed-up, thus it is not surprising that the program did not significantly affect the improvement of society’s welfare and it was as if only to meet the responsibility mandated by the existing regulation. however, ptst claimed that they were aware that csr was their necessity to actualize caliphate duties. besides obligation (mandated by regulation), on the other hand, it is also deemed as company’s need. ptst is aware that their existence in the society should give positive impact on the society. ptst acknowledges that the best human is one who is useful to his surrounding people. this acknowledgement shows that ptst is aware that it is part of the society. ptst also acknowledges that human is god’s representative on earth, but in the implementation ptst has not proven it to be correct. the duality (as obligation and as necessity) in csr implementation causes doubt in settling social and environmental issue at society level. ptst considers that the government should take a bigger part in settling the issues. finally, ptst does not allocate its profit (max 4%) in the current year for csr budget a. dyastiarini., g. irianto., r. roekhudin / journal of accounting and business education, 6 (1), september 2021 58 although company’s financial position is profit. ptst states that it does not violate the regulation since it has allocated a fund for csr program which is from administrative cost and loan interest of partnership program. implementing csr for regulatory obligation does not indicate business player’s awareness to participate in improving society’s welfare, eradicating poverty, and inequality, leading to moral dislocation. not allocating corporate profit to social and environmental responsibility program shows that there is no income distribution by ptst to deal with the impacts of its corporate business acts and decisions. meanwhile, islam commands each muslim to spend their property in the way of allah, which is the excess of their needs. deliberative csr does not only pay attention to worldly aspect, but presents worldly and heavenly relationship, like islamic worldview. the result of elaboration of csr concept with islam as the liberation ideology is as follows: first, the concept of tazkia. second, the concept of justice. third, the balance of nature. fourth, social welfare. deliberative csr liberates csr from materialism’s capitalistic worldview; that is implementing csr as (regulatory) obligation, image, and obtaining certain award. deliberative csr makes entity perform csr not limited to obligation, but beyond obligation; that is as human’s need to actualize their duties as god’s representative on earth as the consequence of devotion to allah swt. business which is only oriented to profit causes unethical behavior by justifying and performing any way for profit. this has caused problem; social problem and environmental problem, thus the international society demands business’s responsibility for current socio-economic condition. the existence of csr as company’s commitment to get involved in improving the quality of useful society and environmental life is the society’s new 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(2010). measuring corporate social performance: a review. international journal of management reviews, 12 (1) pp. 50-84. f. o. perwita, i. harymawan/journal of accounting and business education, 5 (2), march 2021 31 related-party transactions and audit fees fortuna oktavia perwita 1 iman harymawan 2 1,2 department of accountancy, faculty of economics and business, universitas airlangga, indonesia email: harymawan.iman@feb.unair.ac.id doi: http://dx.doi.org/10.26675/jabe.v5i2.15984 abstract: this research aims to analyze the association between the related-party transactions and audit fees. this study used 781 observations listed on the indonesia stock exchange from 2010 to 2017. the analysis technique used in this research was the ordinary least square regression analysis model processed with stata 14.0 software. this study found that related-party transactions are positively and significantly related to audit fees. the result indicated that the related-party transactions increase audit fees paid by companies. it also investigated the moderating effect of industry specialty auditors. this indicated that auditor specialization strengthened the relationship between the related-party transactions and audit fees. the market share proxy was used to measure industry specialization. however, this proxy still has disadvantages as it can generate different market shares. this study found that related-party transactions increased audit fees. the results of this study can be used as consideration in making decisions for related parties. article history received: 8 september 2020 revised: 31 oktober 2020 accepted: 7 november 2020 keywords related-party transactions, audit fees, auditor specialization citation: perwita, f, o., & harymawan, i. (2021). related-party transactions and audit fees. journal of accounting and business education, 5(2),31-42 introduction the existence of related-party transactions related to fraud scandals in accounting practices recently raised concerns about current auditing practices (gordon et al., 2007). the related-party transactions need a major concern. in the case of enron and adelphia, transactions with related parties might be for fraudulent purposes rather than for business purposes and were not adequately disclosed in the financial statements (gordon et al., 2007). related-party transactions are transactions between companies and individuals or organizations related to the companies, such as managers, directors, major shareholders, and affiliates (al-dhamari et al., 2018; bona-sánchez, et al. 2017; gordon et al., 2007). there are various types of related-party transactions, including purchases, sales, loans, or providing loans to parties related to the company (bryan & mason, 2017; gallery et al., 2008). since 2007, research on the related-party transactions has increased due to accounting irregularities. research and practice show that the auditing of related-party transactions is problematic. for example, the american institute of certified public accountants (aicpa) admits that related-party transactions are difficult to audit. this is journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ mailto:harymawan.iman@feb.unair.ac.id http://dx.doi.org/10.26675/jabe.v5i2.15984 f. o. perwita, i. harymawan/journal of accounting and business education, 5 (2), march 2021 32 supported by empirical evidence stating that related-party transactions are one of the top ten audit deficiencies often identified in the securities and exchange commission (sec) law enforcement commission (beasley et al., 2000). the related-party transactions are complex since they involve several parties and operations (kohlbeck & mayhew, 2017). the factors that determine the amount of payment for the audit services provided are the size, complexity, and level of risk of the client's business (chen et al., 2017; hong & hwang, 2018; mcmeeking et al., 2006; salehi et al., 2018; waresul karim & moizer, 1996). the emergence of international standard auditing (isa) 550 regarding related parties shows that all related parties have a significant risk to the company's financial reporting so it is also risky if the auditor audits companies that conduct related-party transactions. the risk faced by the auditor is the possibility of an error in providing an opinion on the audit of the financial statements of companies that conduct related-party transactions to manipulate financial statements (el-helaly, 2018). several studies regarding related-party transactions were conducted because they were considered to influence the determination of audit fees. al-dhamari et al., (2018) show that companies that conduct related-party transactions have higher audit fees compared to companies whose related-party transactions are few or even nonexistent. however, the results of research conducted by kohlbeck dan mayhew (2017) said that related-party transactions affect the level of financial report restatement, and audit fees at the company are lower. in indonesia, to ensure that an entity's financial statements contain the necessary disclosures to bring attention to the possibility that the financial position and profit and loss have been affected by the existence of related parties, the financial accounting standards board (dsak) issued a statement of financial accounting standards (psak) 7 which regulates regarding related-party disclosure. the emergence of psak 7 provides a signal that related-party transactions may pose a risk to the presentation of financial statements. research conducted by simunic (1980) shows that the things that affect the amount of the audit fees are the size of the client company, audit complexity, and audit risk. therefore, the increase in audit risk is also in line with the increase in fees for audit services. jiang dan son (2015) argued that the auditor may respond to increased client risk by charging a premium as insurance against potential litigation and as an excess effort by the auditor in conducting the audit. if the auditor considers that related-party transactions are risky as it will affect the determination of the audit fees because the auditor needs more audit effort to ensure that such related-party transactions will not mislead users of financial statements. habib dan bhuiyan (2011) said one of the dimensions of audit quality that differentiates high-quality auditors from their lower-quality peers is the degree of specialization of the audit firm's industry. much research has been done on the relationship between industry specialty auditors and audit fees, but no one has yet researched the effects of industry specialty auditor moderation on the relationship between related-party transactions and audit fees. so, this relationship needs to be studied more deeply. researchers suspect that related-party transactions will positively affect audit costs and the relationship between the two is strengthened if the auditors conducting the audit are auditors with industry specialties. the industry specialty audit is an industry-specific knowledge that auditing firms use to help auditors better understand what clients are doing in a particular industry and the risks they face (fleming et al., 2014; kend, 2008). in addition to discussing the relationship between related-party transactions and audit fees, this study will also discuss the relationship between auditors and industry specialties that carry out audits of the financial statements of companies conducting the related-party transactions and their impact on audit costs. research related to the related-party transactions is an interesting matter to be studied in more depth because related-party transactions pose a significant risk to the company's financial reporting. after all, the nature of the transactions is difficult to identify. this causes the audit risk on the relatedparty transactions to increase and will affect the amount of audit fees to be paid to the auditors. industry specialty auditor is expected to strengthen the relationship between the two variables because auditors with industry specialization have more adequate knowledge of a particular company industry so that they will better understand the nature of the company's transactions. the ability of f. o. perwita, i. harymawan/journal of accounting and business education, 5 (2), march 2021 33 auditors to identify the things mentioned above will increase the amount of audit fees so that companies that carry out related-party transactions whose financial statements are audited by auditors with industry specializations will have a higher audit fee. so it is assumed that related-party transactions affect the amount of audit fees paid by the company and if the company is audited by auditors with industry specialties, the relationship between the two will be stronger. this research can contribute to the literature related to related-party transactions which can then be used for the development of further studies in accounting. first, this study provides an understanding of why related-party transactions affect the amount of audit fees. second, this study provides an understanding that those companies that are audited by industry specialization auditors will pay higher audit fees. also, the results of this study are expected to be useful as a consideration in making decisions regarding the related-party transactions. literature review and hypotheses related-party transactions and audit fees according to ryngaert dan thomas (2012), a related-party transaction is an efficient contract mechanism when there is incomplete information. a related-party transaction can be used as a tool to transfer resources to related parties (aharony et al., 2010; johnson et al., 2005). according to gordon et al., (2007), there are several reasons why it is difficult to audit related-party transactions, besides it is difficult to identify related-party transactions, the auditor also relies heavily on information provided about related parties and related-party transactions. psak 7 states that disclosures related to related parties are necessary for presenting financial statements because the statements of financial position and profit and loss, as well as transactions and balances, are affected by the existence and commitment of related parties or so-called related parties. according to psak 7, a related party is a person or entity that is related to a certain entity in preparing its financial statements. psak 7 regulates what matters need to be disclosed in the financial statements, for example, in the entity's relationship with related parties, compensation given to key management, and related-party transactions. indonesia has also regulated the amount of audit fees that must be paid to public accountants with the consideration that an audit fee for auditing financial statements that is too low can pose a threat in the form of personal interests which has the potential to cause non-compliance with the professional code of ethics of the public accountant. therefore, the indonesian institute of public accountants (iapi) issued pp no. 2 of 2016 concerning the determination of fees for financial statement audit services. iapi also regulates the indicator for the lower limit of audit service billing rates. this is done so that in conducting audits, auditors remain obedient to the code of ethics of the public accountants and applicable regulations. the determination of the lower limit in determining the service fee is expected so that the entire service fee is adequate for the auditor to perform audit procedures. the amount of the audit fee (fee for services) is the result of calculating the number of hours worked multiplied by the value of the hourly audit fee. in pp no. 2 of 2016, iapi requires auditors to calculate the amount of time required for each stage of the audit which consists of risk assessment, risk response, and reporting. this is done so that the auditor can calculate the service fees that must be paid by the company for financial statement audit services. things that affect the amount of the audit fees are the size of the client company, the complexity of the audit, and the audit risk (simunic, 1980). audit risk consists of three, namely inherent risk, control risk, and detection risk. the research conducted by jiang dan son (2015) shows the results that the auditor responds to the presence of control risk, the auditor will charge a fee that is higher than the cost of carrying out the audit. the related-party transactions are very important for the auditor because there will always be risks that are judged to be different if the transactions are made with third parties (al-dhamari et al., 2018). one of the risks of related-party transactions is a decrease in the level of independence between parties, thus violating the arm's length principle. f. o. perwita, i. harymawan/journal of accounting and business education, 5 (2), march 2021 34 there is a significant and positive effect of related-party transactions on audit fees (al-dhamari et al., 2018). this is because the auditor considers that related-party transactions increase audit risk. if the auditor assesses that there is a potential risk, the auditor will charge a higher fee as compensation for the risk and effort that must be made to describe the transaction and provide assurance that related-party transaction does not provide misleading value. h1: there is a positive relationship between the related-party transactions and audit fees. industry specialty auditor and audit fees in companies conducting related-party transactions having in-depth knowledge of an industry means understanding the economy of the industry, key accounting policy issues, specific industry issues, and its business practices. (kend, 2008; nagy, 2014). understanding the client industry increases the professional auditor's skepticism about the appropriate recognition and judgment of transactions and events related to the industry (scott & gist, 2013; solomon et al., 1999). a deep understanding of a particular industry will increase the effectiveness and efficiency in conducting audits. a specialist's knowledge of an industry is built up through extensive audit experience, specialized staff training, and expensive investment in information technology (deboskey & jiang, 2012). the results of research conducted by fuentes dan sierra (2015) shows that industry-specialized auditors influence determining the amount of audit fees. the auditor's industry specialization is one of the attributes of audit quality because it increases the likelihood of identifying material misstatements in financial statements (fuentes & sierra, 2015). in this study, industry-specialized auditors are used to seeing whether industry-specialized auditors will influence the audit fees for companies that transact with related parties. if companies that carry out many transactions with related parties are audited by auditors with industry specialties, it will improve the quality of the financial statements because auditors with industry specializations are considered capable of detecting errors, both errors and intentional errors. bae et al. (2016) said that the amount of audit fees associated with industry specialty auditors is a reflection of the number of audit services provided by auditors or the result of hourly costs of industry specialty auditors, or perhaps the result of both. auditors with industry specialties have in-depth knowledge of industry. therefore, they will pay more attention to transactions and events in the company, especially if these transactions or events present the risk of material misstatement in the financial statements. however, in indonesia, there are no detailed regulations that discuss the specialty of the auditor industry and have not determined the lowest level of auditors to understand the client industry before accepting an offer to audit the company's financial statements. h2: audit fees will increase for companies conducting related-party transactions when their financial statements are audited by industry specialty auditors. methods the approach used in this research is quantitative. this research is conducted to determine the relationship between two variables so that this research is included in the associative research group. this study examines the effect of the related-party transactions and industry specialty auditors on audit fees. all data is secondary data from osiris and data related to auditors comes from the idx. the population used in this study was all companies registered in the idx for 2010-2017 period, consisting of 3,038 companies. the sample selection of this study used a purposive sampling approach with predetermined criteria. these criteria are (1) non-financial companies listed on the idx in the 20102017 period and (2) companies whose annual reports and audited financial reports contain the data required for this research. the researcher removes all populations that do not have the required data. researchers only use data from non-financial companies, so researchers delete companies with sic code 6. the number of observations in this study is 781 companies. f. o. perwita, i. harymawan/journal of accounting and business education, 5 (2), march 2021 35 the measurement of related-party transactions uses the measurement used by habib et al., (2015). the related-party transactions are the result of the natural logarithm of all related-party transactions. besides, researchers measured industry specialty auditors using proxies that already existed in previous studies. industry specialty auditors are measured by the audit company market share which is calculated from the total assets of the company being audited by the auditor (rusmin and evans, 2017). then the dummy variable of industry specialty auditors is determined, which is given a value of 1 if the auditor's market share is the highest and the value of 0 is vice versa. this variable will be interacted with the related-party transactions variable to see whether being audited by a specialist auditor will affect the audit costs. audit costs are measured by the natural logarithm of the audit fees paid to the auditor. researchers also use control variables taken from several previous studies regarding audit costs. there are two regression models in this study. model 1 is used to test hypothesis 1, while model 2 is used to test hypothesis 2. the regression models used are as follows: model 1: model 2: where audit fee is the natural logarithm of the audit fee. lnrpt is the natural logarithm of all related party transactions. the specialist is a dummy variable where 1 is industry specialty auditors and 0 is the opposite. big4 is a dummy variable where 1 is the auditor included in big4 while 0 is the opposite. auditor change is a dummy variable where 1 is for companies whose auditors are different from the previous year and 0 is the opposite. the comsize is the number of commissioners in a company. firmage is the company's age since its establishment until 2017. the clientsize is the natural logarithm of total assets. cash is the natural logarithm of cash. leverage is total debt divided by total assets. liquidity is short-term debt divided by current assets. results and discussion descriptive statistics before doing descriptive statistics, winsorize data was conducted first. the winsorize is done to overcome data containing outliers by pulling the lowest outliers data to the 1% level and pulling the highest outliers data to the 99% level. table 1 shows the results that the average audit fee value is 1,913,000,000 and has a median value of 790,000,000. the maximum value of the audit fee is 36,000,000,000, while the minimum value is 80,000,000. related-party transactions (lnrpt) have an average value of related-party transactions of 540,500,000,000 and a median value of 67,820,000,000. the maximum value of this variable is 9,942,000,000 where the transaction is carried out by pt waskita karya and the minimum value of this variable is 0. as additional information, table 2 contains the percentage of companies that disclose audit fees in their financial statements based on industry information regarding the type of industry based on sic. manufacturing and service industries are divided into 2 based on their main characteristics. manufacturing (1) is a company that is included in sic 2 and manufacturing (2) is included in sic 3. a company with sic 7 is included in services (1) and sic 8 into services (2). based on table 2, the companies that disclosed the most audit fees were companies engaged in the agriculture, forestry, and fisheries industries, which amounted to 39.8%, while the companies that disclosed the least audit fees were companies engaged in the service industry, namely 13.8%. f. o. perwita, i. harymawan/journal of accounting and business education, 5 (2), march 2021 36 table 1. descriptive statistics results mean median minimum maximum auditfee 1,913,000,000,000 790,000,000,000 80,000,000,000 36,000,000,000,000 rpt 540,500,000,000,000 67,820,000,000,000 0.000 9,942,000,000,000,000 comsize 4.589 4.000 2.000 10.000 firmage 35.515 34.000 5.000 116.000 clientsize 10,570,000,000,000 3,736,000,000,000 157,800,000,000 111,400,000,000,000 cash 0.761 0.028 0.000 123.288 leverage 1.323 0.871 -2.168 8.331 liquidity 2.080 1.495 0.118 11.421 mtbv 2.204 1.262 -1.199 18.726 source: stata processing result, 2019 table 2. percentage of companies disclosing audit fees sic industry disclose the audit fees percentage not disclosing audit fees percentage companies in total 0 agriculture, forestry and fisheries 45 39.8% 68 60.2% 113 1 mining and construction 200 41.9% 277 58.1% 477 2 manufacturing (1) 262 34.1% 506 65.9% 768 3 manufacturing (2) 166 30.3% 381 69.7% 547 4 transportation and public utilities 170 34.6% 322 65.4% 492 5 wholesale and retail trade 71 23.1% 237 76.9% 308 7 services (1) 46 17.2% 222 82.8% 268 8 services (2) 9 13.8% 56 86.2% 65 source: stata processing result, 2019 note: manufacturing and service industries are divided into two based on their main characteristics according to the standard industrial classification (sic) pearson correlation based on the results of the pearson correlation test in table 3, it can be seen that the related-party transactions have a positive relationship with a significance level of 1% on the audit fee. this means that the related-party transaction in a company become the auditor's consideration in determining the amount of the audit fee. also, auditors for industry specialization show a positive relationship direction with a significance level of 1% with audit fees. this suggests that auditors with industry specialization charge a higher audit fees. table 3. pearson correlation audit fees lnrpt specia list big4 auditor change comsize audit fees 1.000 lnrpt 0.292 *** 1.000 (0.000) specialist 0.358 *** 0.109 *** 1.000 (0.000) (0.002) big4 0.530 *** 0.190 *** 0.476 *** 1.000 (0.000) (0.000) (0.000) auditor change -0.126 *** -0.186 *** -0.139 *** -0.220 *** 1.000 f. o. perwita, i. harymawan/journal of accounting and business education, 5 (2), march 2021 37 (0.000) (0.000) (0.000) (0.000) comsize 0.488 *** 0.243 *** 0.158 *** 0.360 *** -0.090 ** 1.000 (0.000) (0.000) (0.000) (0.000) (0.012) firmage 0.050 0.074 ** -0.057 0.015 0.011 0.276 *** (0.163) (0.039) (0.108) (0.676) (0.761) (0.000) client size 0.694 *** 0.304 *** 0.264 *** 0.372 *** -0.098 *** 0.541 *** (0.000) (0.000) (0.000) (0.000) (0.006) (0.000) cash -0.119 *** -0.106 *** -0.013 -0.057 -0.033 -0.096 *** (0.001) (0.003) (0.712) (0.110) (0.354) (0.007) leverage -0.035 0.061 * -0.017 -0.106 *** 0.000 -0.054 (0.334) (0.087) (0.642) (0.003) (1.000) (0.132) liquidity -0.161 *** -0.101 *** -0.011 -0.007 0.013 -0.002 (0.000) (0.005) (0.767) (0.844) (0.720) (0.954) mtbv 0.127 *** 0.020 0.150 *** 0.083 ** -0.021 -0.007 (0.000) (0.586) (0.000) (0.020) (0.550) (0.845) firmage clientsize cash leverage liquidity mtbv firmage 1.000 clientsize 0.072 ** 1.000 (0.044) cash -0.039 -0.160 *** 1.000 (0.273) (0.000) leverage -0.047 0.082 ** -0.057 1.000 (0.190) (0.022) (0.111) liquidity 0.016 -0.169 *** 0.093 *** -0.358 *** 1.000 (0.663) (0.000) (0.010) (0.000) mtbv -0.023 0.054 -0.023 0.127 *** 0.040 1.000 (0.514) (0.130) (0.529) (0.000) (0.262) p-values in parentheses * p < 0.1, ** p < 0.05, *** p < 0.01 source: stata processing result, 2019 independent t-test table 4 shows the results that auditors charge higher audit fees to companies conducting the relatedparty transactions. besides, the results also show that specialized auditors charge higher audit fees to companies conducting a related-party transaction. table 4. independent t-test result rpt with related-party transaction without related-party transaction coef t-value auditfee 20.591 19.799 0.792 *** 5.373 specialist 0.238 0.104 0.134 ** 2.505 big4 0.521 0.254 0.267 *** 4.226 auditorchange 0.104 0.343 -0.240 *** -5.801 comsize 4.681 3.612 1.069 *** 4.762 firmage 35.739 33.119 2.620 1.064 clientsize 22.154 21.388 0.766 *** 4.230 cash 0.637 2.088 -1.452 ** -2.222 leverage 1.340 1.149 0.191 1.007 liquidity 2.041 2.493 -0.452 * -1.885 f. o. perwita, i. harymawan/journal of accounting and business education, 5 (2), march 2021 38 mtbv 2.205 2.192 0.012 0.033 source: stata processing result, 2019 multiple linear regressions table 5. multiple linear regressions result: related-party transaction and audit fee audit fees (1) (2) lnrpt 0.009 ** 0.009 *** (2.52) (2.76) specialist 0.195 ** 0.195 ** (2.50) (2.23) big4 0.583 *** 0.583 *** (8.48) (7.32) auditor change 0.054 0.054 (0.62) (0.58) comsize 0.078 *** 0.078 *** (3.94) (3.92) firmage -0.001 -0.001 (-0.79) (-0.83) clientsize 0.402 *** 0.402 *** (15.78) (14.17) cash 0.000 0.000 (0.02) (0.04) leverage -0.074 *** -0.074 *** (-3.68) (-3.74) liquidity -0.066 *** -0.066 *** (-4.17) (-4.53) mtbv 0.033 *** 0.033 ** (3.38) (2.42) constant 11.220 *** 11.220 *** (19.74) (18.13) industry dummy included included year dummy included included r2 0.606 0.606 r2_a 0.593 0.593 n 781 781 t statistics in parentheses * p < 0.1, ** p < 0.05, *** p < 0.01 source: stata processing result, 2019 regression in this study was carried out twice, the first is multiple linear regressions by controlling the fixed-year effect and the industry-year effect, while the second is performing multiple linear regression with robust. as presented in table 5, in the first column multiple linear regressions is carried out for model 1 and produces an lnrpt coefficient of 0.009 and a t-value of 2.52 with a significance level of 0.05. this means that for every 1 point increase in lnrpt, the audit fee will increase by 0.009. in the second column, multiple linear regressions is performed robustly and produces an lnrpt coefficient of 0.009 and a t-value of 2.76 with a significance level of 0.01. this means that for every 1 point increase in lnrpt, the audit fee will increase by 0.009. both regression results indicate that the related-party transactions positively affect the amount of audit fees charged by auditors. so it can be concluded that hypothesis 1 is accepted. f. o. perwita, i. harymawan/journal of accounting and business education, 5 (2), march 2021 39 table 6. multiple linear regressions result: related-party transactions, industry specialty auditor and audit fees audit fees (1) (2) rpt*specialist 0.021 ** 0.021 ** (2.01) (2.34) lnrpt 0.007 0.007 * (1.65) (1.77) specialist -0.305 -0.305 (-1.17) (-1.46) big4 0.596 *** 0.596 *** (8.65) (7.59) auditorchange 0.051 0.051 (0.60) (0.56) comsize 0.076 *** 0.076 *** (3.89) (3.90) firmage -0.001 -0.001 (-0.92) (-0.95) clientsize 0.401 *** 0.401 *** (15.77) (14.19) cash -0.000 -0.000 (-0.06) (-0.10) leverage -0.069 *** -0.069 *** (-3.41) (-3.50) liquidity -0.066 *** -0.066 *** (-4.18) (-4.58) mtbv 0.032 *** 0.032 ** (3.32) (2.36) _cons 11.312 *** 11.312 *** (19.87) (18.36) industry dummy included included year dummy included included r2 0.608 0.608 r2_a 0.594 0.594 n 781 781 t statistics in parentheses * p < 0.1, ** p < 0.05, *** p < 0.01 source: stata processing result, 2019 the researcher also conducted tests to determine how the relationship between auditors and industry specialties that perform company audits with transactions related to the amount of audit fees. this test is performed with multiple linear regressions twice. the first is multiple linear regressions by controlling the fixed-year effect and industry-year effect, and the second by performing multiple linear regression robustly. table 6 in the first and second columns shows that lnrpt * specialist, which is an interaction between industry specialty auditors auditing companies with related transactions, produces a positive coefficient of 0.021 with a t-value of 2.01 and a significance level of 1%. this means that auditors with industry specializations will charge a higher audit fee on companies that carry out the related-party transactions. so it can be concluded that hypothesis 2 is accepted. related-party against audit fees based on the results of research using pearson correlation and multiple linear regressions, it shows that the related-party transactions have a positive and significant relationship to audit fees. this means that companies that conduct the related-party transactions tend to pay a larger audit fee to external auditors. this is following the hypothesis that has been proposed, so that hypothesis 1 is accepted. the related-party f. o. perwita, i. harymawan/journal of accounting and business education, 5 (2), march 2021 40 transactions are an efficient contract mechanism when there is incomplete information (ryngaert & thomas, 2012). according to gordon et al., (2007), there are several reasons why it is difficult to audit the related-party transactions, including the difficulty to identify the related-party transactions. besides, the auditor relies heavily on information provided about related parties and the related-party transactions. the results of this study are in line with research conducted by al-dhamari et al., (2018) in malaysia. the study says that sales and purchase transactions with related parties place the auditor in a situation where the audit risk is very significant so that the audit fee will be paid higher to the external auditor as compensation for the risk and effort incurred by the auditor. the increase in audit fees in this study is also in line with research conducted by jiang and son (2015) which shows the results that the auditor responds to the presence of control risk, the auditor will charge a fee that is higher than the cost in carrying out the audit itself. industry specialty auditor and audit fees in companies conducting related-party transactions in addition to discussing the relationship between related-party transactions and audit fees, the researcher also discusses how industry specialty auditors can influence the relationship between relatedparty transactions and audit fees. previously, researchers had expected that industry specialty auditors would strengthen the relationship between related-party transactions and audit fees so that industry specialty auditors would charge a larger audit fee to companies conducting the related-party transactions. the results of the multiple linear regression in table 5 show that industry specialty auditors will charge a higher audit fee for conducting the related-party transactions so that hypothesis 2 is accepted. there are three reasons why the related-party transactions are difficult to disclose, namely because the related-party transactions are difficult to identify, all documents required to carry out the audit come from the company itself and finally, the internal controls that are implemented in the company do not necessarily identify related-party transaction (gordon et al., 2007). even though the auditors have performed appropriate audit procedures, it is possible that the auditors cannot reveal fraud from related-party transactions. this situation is one of the risks in the audit which is called detection risk. the industry specialty auditor is one of the attributes of audit quality because it increases the likelihood of identifying material misstatements in financial statements (fuentes & sierra, 2015). therefore, companies that carry out many related-party transactions are audited by industry specialty auditors, which will improve the quality of these financial statements because industry specialty auditors are considered capable of detecting errors, both errors and intentional errors. the auditor will charge a higher audit fee to the company following the advantages offered by the auditor. apart from the advantages offered by the auditor, the imposition of a higher fee is also the auditor's response to the risks faced from the related-party transactions (jiang & son, 2015). conclusion the results showed that related-party transactions had a positive and significant effect on the amount of audit fees paid to the auditors. furthermore, the results of research that interacted with relatedparty transactions with industry specialty auditors also found that industry specialty auditors strengthened positively and significantly the relationship between related-party transactions and audit fees. this study has limitations that can be considered for further research. the proxy used to measure industry specialty auditors was market share. however, this proxy still has disadvantages because it can generate different market shares. based on the results of the previous research, the auditor should consider and assess the risks in carrying out the audit. this needs to be done to determine the appropriate amount of audit fee so that it does not harm the auditor, either at present or in the future due to audit risk. as for future research, it is better to use proxies to measure industry specialty auditors which do not create different results for market share so that it does not contain ambiguity. f. o. perwita, i. harymawan/journal of accounting and business education, 5 (2), march 2021 41 references 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(1996). determinants of audit fees in bangladesh. international journal of accounting. https://doi.org/10.1016/s0020-7063(96)90034-5 y. n.a. alsarmi, e.r. ahemed /journal of accounting and business education, 7 (1), september 2022 59 determinants of efficiency of tax’s collection in oman yousuf nasser amur alsarmi1 essia ries ahemed2 1collage of economics, management and information systems, university of nizwa, oman 2 faculty of business, karabük university, turkey email: essa_ahmed15@yahoo.com doi: http://dx.doi.org/10.26675/jabe.v7i1.29835 abstract: this study examines the relationship between determinants of tax efficiency (tax awareness, electronic procedures and auditing procedures) and efficiency of tax collection in oman. the research uses method of a quantitative method via survey 150 usable data based on tax inspectors of tax authority in oman. the hypotheses of the present study utilized its variables via using smart pls and spss statistical tools. the findings revealed that a positive and significant link between tax awareness and efficiency. as well as, the findings revealed other possible determinants (electronic procedures and auditing procedures) has an insignificant influence on efficiency of tax collection in omani tax authority. the model of the current research might be beneficial to realize determinants of tax efficiency to growth the effective of tax collection. yet, practicing tax inspectors might understand tax awareness to improve firm effectiveness. article history received: 30 august 2022 revised: 27 september 2022 accepted: 28 september 2022 keywords efficiency of tax’s, collection, oman citation: alsarmi, y.n.a., & ahemed, e.r. (2022). determinants of efficiency of tax’s collection in oman. journal of accounting and business education, 7(1),59-71 introduction governments always have many options at hand for financing their activities and routes for their fiscal policy (asher, 2007). these routes include the imposition of taxes revenues and the most of non-tax revenues, levies, cost recovery and charges, property and investments income, local and foreign borrowing. since taxes are the basic income of many countries, this leads to an increase in the social and economic development of the state (shkarlet et al., 2019). a wave of several previous studies has mentioned and suggested that there is a notable and significant impact of the rates regarding to firm tax on firm performance (moayad et al., 2013; kanaan-jebna et al., 2022; tawfeeq & alabdullah, 2017; ahmed et al., 2020; qian et al., 2016; alabdullah, 2016; abushammala et al., 2015; alsulmani et al., 2021). the issue of ensuring the economic and regional security of the country is always considered related to the issues of the tax system (allayarov & rakhimov 2022). the tax issue in the gcc is no different from tax issues around the world. taxes are similar in nature around the world. in the late 1980s, direct and indirect taxes appeared. among the first to impose taxes in the gulf are saudi arabia and kuwait. they relied on different policies. kuwait began imposing corporate taxes in 1955, and saudi arabia imposed taxes on foreigners' income until 1975. journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v7i1.29835 y. n.a. alsarmi, e.r. ahemed /journal of accounting and business education, 7 (1), september 2022 60 it was later suspended due to its heavy dependence on foreigners in the field of development (harrison, 2010). as well as, in 2000, in order to attract investors and increased foreign investment, saudi arabia and also oman notified tax rates decreasing for foreign businesses. an imf in 2001, reports that gcc countries might no longer depend on some indicators and elements such as sailing the oil and asked them to cutting using and implementing individual tax of income, value added tax, and corporate tax and also for consumption tax. the international monetary fund referred to kuwait's tax policies and described them as effective, and advised adding taxes on consumption as well as on luxury goods (almutairi, 2014). around the world, the countries of gcc have one of the least demanding tax system. the average overall tax rate in the region of middle east is 23 percent, which is less than the global average around 44.7%. here we point out that the tax structure as well as the tax system in the gcc countries is not complicated compared to the rest of the world. the gulf states depend for most of their revenues on the energy market, and do not depend on the income generated internally. although there are advantages to this system, but it worries the authorities in the gulf states, looking to the future, they should consider other options (harrison, 2010). state fiscal policy requires effective tax control. as well as the development of the digital space requires high-efficiency control (drobyshevskaya, et al., 2020). the researchers always suggested axes and integrated new variables, they show the methods of tax fudging and the high effect of the auditing quality in the commitment of payment of the tax (soltani, 2022). tax awareness and knowledge certainly, is a fundamental part to ensure the compliance regarding tax payer with tax rules and laws (palil et al., 2013). to build an effective state fiscal policy requires tax control and a discreet tax system (eggertsson, 2010). on the one hand, expenses of the state's general budget must be covered and provided by this system., and on the other hand, the tax must be fair and not inhibit the level of growth in the country. today, taxes supplement the state budget with huge amounts (european commission, 2011). the difference between base rate and effective rate is most important issue when improving the efficiency of the vat system. many countries face different difficulties and challenges related to vat frau., but these countries must discover a way to enhance the collection efficiency by taking anti-fraud actions. despite the fact that vat is the primary source of tax revenues, there are essentially two concerns about the development of the vat system: the slow improvement in the collection of vat on domestic transactions and the composition of tax returns (sharma & sarker, 2014). there is uncover a troubling reality: a general poor of knowledge of the vat, for both expatriates and citizens (ewers et al., 2017). thus, the main objective to this work is to test the relationship between determinants of tax’s (tax awareness, electronic procedures, auditing procedures and efficiency of tax collection in oman. literature review and hypotheses tax awareness and the efficiency of tax collection hamid et al (2022) utilized quadrant analysis system to examine the opinions of taxpayers by to recognize the organizational weaknesses and strengths. they made a questionnaire online, and it was distributed to owners of small and medium enterprises. and their results can help tax authorities to take the necessary measures to increase tax awareness among smes. oladipo et al (2022) examined tax noncompliance of some taxpayers. they also studied the impact of tax justice on taxpayers, their behavior, and the state's tax revenues. the findings show that regarding the tax compliance level in the registered industrial companies in nigeria were significant. ewers et al (2017) study community awareness and perceptions of taxation in gcc a changing gulf economy is essential. people need to understand and know how why the vat will impact on budgets and purchases. the disturbing fact that the researchers found, is that there is a real lack of information among people about the value-added tax. hamid et al (2022) use a quadrant analysis system to determine the organisational flaws and strengths regarding the ordering between the satisfaction and priority about tax complexity, tax awareness, and tax education. they created a questionnaire online and disseminated it to the owners of small and medium-sized businesses. and their findings can assist tax authorities in taking the required steps to boost sme tax knowledge. oladipo et al (2022) investigated the tax noncompliance of a subset of taxpayers. in addition, they tested the impact of tax justice on taxpayers, their behaviour, and state tax collections. there y. n.a. alsarmi, e.r. ahemed /journal of accounting and business education, 7 (1), september 2022 61 were four hundred copies already have been distributed to the selected consumer goods and industrial goods manufacturing companies. their findings indicate that there is a tax compliance with high ratio of among nigeria's registered industrial enterprises. the purpose of al-hadrami (2019) study is to determine the awareness and perception of vat among bahraini consumers. the current study employed a quantitative methodology by calculating the population of bahrain. they proposed that the government of uk and the plan-makers in bahrain devote additional time and energy to establishing a plan and system for raising awareness among the bahraini populace. ewers et al (2017) investigate community understanding and perceptions of taxation in gcc; a change in the economics of the gulf is required. people must comprehend how and why vat will impact their budgets and purchases. the troubling finding of the researchers was that there is a genuine lack of knowledge regarding the value-added tax. in addition, several studies try to be useful in knowing how best the management of companies can effectively taxes for better business performance (alabdullah, 2016a; al-aamri et al., 2021; alabdullah et al., 2016; abushammala et al., 2015; alabdullah et al., 2021; al-hadrami, 2019). furthermore, see for instance ( ahmed et al., 2018; ahmed et al., 2019; ahmed et al., 2018; alabdullah, 2016b; al-aamri et al., 2021; alabdullah et al., 2016; moayad et al., 2013; m almashhadani, 2020; yousif alabdullah & ahmed, 2021; abushammala et al., 2015; mohammed almashhadani & almashhadani, 2022; ahmed et al., 2014). also other studies have shown that financial firm performance linked to the rate of taxes (abdulkarim kanaan-jebna et al., 2021; kanaanjebna et al., 2022; jebna & baharudin, 2015; jebna & baharudin, 2015). electronic procedures and the efficiency of tax collection thottoli & ahmed (2022) tested existing the compliance of omani corporations that value added tax and the role of the growing compliance officer in listed firms in oman financial market. the period time that he chose in his study was from 2011 to 2019. he mentioned in his study that there is a shortage of compliance in time by firms and that might affect a pressure to comply with the implementation of vat in oman. thottoli & ahmed (2022) examined present omani corporate compliance with vat and the expanding position of compliance officers in omani firms. from 2011 to 2019, his study compiled many measurements of compliance has been set by the cma. in addition to cma, msx, the tax authority in oman, and additional similar websites. according to his research report, corporations are not complying with the current law in a timely manner, and these enterprises may face pressure to comply with the introduction of vat in oman. wang (2020) it mainly studies the application of block chain technology in tax collection and administration. building on a literary criticism of current studies on the application of block chain technology in the field of taxation, it analyzes the potential limitations of applying block chain technology on tax collection and administration based on the technical characteristics of block chain. the results of his research paper are of great importance for the application of block chain technology in tax collection and administration. naveed et al (2019) the study to examine the impact of tax service quality on the online tax system and examine the mediating role of information and communication technology and information and communication technology. a cross-sectional research design and a quantitative research approach were chosen. thus, the present study is useful for tax authorities to increase the level of tax collection. olaoye and olatunji (2017) study of the impact of information technology on tax administration in southwestern nigeria. a descriptive research design was used, whereby a questionnaire was used to collect and analyze data using multiple regression and pearson product moment correlation. it is thus suggested that the relevant agencies responsible for collecting tax and implement individual consciousness in the method of seminars and consciousness of information technology suitability in tax management. wang (2020) focuses primarily on the application of blockchain technology to tax administration and collection. based on a study of existing research on the application of block chain technology in the area of taxes, this paper examines the potential constraints of utilising block chain technology in tax collecting and administration based on its technical characteristics. the implications of his research article for the implementation of block chain technology in tax collecting and administration are significant. naveed et al (2019) investigate the influence of tax service quality on the online tax system and the function of information and communication technology and information and communication technology as y. n.a. alsarmi, e.r. ahemed /journal of accounting and business education, 7 (1), september 2022 62 mediators. we selected a cross-sectional research design and a quantitative research methodology. consequently, the present study is valuable for tax agencies seeking to increase tax collection. olaoye and olatunji (2017) investigate the influence of information technology on tax administration in southwest nigeria. utilizing a descriptive research methodology, a questionnaire was utilised to collect data, which was then analysed using multiple regression and pearson product moment correlation. therefore, it is suggested that the relevant agencies (federal, state, and municipal governments) responsible for tax collection implement individual education in the form of seminars and education regarding the procedure and applicability of information technology in tax administration. auditing procedures and the efficiency of tax collection lohapan (2021) the study aims to test the impact of implementing digital accounting on the audit performance of tax auditors through audit efficiency and audit report as a result. as well as, it test the impact of digital culture, audit learning and stakeholder expectations on the implementation of digital accounting. the findings are useful to audit practitioners and regulators, allowing them to take advantage of these findings to develop training programs to improve audit professional competency. lohapan (2021) the purpose of this research is to learn how adopting digital accounting has affected the audit efficiency and audit report quality of tax auditors in thailand. it also analyses the way in which stakeholder expectations, digital culture, and audit learning influence the transition to digital accounting. a survey of 349 tax auditors from across thailand was used to compile this data. the findings can be used by audit professionals and regulators to improve auditing education and practise. thottoli and ahmed (2022) examines the appropriateness of a compliance audit on companies' compliance with financial statements disclosure guidelines with special reference to the status of companies listed on the muscat securities market (msm), oman. the result shows that there is a positive correlation to auditing companies’ compliance with financial data disclosure guidelines that enrich companies to ensure compliance with the regulatory guidelines of the sultanate of oman. with a focus on the situation of firms listed on the muscat securities market (msm), oman. thottoli & ahmed (2022) investigates whether or not a compliance audit of companies' compliance with financial statements disclosure rules is warranted. it uses the direct measure of compliance detailed in the cma's annual report and governing laws from 2011 through 2019. the outcome demonstrates a significant association between auditing companies' compliance with financial data disclosure rules and the enrichment of companies to ensure compliance with the regulatory guidelines of the sultanate of oman. benkraiem et al (2021) presenting new global evidence about the effects of these two factors on tax evasion. in general, although strong audit standards may mitigate tax evasion, ethical corporate behavior has a stronger statistical impact in achieving this goal; these findings hold after we control for heterogeneity and different sub-periods of global financial crisis. their findings, however, were that ethical behaviour and auditing regulation are mutually effective for high-income countries, countries with a medium level of investor protection, and mediumand high-efficiency corporate boards. rahayu (2020) research is to test the appropriateness of the acquisition results of the tax auditor's violations by the tax auditor using an effective tax information system, which is influenced by the level of competence of the tax auditors themselves. his research used a quantitative method using data from a questionnaire answered by 88 respondents (tax auditors) at the tax services office in west java, indonesia; in november 2018. its results show that the use of the tax information system is effective; it can increase the ability of tax auditors to comprehensively detect tax violations of specific taxpayers, which greatly contributes to enhancing the quality of tax audits. frequent change in the dynamics of tax rules and an ineffective information system can frequently dampen the effectiveness of tax audits. benkraiem et al (2021) provide additional global evidence about the influence of these two variables on tax evasion. in general, although robust audit requirements may reduce tax evasion, ethical business behaviour has a greater statistical influence on attaining this objective; these results are maintained after controlling for heterogeneity and different sub-periods (before, during and after the recent global financial crisis). however, according to their findings, ethical behaviour and auditing requirements are mutually effective for high-income countries, countries with a medium level of investor protection, and y. n.a. alsarmi, e.r. ahemed /journal of accounting and business education, 7 (1), september 2022 63 corporate boards with medium and high efficiency. thus, this study provides companies and policymakers with valuable insights. the purpose of rahayu (2020) research is to examine the suitability of the acquisition findings of the tax auditor's breaches by the tax auditor utilising an effective tax information system, which is influenced by the competence level of the tax auditors themselves. in november 2018, he conducted a quantitative study based on the responses of 88 tax auditors to a questionnaire administered by the tax services office in west java, indonesia. its results indicate that the use of the tax information system is effective; it can strengthen the ability of tax auditors to comprehensively uncover tax infractions by specific taxpayers, which contributes significantly to the improvement of the quality of tax audits. frequent changes in the dynamics of tax rules and an inefficient information system can frequently reduce the efficacy of tax audits. the relationship between tax awareness and efficiency of tax collection hamid et al (2022) their study suggests helping tax authorities by focusing on the elements that require urgent attention to raise tax awareness. oladipo et al (2022) found that there is a important level of tax compliance on the listed manufacturers. al-hadrami (2019) found that governments and policy makers should do more in designing a mechanism to spread awareness among individuals. ewers et al (2017) the results, reveal a disturbing truth: a widespread lack of knowledge of vat, for both citizens and residents. thus, the hypothesis developed is: hamid et al (2022) propose assisting tax authorities by concentrating on the aspects requiring immediate attention to increase tax knowledge. oladipo et al (2022) discovered that the listed manufacturers have a high degree of tax compliance. al-hadrami (2019) discovered that governments and policymakers should do more to build a mechanism to increase public awareness. ewers et al (2017) the results indicate a troubling reality: widespread ignorance about vat among both citizens and residents. thus, the developed hypothesis is: h1: a positive relation between tax awareness and efficiency of tax collection. the relationship between electronic procedures and efficiency of tax collection thottoli & ahmed (2022) recognized that there is a need of timely compliance by firms under the current law, and these firms may face pressure to comply with the implementation of vat in oman. wang, (2020) results are of great importance to the application of blockchain application in tax collection. naveed, et al., (2019) a study is useful for tax authorities to improve the level of tax collection. olaoye and olatunji (2017) it is recommended that the relevant agencies responsible for tax collection implement individual awareness in the form of seminars and awareness of the process and suitability of information technology in tax administration. according to thottoli & ahmed (2022), there is a lack of timely compliance by businesses with the current law, and these businesses may be forced to comply with the installation of vat in oman. wang's (2020) findings have significant implications for the implementation of blockchain technology in tax collecting and administration. naveed et al (2019) the study is beneficial for tax agencies seeking to increase tax collection. olaoye and olatunji (2017) it is suggested that the relevant agencies responsible for tax collection implement individual education in the form of seminars and education on the procedure and applicability of information technology in tax administration. thus, the developed hypothesis is: h2: a positive relation between electronic procedures and efficiency of tax collection. the relationship between auditing procedures and efficiency of tax collection lohapan (2021) his findings are useful to regulators and audit practitioners, allowing them to take advantage of these findings to develop activity programs to improve audit professional competence. thottoli & ahmed (2022) studies indicate a positive correlation between auditing companies' compliance with disclosure guidelines for financial statements that enrich companies to ensure compliance with the regulatory guidelines of the sultanate of oman. benkraiem et al (2021) they provides useful insights for y. n.a. alsarmi, e.r. ahemed /journal of accounting and business education, 7 (1), september 2022 64 institutions and policy makers. rahayu (2020) the research says that frequent change in the dynamics of tax rules and an ineffective information system can frequently dampen the effectiveness of tax audits. thus, the hypothesis developed is: the findings of lohapan (2021) are beneficial to audit practitioners and regulators, allowing them to build training programmes to improve audit professional competence using these findings. thottoli's analysis reveals a favourable association between auditing companies' compliance with disclosure rules for financial statements and the companies' adherence to the sultanate of oman's regulatory guidelines. benkraiem et al (2021) provide organisations and policymakers with valuable insights. according to rahayu (2020), the dynamic nature of tax rules and an ineffective information system can frequently reduce the effectiveness of tax audits. thus, the developed hypothesis is: h3: a positive relation between auditing procedures and efficiency of tax collection. methods this study is part of a larger study aiming to improve the competence of accounting students in an auditing course. the larger study examines the development of several areas of competence, including auditing, information technology, teamwork, ethics, professional scepticism and judgment, and written communication. this paper specifically reports the development of written communication competence. this study employs a mixed methods, counterbalancing experimental design. quantitative data were gathered from auditing writing tests conducted before and after each intervention, and qualitative data were collected from group interviews. the study was conducted in two phases, each lasted for six weeks. two groups of students received intervention in reverse order. this study a cross sectional and we used a quantitative method. we collected the data via questionnaire. the dependent variable was efficiency of tax collection the factors affecting tax awareness, electronic procedures and auditing procedures are also called independent variables.this is a quantitative cross-sectional research in which quantitative data are obtained by questionnaire (primary data). this study's dependent variable is tax collection efficiency tax awareness, electronic procedures, and auditing procedures are referred to as independent variables. tax inspectors who are presently working in tax authority (ta) are representing the population of the current study and we chose a sample size of 75 tax inspectors. this current research tested the link between tax awareness, electronic procedures and auditing procedures and efficiency of tax collection uses the questionnaire for analysis. for this study, the population will consist of tax inspectors currently employed by tax authority (ta). in this study, 75 tax inspectors served as the sample size. this questionnaire-based study evaluates the relationship between tax awareness, electronic procedures, and auditing procedures and the efficiency of tax collection. table 1. population of research tax authority population inspectors samples muscat 65 50 nizwa 3 3 sohar 7 7 total 75 60 this study used questionnaire for the measurement of variables (tax awareness, electronic procedures, auditing procedures and tax revenue effeminacy), and adapted questionnaire from (hsieh, chou, and chen, 2002). this study measured factors (tax awareness, electronic procedures, auditing procedures, and tax revenue effeminacy) using questionnaires adapted from hsieh, chou, and chen (2002). the unit of analysis that we used was the questionnaire for inspectors working in tax authority that have information of the nature of the taxation in oman in 2022. this study's analytical units are tax authority inspectors who are familiar with the nature of oman's taxation in 2022. they were requested to y. n.a. alsarmi, e.r. ahemed /journal of accounting and business education, 7 (1), september 2022 65 complete this study's questionnaire. this study collected data and analyzing it via using sem and pls approach. results and discussion response rates according to table 1, 71.7% of respondents were males and 28.3% were females. furthermore, 81.7% have a bachelor’s degree, where 5% hold a degree of master and 8.3% were a diploma. also, 58.3% of the respondents, their ages were between 23-32 years, however 38.3% were between 33-45 years. also, 48.3% of the respondents work experience 6 to 10 years, 18.3% in the field work experience 11 to 15 years. the inspectors have response are 57.6% in other hand 10.2% of managers response. table 1. demographic profiles demographics frequency percentage % gender male female 43 17 71.7 28.3 total 60 100 education diploma bachelor's degree master's degree doctoral degree 5 49 3 3 8.3 81.7 5 5 total 60 100 age less than 23 y 23-32 33-45 46-55 above 56 0 35 23 2 0 0 58.3 38.3 3.4 0 total 60 100 experience in tax authority less than 6 years 6 to 10 years 11 to 15years 16 to 20 years 21 to 25 years more than 25 years 29 17 11 2 1 48.3 28.3 18.3 3.3 1.7 total 60 100 principal role in tax authority staff inspector senior inspector team leader manager general manager 13 34 5 6 1 22 57.6 8.5 10.2 1.7 total 60 100 descriptive statistics table 2 shows the descriptive statistics of the research variables under study, namely; revenue efficacy (re), tax awareness (ta), electronic procedures (ep) and audit procedures (ap). the minimum value of re is 1 while the maximum value of re is about 5. the average of the re is about 3.060. the minimum ta is about 1 while the maximum ta is about 5. on average the ta is about 3.133. the y. n.a. alsarmi, e.r. ahemed /journal of accounting and business education, 7 (1), september 2022 66 minimum ep is about 1 while the maximum ep is about 5. on average the ep is about 3.182. the minimum value of ap is 1 while the maximum value of ap is about 5. the average of the ap is about 2.821. table 2. descriptive statistics of variables mean mini max s. d. re1 3.250 1.000 5.000 1.022 re2 2.661 1.000 5.000 0.950 re3 3.036 1.000 5.000 0.981 re4 3.339 1.000 5.000 1.040 re5 3.018 1.000 5.000 1.157 ta1 2.375 1.000 5.000 1.028 ta2 2.446 1.000 5.000 0.962 ta3 2.482 1.000 5.000 0.926 ta4 4.357 1.000 5.000 0.990 ta5 4.554 1.000 5.000 0.905 ta6 2.589 1.000 5.000 0.941 ep1 3.429 1.000 5.000 0.863 ep2 2.482 1.000 5.000 1.018 ep3 3.196 1.000 5.000 0.934 ep4 3.143 1.000 5.000 0.990 ep5 3.661 1.000 5.000 1.057 ap1 3.214 1.000 5.000 0.977 ap2 2.518 1.000 5.000 1.134 ap3 2.875 1.000 5.000 1.196 ap4 2.750 1.000 5.000 1.004 ap5 2.750 1.000 5.000 1.039 discriminant validity table 3. discriminant validity audit-pr electrpr taxaw taxeff audit-pr 1.000 electrpr 0.357 1.000 taxaw 0.536 0.541 1.000 taxeff 0.145 0.292 0.411 1.000 source: data processing output for smart pls. the table above furnish values of ave above 0.5 for all variables contained in the study model. reliability examine is done by looking at the cronbach's alpha and composite reliability value from the index block that measures the variables. the assessment of the determination coefficient (r²) has been measured. throughout this work, a variable that is endogenous shows an r² value of 0.185. tax revenue efficiency suggests that 18% of the variance in tax revenue efficiency will be explained by the predictors (tax awareness, electronic procedures and auditing procedures). table 4. variance explanation r square r square adjusted taxeff 0.185 0.138 the results in the table 5 showed findings with one hypothesis supported and two hypotheses not supported. the results revealed that a positive link and it is significant between tax awareness and efficiency of tax's revenue, with p<0.038, t = 1.784. as well as, show there is insignificant link between audit procedures and efficiency of tax's revenue, with p<0.266, t= 0.626. also, the results showed no relationship between electronic procedures and efficiency of tax's revenue, with p<0.309, t= 1.784. y. n.a. alsarmi, e.r. ahemed /journal of accounting and business education, 7 (1), september 2022 67 table 5. path coefficients original sample mean st.dev. t test p test results audt-pr › tax-eff -0.115 -0.081 0.184 0.626 0.266 not support electrpr › tax-eff 0.109 0.144 0.219 0.499 0.309 not support tax-aw › tax-eff 0.414 0.379 0.232 1.784 0.038* support *** p < 0. 001 **p < 0. 01, *p < 0.05 the tax system in of the social systems that were created to ensure the use of an open system and a tax performance that combines political, legal provisions and economic (nazarov, 2016). tax revenue has become an essential target in the tax drive strategy (le et al., 2021). the utilization of the electronic tax system is of great implication to enterprises. thus, the importance of the proposed determinants for the efficiency of tax collection should be determined and evaluated using new opportunities created by innovations changes (gazieva, abbasov, & guliyeva 2020). the findings show a positive and significant link between the tax awareness and efficiency of tax's revenue, with p<0.038, t = 1.784. this revealed that when the tax inspectors have more awareness about tax will lead to enhanced efficiency of tax’s collection omani tax authority. this findings are consistent with prior study from (yang & chen, 2018). the findings show that the revenue-sharing scheme and costsharing scheme can improve system efficiency and manufacturer's incentive. another study done by bernard et al (2018) found the tax awareness and knowledge had a significant and positive relationship on tax compliance. asrinanda (2018) found that the tax awareness positive and significant impact on taxpayer compliance. thus, the findings of this study indicate when increase awareness will improve and enhance the efficiency of tax’s collection. for the second determinant of tax is audit procedures, the findings show there is a negative and insignificant relationship between audit procedures and efficiency of tax's revenue, with p<0.266, t= 0.626. this revealed that when the tax inspectors play more role with audit procedures with tax will lead to decrease efficiency of tax’s collection. this findings are consistent with prior study by amah and nwaiwu (2018) they found that the audit practice is poor and low contribution of personal income tax and firm income tax in nigeria. for the third determinant is electronic procedures, the role of the electronic system is ease of collection and assessment and improve the efficiency with which revenue is collected. the findings showed there is no relationship between electronic procedures and efficiency of tax's revenue, with p<0.309, t= 1.784. this revealed that when the ignore the electronic procedures with tax will lead to decrease efficiency of tax’s collection. the findings indicated that the electronic tax management system is poor and not increased efficiency of revenue collection in oman. conclusion the main key of the current work is to test the impact of determinants for the tax effectiveness represented by tax awareness, audit and electronic procedures on the tax efficiency of tax collection. the findings of this research point out that the tax awareness was significant to the efficiency of tax collection. the study also revealed that audit procedures has negative impact on efficiency of tax collection. the current work reveal insignificant relationship between tax electronic procedures and efficiency of tax collection. due to the existence of a gap in the previous studies and a lack in test few tax determinants in oman, the current study contributes by providing knowledge to the existent literature in omani tax authority. this work suggest that tax authority and their tax inspectors to focus on such tax awareness for enhancing efficiency of tax collection in omani.therefore, this study implies that when tax determinants’ are properly implemented, the efficiency of tax collection will be improved. thus, this improved efficiency of tax collection will positively improve country economy in the long-running. y. n.a. alsarmi, e.r. ahemed /journal of accounting and business education, 7 (1), september 2022 68 references abdulkarim kanaan-jebna, ahamd suhaimi baharudi, & tariq tawfeeq yousif alabdullah. 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(2021). a cross-sectional analysis of the influence of corporate governance features on the organizational outcomes: an assessment. iiuc studies, 17, 9–26. https://doi.org/10.3329/iiucs.v17i1.54981 m. ikbal/journal of accounting and business education, 5 (1), september 2020 1 client’s effort in intervening state’s financial audit result: grounded-theory approach muhammad ikbal faculty of economics and business, mulawarman university, indonesia email: muhammad.ikbal@feb.unmul.ac.id doi: http://dx.doi.org/10.26675/jabe.v5i1.12458 abstract: this paper draws its conclusions using an inductive approach. we find interesting symptoms in the field related to clients' efforts to influence audit opinion in the public financial audit process in various regions in indonesia. for the purpose of inductive reasoning, we use a grounded theory approach as a tool for analysis and for drawing conclusions. our findings are that there are at least seven ways and efforts taken by clients to intervene with the audit decisions made by bpk, and thus we eventually formulate a theory that the audit system in the government requiring interaction between the auditee, in this case the financial management apparatus and the bpk auditor, gives birth to a communication. this communication is used by the auditee to influence the results of the audit. the research implication is that there are ways for auditors to prevent clients from misusing the opportunities to influence audit result. keywords: effort of client, audit opinion, grounded theory, coding, concept, theorizing. introduction as some other sectors, the public sector is also a target of accusation as the den of corruption, collusion, nepotism, inefficiency and source of the state‟s improvidence (potrafke, 2019; sinha et al., 2019). the government as one of public sector organizations is not excepted from the list. it is ironic considering that the government public sector organization is an institution running the state administration whose legitimacy comes from the society (bobonis et al., 2019; b. zhang et al., 2017). the government administration cannot be separated from the management of state‟s finance, which actually is an accumulation of assets owned by the state and for which they have to be held responsible to the people (hyndman & lapsley, 2016; jacobs, 2016). audit to the management and responsibility of the state‟s finance is an important element to create a public accountability (axelsen et al., 2017; hay & cordery, 2018). in indonesia, in performing the financial statements audit, auditors must refer to state financial audit standards and audit management guidelines and other implementing regulations (reni & anggraini, 2016), which refer to spkn such as: implementation guidelines, technical guidelines and red book (set forth in the regulation of bpk ri number 01 year 2007 particles 5 and 8). in addition, in performing their duties, every auditor and other bpk implementers must comply with the code of ethics as set forth in the regulation of bpk number 02 year 2011 concerning bpk code of ethics (paeh, 2017). integrity, objectivity and independence are highly important in the professional world of an auditor (khalil & ozkan, 2016; saxena & dey, 2016). journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ mailto:muhammad.ikbal@feb.unmul.ac.id http://dx.doi.org/10.26675/jabe.v5i1.12458 m. ikbal/journal of accounting and business education, 5 (1), september 2020 2 integrity is a character element which shows an individual‟s ability to realize what they have guaranteed they are capable of and what they believe (kleboth et al., 2016). objectivity means honesty in considering facts, free of personal interests inherent to the facts they are dealing with (naslmosavi & jahanzeb, 2017; b. zhang et al., 2017). meanwhile, independence means being free from any influence, neither controlled by nor dependent on others (putri et al., 2017; y. (elli) zhang et al., 2016). auditor is demanded to keep on improving and controlling themselves when dealing with any auditee. also, auditor is expected to be able to understand the auditee‟s behavior and build communication and cooperation with the auditee (ma‟ayan & carmeli, 2016). there have been many cases in indonesia where the auditee tried many ways to influence the auditor to make the audit result look as they wished it would (asmara, 2016; latan et al., 2018; putri et al., 2017). one of these methods they employed was bribery. the attempts made by those auditees, including the government apparatus, were influenced by various motives, and one of them was their wish to evade the suspicion of abusing the finance (asmara, 2016; farooq & shehata, 2018) or to obtain a reasonable opinion without exception (pamungkas et al., 2018). the various factors which could influence the client‟s expectation of audit judgment include auditor‟s education and experience, auditee‟s experience, good relationship with auditor, presence of non-audit reward given by the auditor, and these variables could have both positive and negative effects (koch & salterio, 2017; latan et al., 2018). however, this study focused more on the audit process by kap (public accounting firm) and used only one measurement, i.e. client‟s attempt to influence certain accounts. an audit process involves at least two parties, namely the auditee and the auditor. in performing the audit, relationship and communication will arise and it is possible that negotiation emerges (cipriano et al., 2017; kulset & stuart, 2018). it is in this negotiation that the auditee or client‟s wish might occur to influence the decision made by the auditor in their audit (he et al., 2017). the relative power in auditorclient relationship is an important topic in accounting research it is this relative power of the two parties which determine the negotiation result (kulset & stuart, 2018). some previous studies have investigated the negotiation process between auditor and clients from the auditor‟s point of view (cipriano et al., 2017; hua & sun, 2016; kulset & stuart, 2018; svanberg et al., 2018). in indonesia, not many studies on negotiation process between bpk auditor and government apparatus as an auditee in determining audit judgment from the auditee‟s perspective have been conducted. therefore, it is important to conduct research on negotiation process between bpk auditor and government apparatus as the auditee in determining the audit judgment from the auditee‟s perspective in indonesia. this research would explore information to draw conclusions on how the wish of government apparatus as an auditee in influencing audit judgment made by bpk auditor using grounded-theory. the main issue in this case was that no previous study has investigated the wish of government apparatus as an auditee to influence the audit judgment by bpk auditor, hence a sturdy theoretical framework is needed through information exploration from the existing phenomena. this research structure will then present a theoretical framework and grounded theory concept, followed by research methodology, and result and discussion and eventually some conclusions will be drawn. literature review grounded-theory grounded research pioneered by glaser and strauss in 1967 in the united stated and then introduced in indonesia by schiegel, is a study which departs not from a theory, but rather from the field factual data. these data are processed into a theory based on a deductive method of thinking. grounded research is from an empirical world, rather than from a conceptual or abstract one. this is because grounded study emphasizes on the birth of a theory based on empirical data and social reality. grounded theory is a systematic qualitative research procedure, where researchers build a theory which explains the concept, process, action, or interaction regarding a topic at a wide conceptual level. as its name suggests, the goal of m. ikbal/journal of accounting and business education, 5 (1), september 2020 3 grounded theory is theoritizing social data and phenomena. theoritization is a method of creating an action/interaction-oriented theory; hence it is suitable to be used for research on behavior. glaser and strauss (carmichael & cunningham, 2017; charmaz, 2017) suggests that the grounded theory method under the post-positivistic-naturalistic paradigm umbrella is a qualitative research method which employs a number of systematic procedures to inductively build a substantive theory regarding a phenomenon. the findings of such a study constitute the formulation of theory on the reality under study, rather than a number of less relevant themes. this research neither derives from nor tests a theory (such as the case of quantitative research), rather it departs from data towards a theory. for that purpose, what it takes for this process towards a theory is a well-planned and organized (systematic) procedure. the grounded theory approach builds a theory based on field (empirical) data, for the following reasons: no one apriori theory can cover the varied facts in human life; the researcher as the research instrument knows exactly what happen in the field and they believe in what they see, therefore, the researcher tries their best to have a neutral stand; and the basic theory can be more responsive or more suitable with the contextual values. the inductively obtained data are not intended to test a hypothesis, rather to be abstracted and sorted for their relevance. thus, if the researcher builds a basic theory (bottom-up), then this theory will be clearer, after the data have been analyzed, since in its process an adjustment will be made as the collected data increase (carmichael & cunningham, 2017; urquhart & fernández, 2013). methods this is a combined study between qualitative studies which uses grounded theory as its instrument. grounded theory is used to build a theory from a phenomenon, i.e. the client‟s effort to influence the audit result. no previous studies have been conducted on this concept, hence a theory needs to be built, through the grounded theory instrument. the closest variable is the auditor‟s independence, yet it has not given the overall picture of client‟s attempt in influencing the audit result, particularly at public sector audit realm. furthermore, after a theory is built, the next step is to try to build a proposition. as our source of information, we use informants from regional governments in indonesia. we deliberately hide our informants‟ biography since it will give a less favorable impact on the informant. the data are explored through interview only for the research purpose results and discussion grounded-theory method in grounded theory, the term “coding” generally means making description and interpretation. coding has four activities, namely: labelling, selection, recording and in general the coding process begins with labelling the discrete phenomenon according to its “content and meaning” or giving a “notation” based on its “conotation”(muller et al., 2016; urquhart & fernández, 2013). this initial stage is then followed by sorting activities which refers to the comparison of label characteristics against other labels to determine the classification based on the characteristic combination and sequence (dixon et al., 2017; urquhart & fernández, 2013). the recording activity is an open coding writing product as a material for reflection and abstraction. the scanning activity refers to the abstraction of relationship characteristics in unit labels in order to understand their systemic dimensions. this stage is called open coding which means the process of breaking down, checking, comparing, conceptualizing, and categorizing data (carmichael & cunningham, 2017). following this is an axial coding which refers to the activity of seizing and mapping data based on the results of breaking the open coding, by making links between categories (muller et al., 2016). the axial coding is done by utilizing a “coding paradigm.” based on the axial coding results, the next stage is selective coding, which means the process of selecting core categories, link them with other categories systemically (charmaz, 2017). m. ikbal/journal of accounting and business education, 5 (1), september 2020 4 theory development process during the induction process, there are four main stages in building local knowledge from the field, they are [1] coding, [2] concept, [3] category, [4] theory. coding coding is the process finding, naming and preparing theoretical sample in the form of social situation in the research locus, based on the nature and size in its dimensional range. the coding stage is the most boring one since it deals with such a large amount of discrete phenomena found in the field and associated and compared each other on an ongoing basis to be abstracted into a meaning-intensive concept. this procedure is highly helpful in providing accuracy and specifity of a concept in data theoritization (carmichael & cunningham, 2017; dixon et al., 2017). figure 1. theory development mechanism using grounded-theory [(developed from strauss & corbin (muller et al., 2016)] numerous social situations encountered in the field will be explained in discussion related to the development of theory of client or auditee‟s (in this case the government apparatus) attempts and desire to influence the bpk audit result. as preliminary information in order to collect numerous social situations, we interviewed some informants from the regional government in this research site: “…formally we are communicative and cooperative with the auditor, and well this means we publicly support the audit process, yet technically, honestly we mostly give something in the form of cash, and we do it secretly, it was actually the most..... our colleges in some offices even invite them to a karaoke or to zona or muse (night clubs in one town).... some even give travel tickets for lebaran holiday, some other goes further to stop them at the airport and even showing a machete, saying “money or machete, you choose”, this is just a kind of terror.... yesterday the public work building there (indicating a regency) was burned, when that building contained archives, all project archives were burned…” to figure out what exactly the client or government apparatus did these for, the researcher interviewed some informants: substantive theory category category category concept coding concept concept concept concept concept concept concept concept m. ikbal/journal of accounting and business education, 5 (1), september 2020 5 “...basically, they want a good audit result, and we know exactly what we did wrong, thus it‟s better that our mistakes are not exposed disclosed, then (our) main goal is to obtain wtp, because the mayor keeps on demanding us to get wtp...” based on this interview, some efforts made by the apparatus to influence the audit result can be implicitly. the next section will discuss in more detail these various social phenomena using interview with some other informants. attempts of giving money or goods to auditor many vocabularies could indicate a bribery practice. in english, such terms as bribe, graft, embezzlement, or fraud are available (farooq & shehata, 2018). judging from this fact, it is safe to say that bribery is not only an issue in indonesia nor in developing countries, rather it also exists in developed countries. the problem is that bribery has been culturally deeply rooted in indonesia. in indonesian language, the vocabularies to mean bribery other than suap are so many. however, the one culturally having the deepest root is upeti (tribute), which comes from the sanskirt utpatti which means more or less a proof of loyalty. according to history, upeti is a form of offerings from adipati (duke) or lesser kings to the conquering king (de haan, 2017). many cases in the world and even in indonesia which could depict the attempts to bribe for varied purposes. the skk migas bribery case, for example, was done since the briber expected that the esdm ministry‟s production target would be approved by dpr (house of representatives). another case was the bribery done by artalita suryani in which she bribed the prosecutor urip gunawan to set the blbi case suspects. still another example of bribery case was hambit bintih‟s bribery to the judge of constitutional court akil mochtar in an attempt to influence the court verdict on pilkada (regional head election) dispute of gunung mas regency. the beef import bribery case was also worrisome amidst the government‟s effort to promote food resilience campaign. the alleged corruption case in the provision of beef import quota emerged as the corruption eradication committe (kpk) arrested ahmad fathanah with some money amounting to one billion rupiah as the evidence. one of the many forms of bribery or graft was the bribing of bpk auditor in an attempt to influence the audit result in favor of the client in this case the regional government apparatus. the following was the researcher‟s interview with an employee of x regency‟s finance department using the local language. ".... actually it was habit, there were also person of the bpk who are willing to accept money, usually we give it in the car, put it under the seat, in time the driver will tell them, ... we rarely give directly, we gave more often gifts, like typical food, we put money in the food box ……” such phenomena frequently happened, particularly in some regions with many faults in terms of their regional budget usage, that it forced their apparatus to do whatever it took to influence the audit result in favor of the auditee‟s expectation. the informant above explained that it had commonly occured, i.e. some auditors were willing to accept money. usually, the apparatus gave the money within a car, placed it under the seat, and after that the driver would tell them that somebody asked them to accept something. very rarely did they give the money in person. in some cases, the briber put the money into a box of local souvenirs, allowing the recipient to receive the money without having the time to refuse it. nevertheless, not all bpk auditors could be intervened, most of them refused to accept the money or to be bribed. “...well it‟s hard, can‟t do nothing... we once try it and they won‟t receive it, they even refuse our invitation to have lunch together, let alone receiving money, even communicating with them is a struggle...” it could be concluded that some clients tried to influence the audit result by bribing the auditor. some succeeded and many of them failed, depending on the auditor‟s integrity. m. ikbal/journal of accounting and business education, 5 (1), september 2020 6 efforts of intervening the auditor by giving opinions on certain accounts usually, the client had been fully aware of where they made mistakes or faults at. hence, the client tried to intervene the audit result. various accounts in regional government‟s financials statements were misrepresented by their financial managers. below was a summary of an interview with an informant who was an official of financial department at a regency in east java province. “...what has been a problem now is the recording of government assets,... sometimes it is difficult for us to acknowledge the right of a local government-owned property, when the land was actually owned by the province government, yet a local government‟s building is constructed on it, hence we try to tell our bpk folks that it is hard to record asset ownership, since no official grant has been made from suroboyo (east java government), hence we teach them that this and that are how we record it..., to allow them to help us...” in this case, the apparatus tried to explain how to outwit the record of assets whose ownership remained unclear; sometimes they were recorded not using the generally accepted accounting procedure. the regional government sometimes had acknowledged that the land was their asset, yet they have no ownership right over the land. the same applied to the findings related to the amount of direct and indirect spending honorarium. sometimes, the apparatus tried to convince the auditor to skip the audit of direct and indirect spending realization report, by stating that the honorarium standard had been in accordance with the regional government decision letter and some even had decision letter of skpd chief, while other supporting regulations were concealed. “....the difficult part is about honorarium issue, it‟s impossible for us to give an agency chief a small honorarium, the cost standard was not at that amount, thus we making a maneuver by making a regional head decision letter of agency chief decision letter to make a legal basis to give a honorarium at slightly higher rate...” another way they could do was making a spending whose account was inexistent. this was also usually done by making a new account, which did not comply with the government accounting standards. effort of providing travel facility for auditor’s personal interest such factor as reward in the form of gift and sanction or punishment received by the auditor in performing the audit might also influence their independence in giving opinions of the audit result (naslmosavi & jahanzeb, 2017). the reward received by a bpk auditor sometimes could not meet their needs, thus in their attempt to fulfill these needs, the auditor sometimes did unethical conducts. below was an interview with one informant from a municipality government in east kalimantan. “...explicitly they did not tell anything, yet implicitly they told me like this ...... my family and i have to go to my hometown, next week happens to be the start of fasting month, it makes me dizzy when it hasn„t been the date for my salary payment, and the flight ticket is crazy high-....that's it, talking that way makes us understand what they actually want, and well we have no choice but to prepare for them 4 shuttle flight tickets for the whole family, most importantly is the audit result is ok....” this was one ofrm of implicit request of facility from the auditor; it was real and actually happened. the provision of travel facility to the auditor constituted a form of client‟s efforts to influence the audit result. sometimes, such a request came from the clients themselves, and they usually asked all tickets of the auditor to be refunded, some auditors gave them, yet some others did not give them, since they thought it was a violance of their independence, particularly as a bpk auditor. accordingto dridi & boubaker (2015) independence was an unbiased and impartial view in performing audit tests, evaluation and its results, and issuance of report, and was the main reason for the society to put their trust on them. m. ikbal/journal of accounting and business education, 5 (1), september 2020 7 procurement certain staff to help auditor procuring certain staff was usually done in an attempt of assisting the auditor in performing the audit process. many goals could be involved when this modus operandi was employed, in this case it was to influence the the audit result through the staff they procured to help the auditor, or to even give personal gratification through a staff of the opposite sex. for example, a pretty female staff was procured to help the male auditor in their attempt to distract the auditor‟s concentration. the following was an interview with one informant from a financial management division of a regency in north sulawesi. “...so, an auditor is also a human, sometimes they will be conquered if they are facing a pretty girl, that‟s just what we need to use, they might even invite the girl to have lunch together, at least this is what we can do to make him give us a good opinion for our audit result...” this procurement of staff assistance to some extent will have an impact on the auditor‟s independence, either positively since the audit process would be accelerated or negatively as it could also distract the auditor, while being enjoyed by the auditor since he was human after all. providing entertainment facility for auditor the entertainment facility or even night entertainment was one of hedonic needs of the society, particularly the urban society. the same applied to the auditor. it was possible for them to accept or even request to be provided with night entertainment facility as the requirement to make their personal decision. below was an interview with one financial staff of a municipality government in west java. “...of course i have (that experience), we opened a room, and they followed us.... turned out they also liked it, maybe because it happened to be out of town and they were auditor from the central...” only a few accepted this facility provision, most of them rejected it, since it would be extremely difficult to influence the auditor if what they gave was not proportional to the additional audit fee. entertainment was merely an entertainment; it did not influence the audit result too much. below was an interview with one informant from sulawesi island. “...even if they followed us to enjoy the entertainment, it‟s hard to make them follow our rule, they still used the actual audit instruments and their independence was not compromised...” providing the best and selected audit samples the proof of a competent audit should be obtained from inspection, observation, asking questions, and confirmation as the adequate bases to declare an opinion of the audited financial statements. whether or not the audit evidences were sufficient had something to do with, among other things, the audit sample design and size. the sample size needed to produce adequate audit evidence depended on the sample objective and efficiency. for certain purposes, the sample efficiency was associated with its design. a sample would be more efficient than other samples if it could achieve the same objective with a smaller sample size. generally, a careful design would produce a more efficient sample. an auditor should use a more efficient sample in performing their job, yet sometimes the client provided the best sample, thus it failed to describe the actual evidences (asmara, 2016). below was an interview with one client from a municipality government‟s financial management staff in one province in sumatera. “...we are usually asked to provide only the best evidences, and the poor ones were kept, yet sometimes the auditor asked them randomly, and this is what confused us…” m. ikbal/journal of accounting and business education, 5 (1), september 2020 8 one of these attempts did not fully succeed, since the auditor used a random sample. audit sampling could be applied to both control and substantive tests. nevertheless, usually auditor did not apply the audit sampling in the testing procedure in the form of asking questions or question and answer, observation, and analyitical procedure. the audit sampling was commonly applied by the auditor in the form of vouching, tracing, and confirmation. when applied appropriately, the audit sampling would produce a fairly adequate audit evidence (dridi & boubaker, 2015), as what was expected by the third field job standard. client getting rid of audit evidences most of the independent auditor‟s jobs in their attempt of giving opinion to financial stataments consisted of those efforts to obtain and evaluate audit evidences (sirois, bedard & bera, 2018). the validity measurement of this evidence for audit purpose depended on the independent auditor‟s consideration; in this case the audit evidence was different from legal evidence as set forth explicitly by tight regulations. audit evidences had varied effects on the conclusion drawn by the independent auditor in order to give an opinion to an audited financial statements (ma‟ayan & carmeli, 2016). the relevance, objectivity, timeliness, and existence of other audit evidences which confirmed the conclusion all had an influence on the evidence competence. sometimes, to influence the audit result, the client tried to get rid of the audit evidences or direct the audit evidence. below was an interview with an informant from finance department of a regency government in central java. “...well it is indeed rarely, but there was once.... i don‟t know if it‟s deliberate or not, once a public works archive warehouse was burned down, when every audit evidence was kept there, of course no audit was made.... but it‟s too risky, very rarely done, the most we could do is to make as if there is a theft, hence some of the files or laptop are gone...” the effort of getting rid of audit evidence was also once done by the state‟s higher institution the supreme court, over the costs of suit case report in sc. the bpk audit of the costs of suit in sc was only carried out at the beginning of 2008. some thought this delay could be a means of getting rid of evidences and manipulating financial statements. the coordinator of political corruption division of indonesia corruption watch, fahmi badoh once stated: ( www.detik.com). "it is actually obvious that the sc tries to evade it. there might be an attempt of getting rid of evidences. manipulation of financial statements is a possibility, the reconciliation between the two state institutions haven‟t solved the problem. even worse if the sc keeps on postponing the audit, well only reconciliating does nothing if no audit is carried out. they have to distinguish public and elite issues…" icw was concerned about the substance of gr on procedure of managing costs of suit in a court issued by the sc. this gr the sc claimed to be a legal umbrella for managing the costs of suit was deemed to benefit only the sc. fahmi badoh continued: "i'm afraid this gr would be a tool to justify those practices in contradiction with the budget management rule. it's possible that this gr would be misused" giving a terror effect to the auditor the pressure from the client‟s management often occurred during a conflict situation between the auditor and the client. this conflict situation emerged when the auditor and the client were on the opposing sides, i.e. they disagreed on the financial statements evaluation (asmara, 2016). this, in turn, made the client influence and even forces the auditor to do an action which violated the audit standards to their favor, including in giving an opinion which failed to describe the real condition. in the face of such condition, argumentation usually occured and it was not entirely rare to see one party resorted to intimidation and violence. m. ikbal/journal of accounting and business education, 5 (1), september 2020 9 “...this a friend‟s story, they went so far as to stop the auditor at the airport, and even threatened him with a machete, money or machete, choose, and eventually the auditor conceded and changed the audit result…” the auditor‟s independence crumbled under a conflict situation. this conflict situation got even worse when the client began to intervene the audit process that it might influence the auditor‟s opinion of their historical financial statements. from the private sector perspective, khalil & ozkan (2016) suggested that major kap auditors (big four) tended to be more infrequently conceded to the management‟s pressure when the auditee‟s financial statements should be published, or the auditee had a problematic financial condition, and there was a high risk of auditee take over. this was because if the auditor conceded to the client‟s intervention and followed what the client wanted, then the litigation risk of improper audit would be very high (khalil & ozkan, 2016; y. (elli) zhang et al., 2016). concept and category the next step was to build a concept. concept was the main components to shape a theory. concept was abstract, a universal mental entity referring to a category or class of an entity, event or relationship (jacobs, 2016). the term concept came from the latin word conceptum, meaning something understood. aristoteles in "the classical theory of concepts" suggested that a concept was the main constituent of scientific knowledge formation and human thought philosophy. concept was an abstraction of an idea or mental depiction, expressed in a word or symbol. concept was also expressed as a part of knowledge built from various kinds of characteristics (holton & walsh, 2016). a concept emerged since it was built, rather than spontaneously emerge. it occurred from various sets of phenomena built from coding stage (gibbins et al., 2001). based on the numerous codings describing the many social realities and phenomena in the field, a concept which relates to the efforts of influencing the audit result could be built: a) the effort of providing money or goods to the auditor. the provision of money or goods or other forms of materials, would encourage the bpk auditor to take actions which violate their independence. conceptually, it was possible for any auditor receiving small or cheap audit fee from the bpk to accept what the auditee was about to give in order to meet their needs. b) the attempt to intervene the auditor by giving opinions on certain accounts. giving opinion on certain accounts to some extent would influence the auditor‟s opinion. it was worsen by the fact that some auditors were less aware of certain cases or transactions related to spending and income in the regional government. c) the effort of providing travel facility for the auditor personal benefit. not too much different from providing money or goods, providing travel facility to the auditor could influence the audit result. the influence got even more significant if the auditor was in desperate need of official travel costs and the efforts was more likely to successfully influence the audit result. d) providing entertainment facilty for the auditor. the provision of entertainment facility had been one of the attempts made to influence the audit result. while, based on the interview, this method had no significant influence on the audit result, it remained a fact that this was one of the attempts made by the auditee. e) providing the best and selected sample audit. it had been something common to provide only the best audit sample, since it would influence the audit result. yet, the result could still be dealt with by the auditor using audit sampling to allow them to randomly use audit evidences. f) getting rid of audit evidences. this was an extreme way in dealing with an auditor, yet if this was found out, it was possible to lead the perpetrator to criminal realm. getting rid of audit evidences would influence the audit result and the influence was even worse if the evidences gotten rid of were those of problematic transactions. g) giving terror effect to auditor. giving the terror effect was also an extreme way of influencing the audit result. however, such an attempt was rarely done, except for major cases and the auditor was also in conflict with the auditee. m. ikbal/journal of accounting and business education, 5 (1), september 2020 10 theory to make it credibel, a theory should have an “explanatory power”, by associating concepts and categories, as well as the specificity; categories should be related to each other and tightly related with the data. in grounded theory research, the term theory meant an explanation or abstract understanding of a process regarding a substantive topic based on the data. there were types of theory produced in grounded research, namely substantive and formal theories (carmichael & cunningham, 2017; muller et al., 2016). (a) substantive theory emerged from studies of real social conditions such as customer relations management, professional practices, gender relationship, leadership, or internet communication. since this theory presented a relationship which is nearly simiar to its empirical reality, this theory is quite helpful for researchers in business or professional realm. (b) formal theory was developed from substantive theory. this theory was produced from various situations and varied backgrounds, was conseptual in nature and had a high generality. based on the collected coding according to various social phenomena, a concept was then prepared and a category was made and eventually a theory was formulated, in this case it was related to the attempts to influence the bpk audit result. the theory was as follows: “the audit system in the government requires an interaction between auditee, in this case the financial management apparatus and the bpk auditor, and such interaction gives birth to a communication. this communication space is used by the auditee to influence the audit result, aiming to evade legal actions and obtain achievement in their state and regional financial management”. the attempts to influence the audit result had various measuring dimensions and numerous kinds of way, including: attempt to provide money or goods to the auditor; attempt to intervene the auditor by giving opinions on certain accounts; attempts to provide travel facility for the auditor‟s personal benefit; providing entertainment facility for the auditor; providing the best and selected audit samples; getting rid of audit evidences and giving terror effect to the auditor. conclusion the grounded theory‟s approach constituted a qualittative study which employed a number of systematic procedure in order to develop a bottom-up theory or a set of separate data. as the name implies, the goal of grounded theory was data theoritization. theoritization was a method of building an action/interaction-oriented theory, hence it is suitable for use in research on behavior. this research wanted to draw a conclusion from a social phenomenon that there was an interaction between the client and the auditor. based on the collected coding according to various social phenomena, a concept was then prepared and a category was made and eventually a theory was formulated, in this case it was related to the attempts to influence the bpk audit result. the theory was as follows: the audit system in the government requires an interaction between auditee, in this case the financial management apparatus and the bpk auditor, and such interaction gives birth to a communication. this communication space is used by the auditee to influence the audit result, aiming to evade legal actions and obtain achievement in their state and regional financial management. the limitation of this research was that due to its subjective nature, this research result was not intended for generalization, thus it had limitation in external validity in scientific research. for future research, it was suggested to expand the scope of informants to include various skpd levels with more complex job concentrations and to consider the culture of each region in indonesia. references asmara, r. y. 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(2016). non-audit services and auditor independence: norwegian evidence. cogent business and management, 3(1), 1–19. https://doi.org/10.1080/23311975.2016.1215223 m. marsely/journal of accounting and business education, 5 (1), september 2020 25 peer tutoring as one best practice for accounting learning in vocational education mika marsely accounting department, politeknik negeri malang, indonesia email: mika.marsely@polinema.ac.id doi: http://dx.doi.org/10.26675/jabe.v5i1.12634 abstract: this study attempts to investigate the use of peer tutoring and assess the effectiveness of peer tutoring of accounting learning at politeknik negeri malang. a descriptive research approach with a case study was employed in this research. the information was gathered through documentation, observation and in-depth interview. the accounting learning was conducted by the author by applying the same-age peer tutoring (co-peer). the findings reveal that peer tutoring is a very effective learning strategy both to tutors and tutees. tutors feel happy, proud, and satisfied when the lecturers trust them to give the materials in front of their friends. in fact, the tutees also feel more comfortable because the learning activities have become more relaxing and not stressing that the students are brave enough to ask more questions. peer tutoring has improved the students’ academic achievements, communication skills, responsibilities, patience, empathy, sympathy, and strengthened their social skills both for tutors and tutees. as we know, these skills are greatly needed in our life in the world. the students have to be equipped with the twenty first century skills as stated by unesco and ilo. the author suggests that the ability should be utilized within the premises of the educational institutions. it is a must for polytechnic students to be equipped with such ability due to its great impacts on the development of their future careers. the graduates are believed to be able to productively perform their ability in the society. keywords: peer tutoring, accounting learning, vocational education, tutor, tutee introduction various learning problems often occur in vocational education, such as lecturers’ teaching ways, students’ conditions, and lack of facilities provided by the higher education institutions to well support the teaching and learning processes. however, in this study, we will not discuss the learning problems caused by lack of facilities, but focus more on how to overcome the learning problems caused by the lecturers’ teaching ways and students’ conditions. based on the interviews conducted by the author to the accounting students at politeknik negeri malang, it was found that the lecturers had some deficiencies in their teaching ways: (1) too fast explanation, (2) poor mastery on the materials, (3) less detailed explanations, (4) having no ability or skill to clearly explain the materials, (5) not willingly listening to the students’ opinions or critics that the students became less motivated to study, and (6) poor understanding to the students’ conditions when studying. the second is related to the problems coming from the students themselves, including: (1) less motivated to learn because of feeling sleepy, bored, sick, and not interested in the lecturers or materials, (2) journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v5i1.12634 m. marsely/journal of accounting and business education, 5 (1), september 2020 26 scary learning process conducted by the killer lecturers that the knowledge transfer failed, (3) students’ anxiety to ask since their questions were considered unqualified that the lecturer asked them back with successive questions, and more. thus, it is important for the lecturers to find more appropriate learning methods to overcome the above-mentioned problems. one appropriate learning model to apply in vocational education is peer tutoring learning model due to its promising approach in both fostering the students’ academic skills and positive behaviors (spilles et al., 2019). peer tutoring refers to learners’ processes for to help each other. rudland & rennie (2014) have defined peer learning as a process of a student facilitates the other students’ learning activities. in the other research, amamou & cheniti-belcadhi (2018) state that peer tutoring is a learning device in which the tutors’ task is to educate and organize themselves in teaching and then help the tutees who have got difficulties in learning. hence, professional tutors generally play a very important role in these pedagogical learning approaches. there are two peer tutoring types. first, "near-peer," is a peer tutoring type in which one learner is more knowledgeable than the other. second, "co-peer" is a peer tutoring type in which they are at the same level. near peer tutoring type more academically enable learners to work with those with difficulties. meanwhile, co-peer tutoring type describes the paired learners who work together with the same ability and gain a better understanding on the materials by learning from each other. peer tutoring leads the students to work in pairs to help each another in learning the materials or practices given as the academic tasks. peer tutoring works best when students with different levels of ability work together (rahmasari, 2017). most students learn by elaborating their views on others when implementing peer tutoring. peer tutoring enables the students to develop their skills in organizing and planning the learning activities, collaboratively working with others, giving and receiving feedbacks related to their work, and finally evaluate their own learning. ali et al. (2015) said that the students usually learn effectively through peer learning, especially when the university resources are inadequate and the demand of staff is higher. peer learning creates the opportunity for students to learn from each other by employing their own skills enabling students to have more practices than learning in traditional teaching. along with a peer tutoring assignment, the teacher can switch or make a role play, such as the tutor becomes the tutee. whenever a tutor is explaining the concept of certain materials to the tutees, it may automatically extend the tutor’s own learning. this practice gives both parties opportunities to better understanding in learning the materials being studied. in addition, the lecturers have to give trainings and supervisions to the tutors before teaching to ensure that everything works properly. so far, these practices are not only effective for face to face but also through online learning with a hybrid model (the combination of face to face and online learning through peer tutoring) as the learning media (herrera bohórquez et al., 2019). unesco and the european agency for the development of special needs education state that peer tutoring is one of the key strategies in achieving quality education and attaining the goal of inclusive education (k. topping, 2000). further, the higher education institutions have to equip the students with the twenty-first century skills, such as creativity, problem-solving, collaborative skills, critical thinking, and higher order thinking skills, in order to increase the students’ flexibility and job mobility (the united nations educational, scientific, and cultural organization known as unesco and international labor organization known as ilo). consequently, the vocational education institutions have to adopt the studentcentered instructional methods (bakare & orji, 2019). nevertheless, the vocational education teaching methods have not met the demands. the face to face teaching methods (direct methods) such as lecture, demonstration, and discussion adopted in vocational education tend to be the teacher-centered instructional methods. these teaching methods are ineffective to reach the learners’ twenty-first century and academic needs (orji & ogbuanya, 2018). hence, the need for lecturers to shift from face to face teaching methods to student-centered teaching methods is ineluctable. it is believed that peer tutoring can effectively enhance the achievement of twenty-first century skills and academic needs. peer tutoring has been practiced and researched at all educational levels and in numerous areas, such as reading, writing, mathematics, science, and in different types of school settings (special needs, general, adult). sharif et al. (2012) study the peer tutoring in language program finding that the peer tutoring program is a contributory platform for students to practice the language. they suggest that the students learn best in the student-center learning. they also m. marsely/journal of accounting and business education, 5 (1), september 2020 27 argue that the environment surrounding the teaching and learning process plays an important role in the acquisition of process and increases a meaningful language use. they appoint that peer tutoring can be a powerful support program in promoting language use among higher education institutions’ students. prince et al. (2010); britton & anderson (2010); and buzbee little (2005) give the devastating research evidence that peer tutoring is greatly beneficial for academic trainings and professional developments. k. topping (1998); schaffer et al. (1990); steele et al. (2000); and parkinson (2009) describe the benefits of peer tutoring which include the increasing cognitive development and communication (nestel & kidd, 2003). peer tutoring has also improved the tutors’ knowledge related to the handled content areas and how to teach (benware & deci, 1984). peer tutoring plays a key role in the construction of knowledge by many hands. according to western thoughts, it is found that the children’s learning will be more effective if one child teaches the other one. peer tutoring gives the students opportunities to enhance their self-management skills, and enhance their controls on learning and cooperation with others. furthermore, students are accountable to monitor and evaluate the peer performance. in addition, students can be more active during lectures and have a higher motivation during the teaching-learning processes. thus, it is believed that peer tutoring can improve the students’ ability and solve the learning problems. the national education association has particularly emphasized on the importance of critical thinking, problem solving, creativity, and innovation competencies (world economic forum, 2015). therefore, the author intends to explore the effect of peer tutoring not only on academic achievements, but also skills related to communication and collaboration. the purpose of this paper is to describe the use of peer tutor programs to enhance the students’ learning competencies and to present assessments on the programs’ effectiveness. furthermore, the author would explore the tutors’ perceptions on peer tutoring processes within the accounting management practicum courses. the first section overviews the literatures related to peer tutoring, its underlying theories, implementation principles, and benefits as well as the research questions. the context, method, and result are then explained followed by conclusion to complete the paper. to achieve the aims of this study, the following question was proposed and guided the data collection process: how are the use and the effectiveness of peer tutoring to enhance the students’ learning competencies? literature review peer tutoring concept boud (2001) defines that peer learning is not a single, undifferentiated educational strategy, yet includes a broad sweep of activities. for example, griffiths, houston & lazenbatt in boud (2001) find that there are ten different models of peer learning ranging from a traditional proctor model in which senior students tutor junior students, is students in the same year form partnerships assisting each other with both course contents and personal concerns, until a model involving discussion seminars, private study groups, parrainage (a buddy system) or counseling, peer assessment schemes, collaborative projects or laboratory works, projects in different sized (cascading) groups, workplace mentoring and community activities. sharif et al. (2012) argue that basically, peer-tutoring is a process of having peer tutors to help their tutees in any specific field where the tutees are considerably weak. peer tutoring is also perceived that peer tutors are the backups or indirect knowledge transfers from teachers to students through tutors (yaman, 2019). peer tutoring is a collaborative learning strategy in which students exchange their roles one another to be the tutors and tutees in pairs. the tutoring processes involve the students with similar learning levels to work together or students with various learning levels working together. peer tutoring is an organized collaborative learning strategy in which one student serves as the teacher or tutor, while the other one becomes the learner or tutee. tutors strengthen their own learning by reviewing and reformulating their knowledge, while tutees gain one-on-one attentions. the tutors do not need to be experts in the field that they are going to tutor but they at least must possess better proficiency than their tutees. however, peer tutoring is an instructional technique which has been successfully used among children and adults to m. marsely/journal of accounting and business education, 5 (1), september 2020 28 achieve their academic and social developmental goals. each and every teacher’s goal must be the future of their students, including high, average, and low-level learners to attain high achievement levels. beside two types of peer tutoring called near-peers and co-peers, the other types of peer tutoring are called reciprocal tutoring and class wide peer tutoring (ayvazo & aljadeff-abergel, 2019). similarly, reciprocal peer tutoring was a type of intervention which allows students to become the instructional partners for each other. the teacher serves as a moderator during the reciprocal peer tutoring. bakare & orji (2019) stated that reciprocal peer tutoring was more effective than the direct learning in improving the students’ achievements in both electronic and computer subjects. in addition, gender had a significant effect on students’ achievement, interest, and learning retention in both electronic and computer subjects. students will learn faster and better in mastering any skill when they are allowed to participate actively in the class by interacting freely with their lecturers and peers, working in groups and performing their practical projects together. one goal of reciprocal peer tutoring is to create self managed learners with high self-esteem. in some cases, reciprocal peer tutoring is more effective to reach the learning goals because it may generate larger effect sizes than same-age (co-peers) peer tutoring (leung, 2019). meanwhile, class wide peer tutoring had positive impacts on students’ social performance for three of four participants testifying the mixed effects on motor performance. social validity reports suggest the intervention carried an added value for the students, who were empowered with the responsibility given to them and the enjoyment in cooperating with a peer during the lesson tasks are assigned. in general, the students feel more comfortable and better understand the learning materials with their own friends than with their lecturers. imagine when a student shares something with the other students on how much fun a particular concert or university party was. now try to think how a professor shares the same common bond and enthusiasm was. the professor is usually unable to connect with the students due to their role and authority differences. imagine a student sharing with the other students on their excitement in making business decisions or how marketing and management are tied into accounting for sales. peer tutors offer compliments to the students’ instructions received in the traditional classroom settings. the tutors attend class, participate in the class activities, and meet the students outside of the class to build the relationships leading to more enhanced learning processes and results. the maturity of personal, social, and intellectual model is highly emphasized by the instructors for their students to achieve. kunsch et al. (2007) state that peer tutoring works best when students of different ability levels work together. the teacher changes the role of some students to become the tutors while some others become the tutored ones (tutees). this method gives the students chances to better understand the materials studied by explaining a concept to the other students helping them to remember their previous learning materials. peer tutoring is a beneficial way for students to learn from each other in the classroom. one student may well master one topic, while the other student may excel in the other topic. these two students can work together to help each other understand the difficult concepts and deepen their own knowledge on a particular subject. a tutoring program for higher education students is intended to integrate the students and enhance their personal and interpersonal development through psychological experiences in the classrooms. moreover, tutoring is also intended to support the students’ knowledge related to their institution and its operation as well as to facilitate the welcoming network creation. on the other side, peer tutoring is intended to avoid the students’ social isolation, and to support them in defining their academic goals (ragins & kram, 2007). using peer tutoring as an instructional format may improve the students’ academic achievement and social outcomes including those with disabilities (walkup-amos, 2020). researchers find that the interactions between students with disabilities and their typically developing peers are positive. through this student-centered learning design, students are more likely to develop and use their conversational skills, learn from peers with different strengths and interests as well as build the relationships with peers whom they do not typically interact with. the students with disabilities gain more opportunities to participate in social skill development goals from their individualized education programs across content areas and practices using the previously learned skills related to the services with peers. in the other perspective, students without disabilities develop meaningful friendships, increase appreciation m. marsely/journal of accounting and business education, 5 (1), september 2020 29 and acceptance to individual differences, show an increased understanding and respect for all people, and have opportunities to master new skills and contents by practicing and teaching others. regardless, peer tutoring represents one example of a structured academic design that intentionally combined responsiveness, positive feedback and structured, and well-organized classroom environments to improve student achievement. it is a simple and replicable way to address behavior and academics simultaneously. the implementation of peer tutoring changed the environment of the classroom for all students, but the exceptions were that peer tutoring was incompatible with disruptive behavior (sinclair et al., 2019; gottfried et al., 2019). teachers have to consider the elements of their own instruction that could change the classroom environment. however, peer tutoring is an effective and efficient method for providing structured, supplemental reading instruction through a class-wide delivery model in an inclusive setting (sinclair et al., 2019). peer tutoring benefits many conducted studies have criticized the effect of peer tutoring in various settings and most have found the positive results. a great study have found that peer tutoring may improve the academic achievements and cognitive functions in various areas (zeneli et al., 2015; de backer et al., 2016). peer tutoring encompasses the utilization of academically successful tutors in terms of their advance understanding on the subject matters or academic skills, and then provides learning assistance to less advanced tutees. it has been reported that peer tutoring affects the development of leadership, teaching skills. confidence, satisfaction, and learning experience (burgess et al., 2014). damon & phelps (1989) infer that peer collaboration provides opportunities for students to work and share ideas together in order to address the challenging tasks. day et al. (2007) argue that helping teachers to learn well is a meaningful way of helping students to learn. similarly, buzbee little (2005) explains that peer coaching enhances the teachers’ professional development and students’ learning since providing chances for teachers to share ideas and expertise. rudland & rennie (2014) state that the advantages of peer tutoring for tutees are mostly related to effective learning environments which shorten the distance between tutees and tutors. meanwhile, the disadvantages of peer tutoring for tutees are sometimes the information given is less accurate and exposed to the poor teaching methods. for tutors, the benefits of peer tutoring deal with the development of their self-learning and teaching skills. the disadvantages of peer tutoring for tutors are that they feel nervous when asked to teach. thus, it can be concluded that peer tutoring is a powerful 3-in-1 learning platform which encourages the development of transferable, social, and communication skills (alpay et al., 2010). some researchers find that peer tutoring is one effective way to enhance the academic achievements (zeneli et al., 2015); regulation skills (de backer et al., 2016); psychological adjustment (fantuzzo et al., 1989); and affective learning aspects, such as self-concept, self-esteem, autonomy, and aspects of conduct (miller et al., 2010). beside the above mentioned benefits, peer tutoring in language classes also makes more efficient in time and more effective in cost (sytsma et al., 2019). these programs may efficiently free the educators’ time to use for the other essential tasks and add the tutors’ self-esteem level and sense of competence. these programs may be used to help the students with difficulties in several areas (e.g. language, math, social skills) and may become the benchmarking procedures designed to work in conjunction with the goals set in these programs. in most research, peer tutoring is considered very effective, yet with exceptions. in general, tutors should be high-achievers, considered as the role models, and have the ability to lead the less-motivated tutors. hence, each peer’s personality and interaction are important for a more representative learning environment. this program usually needs cognitive challenges, such as involving simplification, clarification, and exemplification which eventually discourage the tutors and become not ready to teach. one important thing to remind is that tutors also learned the subject matter they have to teach and at the same time, they have to show their best performance during the peer tutoring process. so, tutors should make a limitation in providing the explanations for the tutees who are greatly dependent on their m. marsely/journal of accounting and business education, 5 (1), september 2020 30 understanding, background knowledge, and motivation because sometimes long explanations confuse the tutees (yaman, 2019). methods this research is a case study employing a descriptive research approach. yin & k.yin (2011) explain that qualitative research enables the researchers to conduct in-depth studies in broader topic ranges, including the everyday terms. it means that qualitative research is study about the topic arrangement which describes the naturally occurring social phenomena, involving the study the meaning of people’s lives. qualitative research takes place in natural settings. according to flick (2009), a case study may immediately capture the processes under study in great details not restricted to the intended comparability and to completely use the potential certain methods. it means that a case study is a process in understanding something unique available in a certain case. a descriptive approach was employed to explore and describe the tutors’ existing knowledge and understanding on peer tutoring. this research was conducted in three accounting management practice classes. the peer tutoring was implemented after the middle semester test. documentations, observations, and in-depth interviews were the major data collection instruments in this study. the interviews were conducted on both tutees and tutors. the tutors were the observed in this research, while the tutees’ responses during the interviews were gathered and interpreted. both tutors and tutees were the forth-year students of accounting management practice classes. results to present the research results, the researcher will first show the score differences before and after the peer tutoring implemented after the middle semester test. the results showed that peer tutoring has various benefits in learning process. from figure 1 we can see that most tutees’ academic achievements significantly improved starting from div akm – 4a those whose score was above 70 significantly improved from 18 to 28 persons after implementing the peer tutoring. meanwhile, those whose score was below 70 significantly decreased from 13 to 3 persons. thus, we might say that the peer tutoring program in this class was greatly successful. figure 1. gain scores of accounting management practices of div akm – 4a next, from the figure 2 we can see that the achievement of div akm – 4b showed that those with the score of above 70 increased from 20 to 22 persons. meanwhile, those with the score below 70 decreased from 12 to 10 persons. when compared to the previous class, this class’ achievement slightly increased. m. marsely/journal of accounting and business education, 5 (1), september 2020 31 figure 2. gain scores of accounting management practices of div akm – 4b last, from figure 3 we can see that the students of div akm – 4e who get score above 70 increased from 22 to 26 students. meanwhile, the students who get the score of below 70 decreased from 11 to 7 students. figure 3. gain scores of accounting management practices of div akm – 4e hence, this program worked best to improve the students’ academic achievement and self-esteem (leach-lópez, 2010). in accordance with the finding of research conducted by k. j. topping & foggie (2008) that tutees (students) significantly improved their academic achievement and support, while leachlópez (2010) stated that peer tutoring increased the students’ self-esteem from this program. this academic improvement was not only experienced by the tutees but also the tutors proven by the tutors’ academic achievements which always seem increasing. conversely, alegre et al. (2019) found that 13% of students decreased their academic achievement in algebra. this might be due to the fact that some students did not like to help their peers or be helped by them that the cooperative methodologies, such as peer tutoring which might improve the academic achievement decreased (sanchez et al., 2015). besides, moeyaert et al. (2019) underlined that the peer tutoring meta-analysis conducted for english or mathematics, sometimes decreased the tutees’ academic self-concept if they are not accompanied by the tutors, it may cause some of those feel insecure during the exams when they are left alone. from the observation and interview results, the researcher first pointed out the best condition for having a peer tutoring from the tutors’ points of view. the tutors said that they were very happy when requested to become the tutors starting from 7 a.m.. to 12 p.m. , but when the time showed 1 p.m. or more it m. marsely/journal of accounting and business education, 5 (1), september 2020 32 was too hard for them to teach because most tutees were tired, sleepy, and had no spirit to study that they were too lazy listening to the tutors. second is related to the tutors’ feeling when appointed to become tutors. they sometimes were afraid and nervous when explaining the materials in front of the class. this happened when feeling that they did not really master the materials. they were afraid of having no capacity to explain the materials well to the tutees and no responsibility to the lecturers who trusted them to teach. in the other hand, the tutors felt very proud when they well mastered and explained the materials to the tutees. in other words, the tutors felt satisfied and happy when they were able to help the tutees better understand the materials since the learners might better understand the materials when explained by their own friends than by the lecturers. one tutor said “i think this chance is the best moment i have been waiting for. this moment will prove the quality of my knowledge i can show to other persons. i am also very glad that i can help my friends understand the materials. he also believed that “the best scientists are those willing to share their knowledge with others”. the tutors think that in these opportunities, the lecturers might asses how deep and how far the tutors’ understanding and ability to teach. third, the benefits of peer tutoring include: (1) motivating the tutors to learn more because they have a responsibility to explain the materials to their friends; (2) improving their public speaking skills as one required soft skill when competing in various working fields; (3) increasing empathy and sympathy among peers, because the tutors felt having more responsibility to make their friends well understand the materials to help the other students in difficulties with the previously explained materials; (4) more relax and less serious learning activities. the tutors conducted the teaching and learning activities with more familiar, easier, and better to understand language and terms for the tutees. thus, the students were braver to ask more questions; (5) the tutees felt more comfortable since taught by their own friends; (6) the tutors mastered the materials better due to the responsibilities given by the lecturers; (7) tutors were highly satisfied and proud of themselves for being brave and helpful for their friends in the knowledge sharing. in addition, they felt more precious since trusted by their lecturers; (8) improving their learning spirit; (9) strengthening the relationship with the other friends since tutors should interact more with the tutees in the classrooms to improve their social skills, especially for some shy tutors; (10) practicing to naturally become more patient with some less competence students . fourth, responsibility attitudes. due to this peer tutoring, the tutors might practice and improve their responsibility skills to the others, such as to the god, themselves, trusting lecturers, other learning friends (students), and responsibility for the truth of the presented materials. discussion from the observations and interviews conducted on the tutors, they said that they were happy, proud, and satisfied when the lecturers trusted them to give the materials in front of their friends. moreover, peer tutoring might enhance their communication skills, responsibilities, patience, empathy, sympathy, and strengthening their social skills. next, this peer tutoring also motivated their willingness to study. this finding was similar with that conducted by gottfried et al. (2019) saying that peer tutoring had a positive influence on classroom learning behaviours (e.g. learning approaches , learning eagerness, and interpersonal skill level ). in the other fact, the tutees complained that the vocational education curriculum made them become experts in the field of practical science, but they did not have the presentation skills (communication skills). mostly, the students from the vocational education are lack of confidence to speak although they have well mastered the knowledge. unfortunately, this happened when the vocational education graduates have to compete with the other higher education institution graduates. they will surely loose those opportunities due to their inability to clearly express their opinions. hence, the students of vocational education have to be equipped with soft skills, i.e. communication and leadership skills through various activities, such as peer tutoring. these findings were in line with those conducted by seo & kim (2019) saying that peer tutoring had a positive influence on the students’ academic achievements, communicative, and collaborative competences. based on the second result of research conducted by k. j. topping & foggie (2008) saying m. marsely/journal of accounting and business education, 5 (1), september 2020 33 that peer tutoring might improve both personal and social development as well as motivation and opportunities to individualize instructions. ali et al. (2015) also found that peer tutoring not only benefited the students academically but also helps the students develop their communication and interpersonal skills. through peer tutoring, the students may enhance their confidence and self-motivation level. peer tutoring has two processes which are equally beneficial for both tutors and tutees. the effects of peer tutoring on both tutors and tutees were positive in the areas of learning, attitude toward the subject matter, and self confidence (rahmasari, 2017). peer tutoring enhanced self confidence and communication skills as follows: “when you teach and share with your peers, you will automatically develop yourself confidence and communications skills”. these are highly beneficial activities to be implemented when working. when the students were trained to become tutors, their learning motivation increased, personal helplessness feelings reduced, and the stigma of accepting help from others faded. seo & kim (2019) stated that peer tutoring positively and significantly influenced communication competence of both tutors and tutees. meanwhile, the effects of peer tutoring on tutors’ academic achievement and collaborative competency might be different. although the differences were not statistically significant, the impact of peer tutoring on academic achievement and responsibility for teamwork was valid only for tutees. on the other hand, the tutees’ academic achievement improved but not for the tutors. it might be defined that tutors intended to obtain benefits from their tutees’ progress, not their own. therefore, peer tutoring might not contribute to the tutors’ academic improvement. in terms of collaboration, the tutors’ expectations and responsibility did not significantly improve implying that the students with high cooperative levels preferred the tutoring program and tended to directly implement it. it can be concluded that tutees might gain more benefits from peer tutoring than the tutors do. in the contrary, field (2019) found something different when compared to this research. there was no statistical differences in academic satisfaction, motivation and learning strategies between those receiving and not receiving peer tutoring. field (2019) found that policy changes and institutional replacements might lead to the need for peer tutoring less important and the presence of a robust veteran program might exclude the need for peer tutoring. since all students have the chances to participate in and opportunities to help, peer tutoring empowers them to feel valuable and worthwhile. thus, more cooperative classroom learning spirit continuously grows. day et al. (2007) argues that helping teachers to learn may positively impact on the students’ learning. similarly, buzbee little (2005) argues that peer tutoring reinforce teachers professional development and students learning through a continuous process of sharing ideas. thus, it can be said that peer tutoring may support the strategies in a higher education institution system. peer tutoring helps the student-centered classroom. peer tutoring help the students move away from dependence on teacher to believe in their own ability to create knowledge. thus, the teacher may become the co-learner and facilitator, acting as a guide and a coach. the teacher is no longer the one with all answers in his head; except the teacher talks with the students and offers opinions, explores strategies, and helps. in peer tutoring, students should participate in active instead of passive learning. for example, when using peer tutoring, the students worked cooperatively and followed the procedures, actively asked each other questions, gave responses, corrected mistakes, and provided feedback. active learning is proven more effective to improve the students’ achievement instead of simply watching and listening to the teacher (passive learning) (gordon, 2005). from the tutees’ points of view, this peer tutoring program was very beneficial for them and the tutees felt more comfortable because they were taught by their friends that they might ask any question or difficulty to the tutors relatively in contrast when they were taught by their lecturers or even professors. conversely, the finding of research conducted by campbell (2019) explained that sometimes the tutees were lack of confidence on how to expression their questions contributed to the initial low participation. thus, their material understanding should be well improved. next, the learning activities might become more relaxing and easy for the tutees as supported with the tutors’ more familiar, easier, and better to understand language and terms used during the learning processes. sharif et al. (2012) found that narrow age gap was the main reason that the tutees could understand well to the materials explained by the tutors when compared to their teachers or lecturers. thus, the tutees felt more comfortable having peers to help m. marsely/journal of accounting and business education, 5 (1), september 2020 34 them learn the target materials. these findings have significant implications in terms of development of practical skills and competencies assisting the students’ competitiveness. the results of this study demonstrate that the peer tutors may effectively direct and enhance the tutees’ learning achievements the practical assessments. this implies that peer tutor might become a promising facilitator in improving higher communication and collaboration skills (seo & kim, 2019). conclusion it can be concluded that peer tutoring is a greatly effective learning strategy. peer tutoring has improved both tutors’ and tutees’ academic achievement, communication and collaborative skills, responsibilities, patience, empathy, sympathy, as well as strengthening the social skills both for tutees and tutors. those skills were greatly required in various life aspects that those should be utilized within the premises of educational institutions. all polytechnic students should be equipped with skills which greatly impact on the development of their careers in the future. the graduates equipped with various skills are expected to be able to perform productively in the society at any context to ensure that they would be able to function in line with the recently more complex world. beside some interesting findings on peer tutoring, this research has also some limitations. first, the results need to be defined with caution, since the research participants might not represent the higher education institutions’ students or those with different peer tutoring settings. second, the absence of control group also remains a methodological challenge and different result in this study. the author suggests for the future research to examine the impact of peer tutoring on wider but more detail and controlled settings. references alegre, f., moliner, l., maroto, a., & lorenzo-valentin, g. 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(2015). the influence of experimental design on the magnitude of the effect size -peer tutoring for elementary, middle and high school settings: a meta-analysis. international journal of educational research, 76(2015), 211–223. https://doi.org/10.1016/j.ijer.2015.11.010 a. sani/ journal of accounting and business education, 6 (1), september 2021 1 board diversity and financial performance of the nigerian listed firms: a dynamic panel analysis abdullahi sani department of accountancy, federal polytechnic bali, 05, bali, taraba state, nigeria email:abdullahisani13@yahoo.com doi: http://dx.doi.org/10.26675/jabe.v6i1.18817 abstract: the effect of board diversity on organisational performance has continued to be given attention by policymakers, non-governmental agencies, and academic communities. it has been established that boardroom diversity enhances the corporate boards’ monitoring capacity and mitigates the agency costs, which positively influences the firms’ performance. despite the advantages of constituting diverse boards, the corporate governance framework guiding the operations of such firms does not contain any specific requirement on board diversity. hence, empirical studies need to stress more on the relevance of boardroom diversity to firms’ value in the nigerian context. therefore, this paper examines the effect of board diversity on financial performance of the nigerian listed firms. the study utilised the balanced panel data of 70 firms for a period of 8 years (2012 to 2019) using a two-step system generalised method of moments (gmm) framework. this study indicates a positive and significant relationship of board gender diversity (bgd) and foreign directors (fd), with financial performance. however, the effect of ceo financial expertise on the firms’ return on assets (roa), return on equity (roe), and return on sales (ros) appear positive but insignificant. consequently, the nigerian listed firms should attach more value to constituting a smaller board size with a considerable number of female and foreign directors to maximise their performance. article history received: 22 january 2021 revised: 29 january 2021 accepted: 1 february 2021 keywords board diversity, financial performance, nigerian listed firms, dynamic panel introduction board of directors and its compositions play a vital role in firms’ internal governance because its decisions are directly related to various organisational outcomes. thus, corporate boards occupy the pinnacle position in ensuring the best corporate governance practices (gillan, 2006; jensen, 1993). one aspect of corporate governance that has recorded heating the debates and exhibiting a growing body of literature is the boardroom diversity. the effect of board diversity on organisational performance has continued to be given attention by policymakers, non-governmental agencies, and academic communities. drawing from the corporate governance theories, heterogeneity in terms of gender, nationality, and technical expertise enhances board monitoring and assists firms in accessing diverse resources (adams & ferreira, 2009; pfeffer & salancik, 2003). in particular, the board diversity as a corporate governance mechanism may control managers from embarking on inefficient investment policy and thus, limiting the scope of their underinvestment behaviour (jensen, 1986; li & zhang, 2019). in this case, improved corporate governance associated with the diversified boards may enhance the corporate disclosure and citation: sani, a. (2021). board diversity and financial performance of the nigerian listed firms: a dynamic panel analysis. journal of accounting and business education, 6(1),1-13. journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v6i1.18817 a. sani/ journal of accounting and business education, 6 (1), september 2021 2 mitigate the agency costs, which positively influences the firms’ performance (nadeem, 2020; vitolla, raimo, & rubino, 2020). interestingly, the focus of this paper is on the nigerian corporate environment because of its unique institutional structure that has a bearing on corporate governance practices. firstly, based on the ranking released in 2020 by the world bank, nigeria served as the largest economy in the african continent. it has a gross domestic product (gdp) of $448.12 billion in 2019, which placed the country ahead of south africa and egypt with an estimated gdp value of $351.432 and $303.175 billion respectively (world bank, 2020). this estimate may serve as a guide to potential investors in channelling their investable funds into the region. accordingly, nigeria may be of keen interest to these investors given that the literature has established a link between gdp growth and the inflow of foreign direct investment to the developing economies (iamsiraroj, 2016; mottaleb & kalirajan, 2010). therefore, a study of this nature may shed some light on the nigerian corporate environment. secondly, the corporate governance framework guiding companies' conduct in nigeria does not contain a clear-cut recommendation on board diversity. thus, suggesting the need for empirical studies to highlight the relevance of boardroom diversity in enhancing firms’ performance. prior literature in nigeria on this subject matter employed static estimations methods to analyse the relationship between board diversity and financial performance (ilaboya & ashafoke, 2017; ujunwa, 2012). in this context, a growing stream of the literature suggested that board diversity attributes may not be strictly exogenous variables (kilic & kuzey, 2016; wintoki, linck, & netter, 2012). this conclusion implies that endogeneity effect is embedded in the board diversity-financial performance relationship. in this way, applying the static estimation methods, such as ols and fixed effect, may yield inconsistent estimates because these techniques do not account for endogeneity (ozkan, 2001). hence, to generate more reliable results, this research exploited a generalised method of moments (gmm) framework to address this gap. consequently, the empirical analysis from this paper shows that board gender diversity (bgd) and foreign directors (fd) significantly impact on financial performance of the nigerian listed firms. the finding is robust to several measures of financial performance, such as return on assets (roa), return on equity (roe), and return on sales (ros). thus, the evidence underscores the relevance board diversity in predicting optimum performance level of the nigerian listed firms. the rest part of this article proceeds as follows: the second section contains a literature review and hypotheses development, section three presents the research methodology, section four displays the empirical results and discussions, and section five contains the concluding remarks. literature review and hypotheses theoretical framework this paper uses the agency, resource dependency, and upper echelons theories to view the nexus between firm financial performance and board diversity. in particular, the agency theory firmly stressed on the monitoring capacity of the board of directors in mitigating the potential conflicts of interests between managers and shareholders (jensen & meckling, 1976). according to the agency framework, managers who are the custodians of firm resources have the incentives to pursue their personal goals at the expense of maximising the shareholders’ wealth. in this way, corporate boards are constituted to monitor the managers' self-interest behaviour (fama & jensen, 1983). within the agency literature purview, studies have shown that female directors' monitoring capacity is commendable. board meetings attendance is one of the mechanisms that the board of directors exercises its monitoring role on firms’ policies. accordingly, adams and ferreira (2009) found that women participation in board meetings and other committee works is higher than men. by doing so, female directors are bound to monitor firms’ managers effectively. likewise, bart and mcqueen (2013) described that women practice participative leadership style and they are more prone to asking questions and debating issues. there is also an argument that corporate boards with a substantial number of females have a higher level of disclosure and minimise earning management practices (li, and zhang, 2019; nadeem, 2020). thus, the integration of a. sani/ journal of accounting and business education, 6 (1), september 2021 3 these attributes in the boardroom may lead to the prediction that a higher proportion of females on corporate boards might be associated with stringent monitoring, thereby enhancing firm performance. also, prior studies argued that foreign directors bring new perspectives and expertise to the boardroom deliberations and, consequently, shaping firms’ strategic decisions (estelyi & nisar, 2016; jeon & ryoo, 2013). accordingly, because of their cross-country experience, foreign directors are associated with diverse skills and expertise that local directors may not possess (estelyi, and nisar, 2016). similarly, these directors have a lesser connection with domestic networks and thus are more independent in discharging their board oversight functions (min, and chizema, 2015; ujunwa, 2012). their presence on board may help in reducing the information asymmetry between local firms and foreign investors. hence, international directors are expected to enrich boards’ monitoring strategy particularly if they come from countries with sound corporate governance practices (miletkov, poulsen, & wintoki, 2016). secondly, the resource dependency theory described how corporate board serves as a link that firms can utilise to draw valuable resources from the external environment (pfeffer, 1973). this framework argued that the vital function of the board of directors is to provide firms with guidance, legitimacy, and expertise to enable them to attract diverse resources for their growth and development (zahra & pearce, 1989). the theory hammers extensively on the board of directors’ networking ability which is regarded as an essential tool for deriving recognition and legitimacy to organisations (hillman & dalziel, 2003). according to singh (2007), firms can obtain legitimacy by appointing individuals with recognition and exceptional capability on their boards to secure wider acceptance and community support. the boardroom diversity provides firms with linkages to the social and human capital by developing links with different resources and enhancing their strategic decision ability (hillman, cannella, & paetzold, 2000). this is because each board member has a unique relationship and ties with the external stakeholders. in sum, the dependency theory highlighted the relevance of board composition in attracting and co-opting the external resources required by organisations to maximise their values. on the other hand, the upper echelons theory argued that top-level managers' cognitive ability and demographic attributes matter a lot in influencing the strategic decisions of an organisation (hambrick & mason, 1984). according to this perspective, a firm’s performance serves as a reflection of the cognitive power of the management team. in this regard, organisations managed by individuals with diverse educational background focus more on strategic change and are relatively more innovative (hambrick, 2007). within the context of this framework, a strand of literature emphasises that ceo financial expertise may explain the variation of firms’ strategic policies and in turn, influencing their performance. as shown by graham and harvey (2001) as well as custodio and metzger (2014), financial expert ceos due to their educational background adhere strictly to the prepositions of academic theories, thereby paving their ways to design better policies and may boost the firms’ performance. in a nutshell, the upper echelons perspective serves as the theoretical base to view how ceo cognitive aptitude determines various organisational outcome. board gender diversity and firm performance the empirical evidence on the impact of board gender on firms’ performance is mixed. some studies concluded that women have lower risk propensity and less confidence in decision making. as shown by minguez-vera and martin (2011), this risk aversion of female directors may negatively affect firms’ performance. likewise, abdullah (2014) suggested that board gender diversity leads to intra-group conflicts and a slower decision-making process, which may eventually become counter-productive to firms’ performance. on the contrary, a handful of findings demonstrated that women's potentials in firm governance should not be under-rated because of their unique attributes that have a bearing on firms’ strategic decisions. it has also been stated that the thinking pattern of women is superior, they take into account the viewpoints of different stakeholders, and thus, women are more likely to make a consistent and fair judgement when making decisions (bart & mcqueen, 2013; singh, terjesen, & vinnicombe, 2008). these peculiar features of women demonstrate that gender diversity may bring a better perspective to the board, thereby enhancing corporate board decisions. in this regard, empirical studies suggested that as female directors occupy more seats on corporate boards, the financial performance of firms rises a. sani/ journal of accounting and business education, 6 (1), september 2021 4 (ararat, aksu, & cetin, 2015; dang, houanti, reddy, & simioni, 2020; duppati, rao, matlani, scrimgeour, & patnaik, 2020; kilic & kuzey, 2016). hence, this article stated the following hypothesis: h1: board gender diversity is positively related to firms’ financial performance. foreign directors and firm performance there is an on-going argument that foreign directors' presence on corporate boards may also influence firms’ value. in this context, some studies believed that there are high agency conflicts in firms with a higher proportion of foreign directors on their boards. it is argued that international directors have less incentives to attend board meeting sequel to the geographical distance of their home country (masulis, wang, & xie, 2012; min & chizema, 2015). consequently, the geographical distance and cross-national differences may undermine the monitoring ability of the oversee directors and thus adversely affecting firms’ performance. however, estelyi and nisar (2016) observed that foreign directors could monitor managers vigorously due to their diverse knowledge and expertise. thus, international directors from the countries with robust corporate governance practice than the firm’s host country are relatively more active in monitoring managers (miletkov et al., 2016). accordingly, empirical evidence suggested that firms with many foreign board members are associated with a higher performance (fernandez-temprano & tejerinagaite, 2020; ujunwa, 2012). hence, this paper formulated the following hypothesis: h2: as the percentage of foreign directors on board increases, the firms’ financial performance rises. ceo financial expertise and firm performance according to hambrick (2007), a firm’s performance serves as a reflection of the cognitive power of its management team. thus, organisations managed by individuals with diverse educational backgrounds focus more on strategic change and are relatively innovative. within this context, many studies have attempted explaining why firms behave differently, though they operate in the same economic environment, have similar size, and face equal investment opportunities (guner, malmendier, & tate, 2008; hackbarth, 2008). these dis-similarities across firms have been attributed to the variation in managers’ cognitive power. in this regard, barney (1991) reported that the managers’ cognate experience and intelligence are vital resources that determine firms’ decision-making capacity. it is against this background that some studies revealed that ceos with finance and accounting qualification are associated with better financial management strategy and are more capable of monitoring executive directors' performance (darmadi, 2013). ceos with accounting and finance background are more likely to follow academically prescribed theories when designing their financial strategy (graham and harvey, 2001). in the same breath, the ceos with financial expertise focus on optimum capital structure level that maximises firms’ value (custodio and metzger, 2014). also, naseem, lin, rehman, ahmad, and ali (2019) argued that possession of financial education helps ceos understand firms’ financial problems, thus enabling them to act appropriately. in this way, ceos’ financial expertise enhances their ability to make better financial decisions, leading to the increased financial performance. hence, this paper formulated the following hypothesis. h3: ceo financial expertise exerts a strong positive effect on firms’ financial performance. methods data source, sampling, and description of the research variables this research generated its data from the selected firms' annual reports and accounts covering a period of 2012-2019. firms with the missing data for three consecutive periods were dropped, and the final samples comprised of 70 listed firms operating in different nigerian corporate sectors. these firms were purposely selected based on data availability. the research employed a panel data approach because it sampled 70 companies across different industries. the panel data technique minimises the estimation bias because the methodology controls for the heterogeneous nature of the elements under examination. a. sani/ journal of accounting and business education, 6 (1), september 2021 5 likewise, the panel data approach allows for more data points, which enhances the efficiency of the econometric estimates (baltagi, 2005; gujarati, 2003). in this research, financial performance serves as the dependent variable, and it is measured using the accounting-based ratios, such as return on assets (roa), return on equity (roe), and return on sales (ros). the accounting-based performance measures were chosen because they generally quantify managers' performance in enhancing firms’ value and profitability (kilic & kuzey, 2016; ujunwa, 2012). also, as the agency theory predicted, managers may likely to engage in maximising their utilities at the expense of the shareholders’ wealth (jensen & meckling, 1976). thus, according to the theory, corporate boards are set-up to ensure that firms’ managers pursue policies that can enhance the shareholders return on investment. in this way, accounting-based performance measures stand to be a more appropriate ratio in examining how boardroom diversity influences firms’ performance level. the main explanatory variables are board gender diversity (bgd), foreign directors (fd), and ceo financial expertise (ceofe). both agency and resource dependency theories suggested that a high degree of heterogeneity in boardroom promotes sound corporate governance and enhances firms' ability to draw valuable resources (fama & jensen, 1983; pfeffer & salancik, 2003). hence, this study used the number of women and foreign directors over the total number of board members to measure bgd and fd. moreover, the ceofe was quantified as a dummy variable and taking the value of 1 if a ceo possess a degree in accounting and finance, otherwise 0. this measurement stemmed from the upper echelons’ argument that ceo financial knowledge impacts the firms’ performance level (hambrick, 2007). overall, this research anticipates a positive relationship between board diversity attributes and financial performance measures. moreover, this research employed board size (bs), total debt (td), and firm size (fs) as control variables. bs is measured as the total numbers of board members. in this regard, a stream of the literature argued that larger board size suffers from poor coordination and slower decision-making process, which weakens sound corporate governance practices (pillai & al-malkawi, 2018; sani, 2020; yermack, 1996). therefore, this article expects the board size to have a negative impact on firms’ performance. also, td is calculated as the ratio of total debt over total assets, and it is equally assumed to be inversely related to firms' performance. this negative association between leverage and performance is consistent with studies emphasising that firms with higher profitability levels have less preference to debt financing because of the costs attached to the external funds (sheikh & wang, 2013; shyam-sunder & myers, 1999). in addition, fs may also explain the variation of performance across companies due to the philosophy documented in the literature that bigger firms enjoy economies of scale (altaf & shah, 2018; muniandy & hillier, 2015). therefore, this article expects a positive association between firm size and financial performance. model specification a growing stream of literature suggested that board diversity attributes may not be strictly exogenous variables (dang et al., 2020; kilic & kuzey, 2016; wintoki et al., 2012). this conclusion implies that endogeneity effect is embedded in the board diversity-financial performance relationship. in this way, applying the static estimation methods, such as ols and fixed effect may yield inconsistent estimates because they do not account for endogeneity bias (ozkan, 2001). hence, to generate more reliable results, this research exploited a generalised method of moments (gmm) framework. a gmm is a dynamic panel estimator that uses lags of the dependent variable as an instrument to deal with the endogeneity bias associated with the static estimation methods. specifically, gmm estimator is categorised into two: difference and system gmm. the difference gmm framework uses the first differencing procedure to correct the static estimators' biases and inconsistency (arellano & bond, 1991). however, simulation studies show that the difference gmm produces weak moment conditions and tends to be less efficient when applied on a series with a large panel and short time period (bun & windmeijer, 2010). as a result, the system gmm estimator was developed to take care of the limitations of the first difference estimator. a. sani/ journal of accounting and business education, 6 (1), september 2021 6 the system gmm uses the lagged differences of a dependent variable as instruments for the equation in levels. the estimator employed the moment conditions of lagged levels as instruments for the differenced equation (blundell & bond, 1998). the system gmm estimate is relatively more consistent because the framework introduces more moment conditions. thus, there are gains in precision when applied to a large panel with a short period (arellano & bover, 1995). more specifically, the system gmm has two versions:one-step and two-step. the two-step gmm framework is more robust in treating heteroscedasticity and autocorrelation because this estimator utilises the firs-step errors to construct heteroscedastic-consistent standard errors (roodman, 2009). hence, this study used the two-step gmm framework in determining the impact of board diversity on firm performance. accordingly, arellano and bond (1991) suggested some diagnostic tests to confirm the validity of gmm estimation results. these specification tests include the arellano and bond test with the null hypothesis that there is no secondorder serial correlation in the first differenced error-term. the other test is the hansen statistic which assumed that gmm instruments are uncorrelated with the error term. consequently, failure to reject the null hypotheses of these tests suggest the validity of gmm estimates. the general form of a dynamic model is given as: 𝑖𝑡 = + 𝑋𝑖𝑡 + 𝜇𝑖 + 𝜇𝑡+ 𝑖𝑡 (1) where y_it represents the dependent variable in the model for firm i in t time, y_(it-1) is the lagged dependent variable, λ is the adjustment parameter, which is a coefficient value that lies between 0 and 1, the speed of adjustment is given as (1∂), x_it is the vector of independent variables in the model, μ_(i )is the firm-specific effect, μ_t is the time effects and the error term is denoted as ε_it. by substituting the study variables into the equation (1), this research specified the following models: 𝑖𝑡 = + + + + + + 𝜇𝑖 + 𝜇𝑡 + 𝑖𝑡 (2) 𝑖𝑡 = + + + + + + 𝜇𝑖 + 𝜇𝑡 + 𝑖𝑡 (3) 𝑖𝑡 = + + + + + + 𝜇𝑖 + 𝜇𝑡 + 𝑖𝑡 (4) table 1: measurement of the research variables variable measurement dependent variables: return on assets (roa) profits before interest and taxes over total assets return on equity (roe) profits after taxes over shareholder’ capital return on sales (ros) profits after taxes over sales main explanatory variables: board gender diversity (bgd) the number of women directors divided by the board size foreign directors (fd) the number of foreign (non-nigerian) directors divided by the board size ceo financial expertise (ceofe) dummy variable, if ceo possess a degree in accounting or finance =1, otherwise 0 control variables: board size (bs) the total number of board members total debt (td) book value of total debt over book value of total assets firm size (fs) firm size, determined as the logarithms of total assets results and discussion this section presents the empirical results that this study found. the presentation starts with the descriptive analysis, as shown in table 2, followed by the correlation matrix of the research variables, which is contained in table 3. finally, the regression analysis is presented in table 4. table 2. provides summary statistics of the research variables. the variable (roa) represents the ratio of net profit before interest and taxes over total assets, and its mean value is 0.066. this result suggests that the firms’ return a. sani/ journal of accounting and business education, 6 (1), september 2021 7 on assets stood at 6.6% within the period under review. the firms’ financial performance measured by the return on equity (roe) and return on sales (ros) shows an average value of 7.9% and 0.4%, respectively. table 2: descriptive statistics roa roe ros bgd fd ceofe bs td size mean 0.066 0.079 0.004 0.139 0.181 0.257 8.495 0.236 10.127 std. dev. 0.112 0.317 0.176 0.119 0.204 0.437 2.264 0.202 0.789 min -0.207 -0.779 -0.368 0.000 0.000 0.000 4.000 0.000 8.378 max 0.377 0.856 0.279 0.600 0.833 1.000 17.000 0.770 11.917 observations 553 553 553 553 553 553 553 553 553 notes: table 2 shows the descriptive statistics of the research variables. roa is the net profit before interest and taxes divided by total assets; roe is the net profit after tax over shareholders’ fund, ros is the net income over total sales, bgd is the number of women directors over the total number of the board member, fd is the number of foreign directors divided by the total number of board members, ceofe is a dummy variable=1 when a ceo possess a degree in accounting and finance, otherwise 0, bs is the total number of board members, td is the book value of total debt divided by the book value of total assets. size is the logarithms of the total assets. given the roa, roe, and ros results, on the average, it seems that the sampled companies are not doing well in terms of financial performance. moreover, board gender diversity (bgd) and foreign directors (fd) demonstrate that 13.9% of the board members are female, and 18.1% represents foreign nationals on the companies’ board of directors. also, the variable ceofe registers a mean value of 0.257, suggesting that only 25.7% of the sampled firms’ ceos have accounting and finance qualification. overall, these board diversity measures (bgd, fd, and coefe) indicate that nigerian listed firms within a period of 2012-2019 have a less diversified board of directors regarding gender, foreign directors, and ceo financial education. additionally, the board size (bs) of the sampled firms shows an average of 9 members approximately, with a minimum of 4 members and a maximum of 17 directors. the td stands as the total debt over total assets, and it exhibits a mean of 0.236. this evidence indicates that the firms’ total debt constitutes about 23.6% of the total capital that the companies employed in financing their operations. the variable firm size (fs), which is measured as the logarithms of the firms’ total assets reveals a smaller deviation across the firms, with a minimum and maximum ratio of respectively 8.378 and 11.917. table 3: correlation matrix roa roe ros bgd fd ceofe bs td size roa 1.00 roe 0.51*** 1.00 ros 0.73*** 0.43*** 1.00 bgd 0.15*** 0.09** 0.09** 1.00 fd 0.21*** 0.09** 0.18*** -0.21*** 1.00 ceofe 0.01 0.02 0.03 0.03 -0.19*** 1.00 bs 0.05 -0.01 0.19*** -0.05 0.22*** -0.07 1.00 td -0.28*** -0.26*** -0.38*** -0.02 0.02 0.03 -0.10 1.00 size 0.24*** 0.13*** 0.25*** 0.14*** 0.34*** -0.05 0.43** 0.01 1.00 *** and ** indicate 1%, and 5% level of significance notes: roa is the net profit before interest and taxes divided by total assets. roe is the net profit after tax over shareholders’ fund. bgd is the number of women directors over the total number of board members. fd is the number of foreign directors divided by the total number of board members. ceofe is a dummy variable=1 when a ceo possess a degree in accounting and finance, otherwise 0. bs is the total number of board members. td is the book value of total debt divided by the book value of total assets. size is the logarithms of the total assets. furthermore, table 3 contains the correlation results among the research variables. based on the results, the correlation coefficient across the explanatory variable is not high. the highest association that the correlation matrix exhibits is between firm size and board size with a coefficient of 43%, which is far a. sani/ journal of accounting and business education, 6 (1), september 2021 8 less than the 80% threshold that baltagi (2005) suggested. hence, the multicollinearity problem does not exist in our model specification. table 4: two-step system gmm regression results variable model 2 (roa) model 3 (roe) model 4 (ros) roait-1 0.4150*** (0.3334) roeit-1 0.3094*** (0.0184) rosit-1 0.6001*** (0.0273) bgd 0.0727* (0.0396) 0.0905 (0.0712) 0.07335*** (0.0258) fd 0.0417** (0.0195) 0.0807* (0.0417) 0.0420*** (0.0204) ceofe 0.0020 (0.0083) 0.0169 (0.0159) 0.0069 (0.0107) bs -0.0034** (0.0016) -0.0076* (0.0041) 0.0071 (0.0067) td -0.0787** (0.1691) -0.0015** (0.0061) -0.1123*** (0.0204) size 0.0155*** (0.0038) 0.0374*** (0.0121) 0.0140*** (0.0047) hansen statistics (p-value) 0.202 0.167 0.396 ar1 (p-value) 0.003 0.000 0.002 ar2 (p-value) 0.499 0.595 0.170 wald statistics (p-value) 0.000 0.000 0.000 year dummies yes yes yes industry dummies yes yes yes number of groups 70 70 70 number of instruments 40 40 40 ***, ** & * indicate 1%, 5% and 10% level of significance. the numbers in parenthesis are standard errors robust to heteroscedasticity. this table presents the estimates on the relationship between board diversity and financial performance of the 70 nigerian listed companies. the analysed data covered a period from 2012-2019. notes: roa is the net profit before interest and taxes divided by total assets. roe is the net profit after tax over shareholders’ fund. bgd is the number of women directors over the total number of board members. fd is the number of foreign directors divided by the total number of board members. ceofe is a dummy variable=1 when a ceo possess a degree in accounting and finance, otherwise 0. bs is the total number of board members. td is the book value of total debt divided by the book value of total assets. size is the logarithms of the total assets. table 4 exhibits the two-step system gmm regression results on the effect of board diversity on the financial performance of nigerian listed firms. according to the results, this study's estimations fulfil the underlying conditions of valid gmm specification. accordingly, the hansen statistics’ p-value appears insignificant in all the models, indicating that the gmm estimates at hand are robust. therefore, this article fails to reject the null hypothesis of instruments validity. likewise, the evidence demonstrates that ar2 exhibits an insignificant p-value in all the models for roa, roe, and ros. this signifies the absence of second-order serial correlation in the models that this research specified. the wald statistics also reveal the joint significance of the explanatory variables in predicting the firms’ financial performance. more importantly, the lagged dependent variables in all the models’ specifications show positive and significant p-values at the 1% level. this finding illustrates that past values of roa, roe, a. sani/ journal of accounting and business education, 6 (1), september 2021 9 and ros are important explanatory variables in estimating the dynamic relationship between board diversity and financial performance of the nigerian listed companies. moreover, based on the regression results, the board gender diversity (bgd) indicates a positive and significant coefficient in its association with roa and ros but insignificant with roe. this strong positive effect implies that the presence of female directors on the boards of the nigerian listed firms increases the financial performance of the firms measured by roa and ros. thus, reinforcing the argument that gender diversity helps connect firms with social and human capital, enhances their strategic decisions, thus, leading to a higher performance level (ararat et al., 2015; dang et al., 2020; duppati et al., 2020). therefore, based on this result, the research fails to reject h1. similarly, the coefficients of the foreign directors (fd) reveal positive and significant impact on firm performance in all the models. this evidence suggests the nigerian listed firms with a substantial number of foreign nationals are associated with the increased financial performance. hence, the results align with the predictions of agency and resource dependency theories that boardroom diversity brings new perspective and expertise and thereby shaping firms’ performance (estelyi & nisar, 2016; miletkov et al., 2016; ujunwa, 2012). hence, this study fails to reject h2. on the contrary, the estimated regression results show that ceo financial expertise (ceofe) demonstrates an insignificant coefficient in all the models that this study specified. this finding suggests ceos’ financial knowledge may not necessarily result in attaining an optimum firm value of the nigerian listed firms. thus, demonstrating the importance of other board members acquires financial knowledge for the firms to operate at an optimum financial performance level. hence, this paper rejects h3. instead, this empirical evidence reinforces the proposition of upper-echelons theory that the managers' collective cognitive powers and experiences more often results in better organisational outcomes (hambrick, 2007; hambrick, and mason, 1984). furthermore, the control variables that this study employed display signs consistent with the existing studies. the variable board size (bs) shows a negative and significant relationship with roa and roe respectively at 5% and 10%. this finding implies larger board size reduces the performance of the nigerian listed firms. this empirical evidence supports the argument that oversize boards suffer from poor coordination, conflicts, and disagreements among board members, which in turn, leading to poor performance (pillai & al-malkawi, 2018; yermack, 1996). also, the firms’ leverage ratio (td) exhibits a negative and significant effect on specification of all the models. this strong estimated negative effect is consistent with shyam-sunder and myers (1999) and sheikh and wang (2013). these studies reported that profitable firms have less preference for debt capital and thus leverage decreases, as firms’ profitability rises. lastly, the firm size shows positive and significant coefficient in predicting roa, roe, and ros. the results demonstrate the relevance of larger size in explaining the profitability variation of the sampled firms. this empirical result agrees with the literature emphasising that economies of scale advantage accrue to larger firms, resulting in a lower production cost and eventually improving financial performance (altaf & shah, 2018; muniandy & hillier, 2015). conclusion this paper examined the impact of board diversity on financial performance of the nigerian listed firms. the study utilised the balanced panel data of 70 firms in a period of 2012-2019 using a generalised method of moments (gmm) framework. the article viewed the nexus between boardroom diversity and firms’ financial performance within the context of the agency theory, resource dependency, and upperechelons perspectives. the study found that board gender diversity and foreign directors have a positive and significant impact on financial performance. thus, the evidence underscores the relevance board diversity in predicting the nigerian listed companies' optimum performance level. the paper also showed that board size, leverage, and firm size might also explain the variation of profitability across the nigerian firms. more importantly, the findings from this research have some policy implications on enhancing the firms’ performance level. firstly, the nigerian listed firms should focus on constituting a smaller board size with a considerable number of female and foreign directors to maximise their value. likewise, as shown by the results in this study, ceo financial expertise alone may not necessarily lead to optimising firm value. therefore, it is imperative for the sampled companies to employ a higher number of board a. sani/ journal of accounting and business education, 6 (1), september 2021 10 members with financial expertise to maximise financial performance. although this paper provides further insights on corporate governance literature, yet it has some limitations. the research covered only three aspects of board diversity measures. therefore, future studies should explore other proxies for measuring board diversity to provide more evidence on the determinants of firms’ financial performance. references abdullah, 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(1989). boards of directors and corporate financial performance: a review and integrative model. journal of management, 15(2), 291–334. https://doi.org/10.1177/014920638901500208 http://dx.doi.org/10.6007/ijarafms/v10-i3/7821 a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 25 vba (visual basic for applications) based learning media development in accounting practice learning agfia fauziatul ulfa1 nujmatul laily2 1,2 accounting department, faculty of economics and business, universitas negeri malang, indonesia email: agfia_fauziatul@gmail.com doi: http://dx.doi.org/10.26675/jabe.v7i2.37125 abstract: this research aims to produce learning media products based on excel vba (visual basic for applications) in accounting practice learning. this research used the r&d method with the addie model, namely: analyze, design, develop, implement, and evaluate. the subjects in this research were grade xi financial and institutional accounting students at smk negeri 2 kediri. the results showed that the excel vba-based learning media showed the media’s feasibility with validation test results by media expert of 100% and material expert of 90.87% and feasible category. in addition, the results of validation test on field practitioners (teachers) and students showed practicality and feasibility of the application of 98.61% and 93.25% respectively for accounting practice learning in accounting vocational schools. therefore, the presence of excel vba application as a learning medium developed is very effective and suitable for use in accounting vocational schools. article history received: 1 january 2023 revised: 1 march 2023 accepted: 31 march 2023 keywords excel vba, learning media, accounting practice citation: ulfa, a.f., & laily, n. (2023). vba (visual basic for applications) based learning media development in accounting practie learning. journal of accounting and business education, 7(2),25-40 introduction technology is the most important part in the development of an era (willis, 2016). technology has facilitated humans in creating tools with certain designs and purposes (jablansky et al., 2019). technology development is part of science that needs to be developed for changes in various sectors, including education sector. education sector can make use of technology to reform paradigm in education (peñaayala, 2021; priangga, 2021), one of which is through creating more educative, effective and creative learning media (pambudi et al., 2018). in addition, technology revolution has brought big changes to teaching practice. as explained by saputro and saputra (2015), technology development has led to changes on learning media from conventional to digital. the changes resulting from technology development certainly have big impact on teachers, in which a teacher is demanded to be capable of adopting the changes into learning system (suryani, 2020). technology development allows teachers to have high involvement level in learning process (alajmi, 2022). a teacher is also demanded to understand the developing technology products and systems (wijaya et al., 2016), and is then required to be adaptable to the learning system. besides, teachers should have journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v7i2.37125 a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 26 digital ability needed in handling important technology development for connectivity (antonietti et al., 2022). technology development will help teacher create more creative and innovative learning system. thus, teachers need to transfer their academic knowledge that should be learned in technology learning field that is considered too complicated by some people (alajmi, 2022). as explained by djaja (2016), herliandry et al. (2020), and manasikana & listiadi (2017), a teacher can make use of technology to create more creative learning process, as supported by wijaya et al. (2016), stating that technology development will influence the quantity of learning media variations. lee et al. (2018) and badua et al. (2011) state that the rate of technology development in education sector is in line with the rate of innovation. however, innovation resulting from technology development evidently does not occur simultaneously in the whole fields of education sector. one of educational fields that still needs innovation is accounting education, especially in accounting practice learning. accounting practice one of accounting subjects that provides student direct and comprehensive practice on how to settle accounting cases (ardiansyah, 2020). lack of innovation in accounting practice learning has been explained by rosani and susanti (2017), in which the implementation of accounting practice learning in vocational high school (smk) has not operated optimally due to lack of practice materials such as accommodating module, lks (student worksheet), and practice learning media. this causes accounting practice learning in smk to remain using manual bookkeeping using printed worksheet (yana, 2017). in addition, teachers also still apply the existing conventional learning model to accounting practice without realizing that students have different characteristics and abilities. meanwhile, a number of studies show that the trigger that may attract stakeholders’ attention is the quality of a company’s financial statements (achilli et al., 2022). apart from this, manual bookkeeping is the basic competence that needs to be achieved in accounting practice learning. upon achieved basic competence, problems arise in manual accounting practice learning. the problems arising in accounting practice learning process eventually cause student to find it difficult to do manual bookkeeping practice, including time consuming, lack of writing orderliness, large quantity of paper used, and teacher’s difficulty in correcting and scoring student’s answers (yana, 2017). one of the causes of these problems is non-maximal use of technology in accounting practice learning. lee et al. (2018) and olusegun (2016) confirm that (software) technology development plays an important role in accounting since it facilitates accounting cases processing and analysis, rendering them more effective and efficient. this shows that innovative learning media are needed as a supplement upon achieved basic competence in accounting practice learning, one of which is multimedia application based learning media (kybartaite et al., 2008; puspitarini and hanif, 2019; yamamoto, 2014). abdulrahaman et al. (2020) and vagg et al. (2020) reveal that multimedia application is evidently effective in learning process since it may stimulate learning interest and improve learning experience, and facilitate teacher in identifying student’s learning position. studies that develop vba based learning media on microsoft powerpoint show valid results worth use, since interactive learning media can identify picture forming using thin lens and application in some optical devices through simple simulation (novita et al., 2016). excel vba (visual basic for application) in notarial office’s financial statements evidently facilitates administrative staff’s work in their reporting (rachmaniah et al., 2022). the success in excel vba (visual basic for application) learning media is evidently effective in simple harmonic oscillator potential learning showing that student’s mastery is higher than learning without using media (nurhayari, 2015). the performance of excel vba based learning media is evidently practical for use in physics learning in vocational high school (smk) (safitri et al., 2020). based on the results and role of microsoft office vba in school learning, it reopens the opportunity for the researcher to innovate as supplement to learning media in accounting education sector. this research focuses on innovating as supplement to multimedia application-based learning media in the form of microsoft excel visual basic for applications (excel vba) in accounting practice learning. the difference in the learning media lies on its programming language of excel vba that is a derivative of vba from microsoft office designed to work on excel application (madcoms, 2017). vba not exists on microsoft excel, but also on the other office programs (novita et al., 2016). therefore, the existence of excel vba based learning media innovation as supplement will present solution to accounting practice learning in processing accounting data more easily and effectively. in addition, excel vba based learning a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 27 media have the advantage that they are observable from vba programming outcome, including initial display and log display in application that are designed to distinguish a student’s work from other student’s work, availability of sheet containing exercises on accounting cases that can be controlled by teacher, attractively designed accounting worksheet, and learning media being designed to automatically display score graphics. excel vba learning media can be accessed via laptop and computer without internet network. use of excel vba based learning media is expected to improve student’s abilities and skills in settling various accounting cases on the basis of technology. as stated by bernard and senjayawati (2019), using excel vba, student will complete financial statements arranging process more easily. in addition, the advantage of excel vba based learning media can facilitate teacher in scoring student’s work automatically. as explained by alajmi (2022), the aid of excel vba (technology) can alleviate the workload teacher should assume. this minimizes miscalculation and improves credible scoring on student’s works (suryani, 2020). literature review symbol systems theory initiated by g. salomon (1977), the symbol systems theory explains the impacts of media designed on learning. each of learning media has the ability of delivering their content through symbols used and learning media are said effective depending on their compatibility with student, assignment, and media content. according to salomon (1977), media symbol system will influence student’s acquired knowledge. fritz (1952) explains that symbol is the realization of shape, image, motion, and sound that represent an idea. symbol is also defined as real item, such as color and pattern. the symbol systems theory reveals that excel vba based learning media in accounting practice learning is expected to present efficiency and effectiveness in learning process. besides, it is also to examine the reciprocal process between excel vba application and user. learning media media are the form of intermediary of delivery of information, thinking, idea, or material delivered to receiver (baharuddin & anggraini, 2021). in the education world, media are physical instrument used by student in learning process by stimulating a message in learning in order to increase the efficiency and effectiveness of achieving a purpose (arsyad, 2014; menrisal & putri, 2018). learning, meanwhile, is the process of interaction between teacher and student, either in class out of class, using various existing sources of learning (prasetyo, 2017). learning media are an instrument serving to deliver and explain learning message by stimulating student’s attention, thinking, feeling and interest in learning activity (astuti et al., 2017; daryanto, 2016; sanaky and faizah, 2013; tafonao, 2018). learning media have positive impact on learning process, facilitating teacher and serving as visual aid to deliver learning information with interesting stimulus in teaching-learning process (peprizal and syah, 2020; putra, 2021). media in education world serve as the facilities to achieve learning process purpose. the functions of learning media are explained by arsyad (2014), including: (1) attention function: media serving to attract student’s attention in concentration; (2) affective function: this can be viewed from how student enjoys learning using text with image; (3) cognitive function: it aims to accelerate student’s understanding given that information is delivered using visual symbol or images; and (4) compensatory function: it gives an understanding to student who is weak in reading in the context of text understanding. in addition, learning media are also aimed to facilitate student in understanding learning materials with more clarity and be a visual aid for teacher in facilitating and improving student’s concentration during learning process (astuti et al., 2017; bernard & senjayawati, 2019). accounting practice subject accounting is derived from the term account. accounting is one branch of economics on financial reporting that is greatly needed in working world (mardetini et al., 2018). accounting can be learned through practice (saputri & susilowibowo, 2020). the definition of accounting according to the american a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 28 accounting association is the process of identification, recording, and reporting of economic information so as to help decision making for information user (arifiyani & susanti, 2021). accounting science can be found in accounting expertise program, including smk (vocational high school) (nurwandini & susilowibowo, 2020; saputri & susilowibowo, 2020). hard skill and soft skill are the combination of sciences prepared in vocational education and are later expected to generate highly competitive human resource (s. rahmawati & susanti, 2019). one of the subjects to support expertise prospect in accounting is accounting practice subject. according to sapruwan (2017), practice is the process of teacher’s invitation for student to prove the theories taught in real life. accounting practice learning can improve student’s cognitive, psychomotor and affective abilities in financial reporting on a company’s transaction (prastowo, 2011; yana, 2017). through accounting practice, student will be taught directly on how to report transactional evidences in a company into financial statements. excel visual basic for applications (vba) microsoft excel is a spreadsheet program aiming to facilitate user in inputting data and has been used by numerous big businessmen (besacier, 2011; madcoms, 2017). in accounting, microsoft excel also has important features in support of accounting education (beaman et al., 2005). microsoft excel has been developed as computerized simulation from paper based worksheet accounting as a strategy in generating accurate and trusted financial statements (jusoh & ahmad, 2019; olusegun, 2016). lee et al. (2018) explain that microsoft excel is software often used in working world and must be applied in accounting education. the advantage of using microsoft excel in accounting education has been proven by rachmawati (2017), that using microsoft excel as financial reporting media in accounting education shows better learning outcome than using manual financial reporting media. ict (information and communication technology) learning media greatly influences learning process, both in class and out of class. ict learning media development in trigonometric learning shows student’s improved achievement (suryadi, 2017). this result is in line with the research conducted by astuti et al. (2017) that learning media for android based physics mobile learning are worthy of use in physics learning process. the success in ict based learning media making is confirmed by the research conducted by meidyanti et al. (2021), in which smartphone (apk) media are also suitable for use as learning media for special journal material in accounting. besides, application based learning media development for accounting education quiz improves student’s learning interest effectively than text book learning (d. rahmawati et al., 2016). one of the programming languages that microsoft excel has is visual basic for application (oktaviani & dewi, 2020). visual basic for application (hereinafter vba) is the development of windows on microsoft office program that may help user automate work and save time (david, 2019; madcoms, 2017; madcoms, 2014). therefore, the presence of visual basic for application can facilitate data accounting making and processing by making use of facilities and functions in microsoft excel (bernard, 2018). a number of studies show that microsoft excel learning media are effective in learning process, one of which is the research conducted by ihsan and yuniati (2021) showing that microsoft excel effective and worthy of use in introduction to accounting subject since it presents optimal learning outcome and has good influence on student’s self-efficacy. in addition, suryani (2020) also reveals that microsoft excel is also designed in online accounting exam to reduce student’s cheating and facilitate teacher’s scoring with design as attractive as possible. besides, the effectiveness of use of microsoft excel vba has been proven by the research conducted by bernard (2018), in which mathematic student’s creative ability will be better when excel vba media are used than without using media through a problem posing approach. additionally, vba based learning media also have its success in smp pgri, influencing student’s reasoning through vba for powerpoint and excel development (rohaeti et al., 2019). also, excel vba based learning media also help teacher give interactive description of mathematic materials and serve as teacher’s visual aid in practical and efficient learning (bernard & senjayawati, 2019). excel vba can also be an application program to calculate insurance premium accurately (nuryanto et al., 2012). as revealed in the research conducted by sukmawan and utomo (2018), using a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 29 excel vba can predict more accurately sales by cv agro industri malang that is facilitates user operating excel vba application for sale database. in addition, excel vba is time saving and facilitates corporate working system fast (siregar, 2019). this is confirmed by jacobs et al. (2016) certifying that excel is an effective application of choice in support of managerial decision in a company and excel has more complex abilities in data analysis efficiency (ragland & ramachandran, 2014). excel (spreadsheet) that evidently performs effectively, user friendly and fast has been chosen as spectroscopic tool and chromatographic data handling tool (vieira et al., 2019). the aim of this research is to develop excel vba based media as supplement to accounting practice learning. the researcher’s reason of supplementing media development is since the media can process data more easily and effectively, produce digital worksheet using programming in excel vba, help student settle accounting cases to be processed into financial statements easily, and improve student’s ability in using (computer) technology for accounting practice. this is confirmed by hasana & maharany (2017) that the presence of vba makes attractive and innovative display in microsoft excel. this facilitates excel vba application users (astuti & bhakti, 2018). in addition, through excel vba based learning media, teacher can control any exercise given to student, facilitating teacher correcting student’s work automatically. the presence of excel vba based learning media is expected to help teacher maximally achieve the goal of efficient and efficient learning. methods this research used research and development (r&d) method. research and development is a research method to generate certain product and test its effectiveness (sugiyono, 2014). this research focused on application software development to produce product in the form of excel visual basic for applications (vba) based learning media in accounting practice learning. this research used the addie development model developed by dick and carey (1996) of (analyze, design, develop, implement, evaluate). figure 1. addie model’s research and development stages (branch, 2009) the research and development stages in addie model could be divided into: (1) analyze, in which main problem was determined initially, that was problem faced in accounting practice learning process at smk n 2 kediri by analyzing previous learning media to determine the learning media development needed. (2) design, as a stage of planning a development product to apply needs analysis results. the planning covered initial design of media to be developed, arranging questions and answers exercise, arranging scoring design, and buttons in application making. (3) develop, as the media development stage covering making of excel vba application and validation test by material and media expert using questionnaire made available by researcher. (4) implement, a stage where product was applied to smk accounting student to examining to what extent the application product’s effectiveness in learning process. the subject of in the experiment class was grade xi institutional accounting and finance 1 students of analyze design developimplement evaluate a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 30 smk n 2 kediri. in addition, in this experiment the researcher distributed questionnaire to the students to measure and examine their opinion of excel vba based learning media. (5) evaluate, where product tested was experimented on the students would be scored based on the questionnaire given to measure the developed product’s effectiveness and efficiency. the excel vba based learning media would be developed through two stages of validation, including: stage (1) validation by media expert and material expert, stage (2) validation by field practitioners at smk. quantitative and qualitative data were collected at the validation stages. validation by media expert and material expert used percentage data with the following validation criteria (arikunto, 2010). 𝑆𝑐𝑜𝑟𝑒 𝑃𝑟𝑒𝑐𝑒𝑛𝑡𝑎𝑔𝑒 (𝑃) = ∑ 𝑎𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑠𝑐𝑜𝑟𝑒 𝑄𝑢𝑎𝑛𝑡𝑖𝑡𝑦 𝑜𝑓 𝑞𝑢𝑒𝑠𝑡𝑖𝑜𝑛𝑠 (𝑛) 𝑋100% , 𝑁𝐴 = ∑ 𝑃 𝑛 table 1. feasibility criteria for validation by media expert and material expert percentage interpretation description 76-100 valid feasible/no revision 50-25 fairly valid fairly feasible/partial revision 26-50 poorly valid poorly feasible/partial revision <25 invalid unfeasible/total revision in addition, table 2 shows the validation criteria from field practitioners at smk for the development of excel vba based learning media as follows. table 2. feasibility criteria for validation by field practitioner percentage interpretation description 76-100 practical practical/no revision 50-25 fairly practical fairly practical/partial revision 26-50 poorly practical poorly practical/partial revision <25 non-practical non-practical/total revision results and discussion the results of research and development using the addie model show that the excel vba learning media are fairly feasible for development, especially in accounting practice learning. the series of stages in this development include: (1) problem analysis conducted through observation and interview with teachers of smk n 2 kediri showed student’s difficulty in accounting practice learning process due to manual bookkeeping and the completion process was time consuming. in addition, the covid-19 pandemic posed some difficulty to print worksheet of financial statements and to teacher to give exercise in printed form. therefore, with the problems arising in the field, innovation is a necessity for learning media by making use of computer technology as the main device in accounting practice learning. this is based on student’s friendliness with the currently developing technology. (2) product designing, in which with the problems arising in the school environment, especially in institutional financial accounting class at smk, the researcher designed software to be effectively used in accounting practice learning. in this stage, the researcher made the application design using adobe photoshop and adobe illustrator. the application design was made starting from welcome display, log in, dashboard, buttons in the application and worksheet of financial statements in png and jpg formats. additionally, the researcher collected materials that were compatible with the prevailing curriculum to develop and design the application. as a result, innovation arose to design excel vba based learning media in accounting practice learning. (3) product development, conducted by making components of the application and application instruction manual aiming to facilitate student in financial statements preparing process. in this development stage, the researcher combined the application designs made in microsoft excel and programmed them using visual basic for application. a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 31 thus, the vba based application was in the form of excel vba, in which the files would be delivered to students in the form of google drive link or through whatsapp group. below is the display of excel vba based application: figure 2. welcome display figure 2 is the welcome display of vba for excel in which user is presented with two choices, student and teacher, thus each user can only press one button as per their role, where teacher can press the “guru” button and student can press the “siswa” button. figure 3. login page display figure 3 is the login page display of vba for excel, where there is different display between student and teacher. for student, when login they must fill in their personal data including “nama” and “absen” aiming for identification by teacher for scoring. for teacher, login requires “username” and “password” that have been made available in the application to identify student’s work and score. figure 4. login failure display in case user inputs non-corresponding data to login, the system will reject login, as shown in figure 4. a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 32 figure 5. dashboard display figure 6. transaction bank display figure 5 is the dashboard display composed of user identity and menus in the application covering: (a) transaction bank/transaction input menu, containing information of company, list of accounts, initial balance sheet, information of customer & supplier, and transaction evidences in reporting month (figure 6); (b) menu of how to use the application, containing how to use application during pre-operation; (c) logout menu, which is feature to close the application when user has finished using it. in this feature, data will be saved automatically; and (d) accounting cycle menu composed of (1) general journal; (2) general ledger; (3) balance sheet; (4) adjustment journal; (5) worksheet; (6) financial statements; (7) closing journal; and (8) balance upon closure (figure 7). what differentiates dashboard displays for student and teacher is the “grafik nilai siswa” menu that can only be accessed from teacher’s dashboard. figure 7. workbook display a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 33 figure 8. student score graphic display figure 8 is the student score graphic menu containing student’s submitted works. this menu will facilitate teacher in correcting student’s answer one by one in printed form. additionally, in the third stage of product development, the researcher tested product validation for feasibility and quality of the excel vba based learning media. table 3 is the result of the validation test: table 3. result of validation scoring by media expert no scoring indicator ∑p percentage (%) category 1 display aspect 36 100 feasible 2 programming aspect 28 100 feasible total score 64 np (%) 100.00 source: processed primary data (2022) validation process was conducted by it expert, a lecturer of education technology, faculty of education science, universitas negeri malang. media validity was measured from the scoring by media expert (table 3), in which the media developed has advantages in the following two aspects: (a) application display aspect has interesting design from suitable combination of colors, images, layout, kind and size of font, and consistent placement of application buttons. in addition, the it also gave suggestion to add image background into each student’s worksheet. this aimed to attract student’s attention to using the application and student would not be bored using the application during accounting practice learning process. (b) programming aspect is easy to use due to the clear use application instruction manual. therefore, in view of the validation learning media test result in table 3, the percentage is 100% and it is declared that the excel vba based learning media are valid and feasible to be applied to vocational high school (smk). as an it expert, besides testing the feasibility of excel vba based learning media in accounting practice, also gave oral suggestion to the researcher that excel vba based learning media would be more attractive when transparent images were added to financial statements worksheet and to add video link of how to use application in every sheet of excel vba for a duration of about 3 minutes. in his opinion, additional transparent image accent and usage instruction via video would give student some impression with which they would be facilitated in receiving information and would not be bored during learning process. this is confirmed by sukiyasa & sukoco (2013) that learning material made either in in the form fo attractive image or video would facilitate student understanding and receiving information. validation of material expert shows that the exercise in the excel vba based learning media are valid since they have the following advantages: (a) exercise conforms to the competence and goals to be achieved; (b) variation and level of exercise presentation are fairly compatible, in which the exercises presented are relatively varied that give student thinking practice and skill in accounting case solving; (c) discussion or answers presented in excel vba are clear, facilitating teacher in automatic scoring process with the learning media. additionally, the answers in the learning media are accessible only for teacher. the practicality is categorized as valid (in conformity) since the result of question based on three aspects has percentage of 90.97% as explained in table 4. however, before experiment with the accounting students, a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 34 suggestion was given by the material expert to the researcher to adjust the exercise made to student’s ability at smk n 2 kediri and to choose the accounting accounts taught in smk n 2 kediri, which were accounting account in indonesian language. table 4. result of validation scoring by material expert no scoring indicator ∑p percentage (%) category 1 exercise presentation compatibility aspect 11 91.67 feasible 2 variation and level of exercise presentation aspect 13 81.25 feasible 3 exercise discussion clarity aspect 12 100 feasible total score 36 np (%) 90.97 source: processed primary data (2022) validation by field practitioner shows that the learning media’s practicality can be scored by the excel vba based learning media’s ease of use in accounting practice learning process. the validation result can be viewed from the following three aspects: (a) exercise given to student conforms to the expectation for honing student’s competence in accounting sector in accounting practice learning; (b) from the perspectives of student’s activeness in class, level of exercise and learning media given, they can encourage student to build their case analyzing knowledge, critical thinking and skill in financial reporting; (c) excel vba based learning media can facilitate student in financial reporting process. with the excel vba based learning media, student cheating will be reduced and teacher will be facilitated in scoring process. additionally, computerized learning media innovation also has its weakness in its use, that not all students have computer or laptop as the mandatory instrument for learning media, thus the learning media are accessible at school laboratory. however, she also gave suggestion that the learning media should be accessible via smartphone since it is certain that all students have this sophisticated device. therefore, the media are categorized as practical since the question based on three aspects has percentage of 97.23% as explained in table 5. after validation test by media expert and material expert, the product was experimented on students (user group). (4) experiment of excel vba based learning media was conducted on 31 grade xi financial and institutional accounting 1 (akl 1) students in smk negeri 2 kediri in accounting practice subject at tik laboratory of smk negeri 2 kediri. the learning media experiment was conducted after learning media and teaching materials were revised by the experts. experiment was conducted by giving service company cases to be processed into it based financial statements. given accounting practice is one of the subjects giving student skill in transactional evidences reporting process in a company in the form of financial statements that will later be beneficial and useful in the working world, this will generate competent smk graduates. table 5. result of validation scoring by field practitioner no scoring indicator ∑p percentage (%) category 1 exercise presentation compatibility aspect 11 91.67 practical 2 variation and level of exercise presentation aspect 24 100 practical 3 interactivity aspect 8 100 practical total score 43 np (%) 97.23 source: processed primary data (2022) a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 35 table 6. student’s practicability result no scoring indicator ∑p percentage (%) category 1 exercise compatibility presentation aspect 466 93.95 practical 2 display aspect 683 91.80 practical 3 use and benefit aspect 816 94.01 practical total score 1965 np (%) 93.25 source: processed primary data (2022) (5) evaluation on excel vba based learning media experiment on student shows that excel vba learning media are feasible and practical to be applied to in accounting practice learning. in general, excel vba based learning media have the following advantages: (a) attractive application display; (b) selecting appropriate color and font; (c) selecting and placing consistent buttons; (d) easy-to-understand instruction manual; (e) orderly arranged worksheet; (f) easy data input process; and (g) varied exercises. therefore, the whole evaluation on student is scored 93.25%, which is categorized as feasible for the excel vba based learning media to be applied to smk accounting (table 6). effectiveness of the developed model assessing the effectiveness of the developed model was carried out using paired sample test analysis of the pre-test and post-test values in the experimental class. before conducting the test for differences, the normality test was implemented to uncover whether the data was normally distributed or not. normality test the results of the normality test using the shapiro-wilk test on pretest scores (manual bookkeeping of accounting cycle) and posttest (bookkeeping of accounting cycles based on excel vba) are shown in the following table. table 7. normality test data significant value of shapiro-wilk test results pretest ,543 posttest ,008 the data is normally distributed if the significance value is > 0.05 for the pretest and posttest data. this shows that in table 7 the pretest significance score is > 0.05 and the posttest significance score is <0.05. based on these results, it can be concluded that the data is not normally distributed. in addition to the results of the data analysis being distributed abnormally, it cannot be done with the parametric test using the t test. this moves the difference test analysis being diverted to using a non-parametric test, namely the wilcoxon test which aims to compare two conditions when the same student participates in each condition and the data not normally distributed. the results are as shown in the following table. table 8. wilcoxon test rank n mean rank sum of ranks pre-test – post-test negative ranks 0a ,00 ,00 positive ranks 31b 16,00 496,00 ties 0c total 31 a. post-test < pre-test b. post-test > pre-test c. post-test = pre-test a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 36 table 8 shows the results of data processing using the wilcoxon test, which can be concluded that negative ranks = 0 indicates that there is no decrease from the pretest scores to the posttest scores of the students. the positive ranks indicate that 31 students experienced an increase in learning outcomes from pretest to post-test. the mean rank shows an increase to the amount of 16.00. the results of the wilcoxon signed rank test that the asymp. sig. (2-tailed) is in the amount of ,000. the significance result (sig.) is <0.05 which indicates that there is a difference between learning outcomes before and after using excel vba-based learning media or it can be concluded that there is a significant influence on the use of excel vba-based learning media in accounting practicum learning. the result of research and development in the form of excel vba based learning media is considered conforming to the research objective of creating effective learning media as a supplement to be used in accounting practice learning of grade xi smk accounting. this research shows that excel vba software-based learning media are feasible and effective as supplement to accounting practice learning. this is because the students have achieved the basic competence in manual accounting practice learning. excel vba has interesting features, from excel dashboard display that according to harmastuti and setyowati (2018) has the advantage of displaying attractive graphic and can be the main capital for designing corresponding and consistent dashboard display, button placement, choice of image, font, and color. this is confirmed by hasana and maharany (2017) that vba programming can make microsoft excel’s display more attractive, practical and innovative. this clearly can create comfortable, conducive and non-boring class condition due to reciprocal process between student and the excel vba software programmed and can establish good relationship between student and teacher. this result is confirmed by astuti and bhakti (2018) that using vba based excel application as learning media in class makes learning more effective and comfortable. this is because excel vba based learning media in accounting practice learning offer many benefits to student and teacher, including: 1) available application instruction manual; 2) available orderly presented case exercises and worksheets, 3) links are available in working process in the next sheet until the last sheet, thus in case of journaling mistake, the ones corrected on the worksheet are general journal, big book, and balance sheet before adjustment, that will be automatically modified in the next sheets up to financial statements sheet, and 4) available automatically produced score graphic that is accessible only to teacher. excel vba based learning media are capable of training student’s skill in using microsoft office software to prepare financial statements with computer aid. this research result is supported by the research conducted by bernard and senjayawati (2019) that using excel vba, student will have their understanding improved and will complete case given more easily. in line with this, the research conducted by rachmawati (2017) shows that using microsoft excel as financial reporting media, student’s learning outcome is higher than using manual recording media. the paperless learning media give users (student and teacher) an impression that accounting practice cannot only be performed manually using printed worksheet, but also using technology aid, which is more effective. this conforms to the research conducted by olusegun (2016) that technology facilitates financial statements processing, making it effective and efficient. therefore, the emphasis of learning media is on the balance in maximizing class learning activity between student and programmed computer. the experiment result shows that use of excel vba based learning media in accounting practice learning is valid, feasible, effective and attractive to student in accounting cases completion process compared to manual completion. this is confirmed by the research conducted by ihsan & yuniati (2021) that microsoft excel based interactive learning media are declared feasible and effective for use in introduction to accounting subject and the interactive learning media have better influence on student’s learning outcome and self-efficacy compared to the use of conventional media. excel vba based learning media can also minimize cheat between students and facilitate teacher in scoring student’s works. therefore, teacher only serves as facilitator who gives instruction, guidance and explanation to student (ningsih, 2018). this shows that the use of multimedia in accounting practice learning can reduce a.f. ulfa, n.laily/ journal of accounting and business education, 7 (2), march 2023 37 conventional (manual) learning’s weaknesses and facilitate teacher in identifying student’s learning position. other research shows that excel (spreadsheet) based learning media innovation can increase and attractive student’s curiosity in physics learning process, making learning easier to understand (putranta & kuswanto, 2018). success in excel based learning media has also been shown by the research conducted by oktaviani and dewi (2020), in which the use of excel vba in mathematics learning has positive response from student as identifiable from student’s motivation at percentage of 69.5%. the success is confirmed by the research conducted by rohaeti et al. (2019) that visual basic application (vba) for excel and powerpoint based learning media are feasible for application in in-class learning for junior high school (smp) students on opportunity material using an open-ended approach. therefore, the presence of excel vba based learning media innovation as a supplement to accounting practice learning for smk institutional financial accounting department students helps teacher achieve effective and efficient learning. conclusion based on the research and development results above, we may conclude that: 1) product resulting from the development was in the form of excel vba based learning media for supplement in accounting practice learning, 2) excel vba based learning media for student consist of transaction bank, how to use accounting cycle worksheet and application, 3) excel vba based learning media for teacher consist of transaction input, how to use the application, graphic of student’s scores and key answers on accounting cycle worksheet, 4) the result of excel vba based learning media validation shows that the learning media are feasible for application in accounting practice learning as supplement, 5) excel vba based learning media are effective for application in accounting practice learning, and 6) additionally, the research and development contribute to the school in the form of excel vba based learning media in accounting practice learning and give teachers guidance in the application operation that novelty is needed for the exercise in the transaction bank sheet and worksheet. the excel vba based learning media research and development still are still limited in students’ lack of laptop that not all of them have the device and lack of persuasive and systematic approach in excel vba based learning media application with user due to limited time. excel vba based learning media also have not been equipped with notification feature in case user answers a question wrong since the research and development produce excel vba based learning media in accounting practice learning without internet connection. therefore, further research is expected to develop excel vba application accessible through school’s web accounting practice or web e-learning using internet access for maximization of learning media of every educational institution in indonesia. in addition, the excel vba application is expected to be accessible via teacher and student’s smartphone. further research can develop other program by making use of excel vba in financial sector in public environment. references arifiyani, c. a. p., & susanti. 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(2017). pengembangan bahan ajar praktikum akuntansi dengan myob accounting berorientasi pada metode drill. edunomic jurnal pendidikan ekonomi, 5(2), 97–108. https://doi.org/10.33603/ejpe.v5i2.310 d.t. irafahmi /journal of accounting and business education, 4 (1), september 2019 11 assessing the relevance of undergraduate auditing education: a scoping review diana tien irafahmi 1,2 1 school of education, faculty of humanities, curtin university, australia 2 accounting department, faculty of economics, universitas negeri malang, indonesia email: diana.tien.fe@um.ac.id doi: http://dx.doi.org/10.26675/jabe.v4i1.9114 abstract: while previous literature review studies have explored the current status of accounting education, a literature review that focuses explicitly on auditing education is scarce. the objective of this scoping review was to map the existing studies that assess the relevance of undergraduate auditing education to meet contemporary auditing practices. the scoping review followed the protocol outlined by arksey and o'malley (2005) that has five main stages: (1) identifying research questions; (2) identifying relevant studies; (3) study selection; (4) data charting, and (5) collating, summarizing and reporting the results. the reviewed studies were selected from three electronic databases: proquest, taylor & francis, and science direct within 25 years time span (1995-2019). the results of the scoping review indicated that the majority of the studies recognize a positive shift both in terms of content and pedagogy to keep its relevance to professional demand. however, as has been claimed by johnson, baird, caster, and dilla (2003), the shift in auditing education is occurring more slowly than the demand of profession. emphasis should be given to content as a gap still exists between auditing educators and practitioners. keywords: auditing education, accounting education, undergraduate, scoping review, higher education introduction auditing practices are changing rapidly in line with changes in the business world. the main factors that contribute to the transformation of the business world are the proliferation of accounting and auditing regulations and the extensive use of technology (bryan & smith, 1997; reinstein, churyk, & tate, 2018). arens and elder (2006) explained that new regulations in the audit field emerged following the discovery of fraud audits. although the phenomenal scandals were the enron or worldcom in the early 2000s, in fact major frauds had been discovered long before (arens & elder, 2006). since the late 1930s, mckesson robbins scandal has been responded to by regulators and standard setters by issuing statements on auditing procedures, which detailed requirements for confirming receivables and observing inventory (arens & elder, 2006). in the 1970s, after equity funding and continental vending fraud, rules regarding peer review and division of firms emerged (arens & elder, 2006). subsequently, in the 1980s, a regulation was issued regarding the obligation to document the understanding of controls and conduct analytical procedures, after the case of crazy eddie and esm government securities (arens & elder, 2006). the sarbanes-oxley act (sox) is a regulation in 2002 that has significant impact on the auditing profession and practices (arens & elder, 2006). the issuance of new regulations in the field of journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ d.t. irafahmi /journal of accounting and business education, 4 (1), september 2019 12 auditing is an indication of the responsiveness of regulators and standard setters to overcome financial fraud. unfortunately, the efforts of regulators and setter standards in making regulations are more curative than preventive, given that new rules that significantly change auditing practices are always published after a scandal. in addition to regulation, the transformation of the business world and auditing practices are also triggered by technology. information technology (it) is believed to have a positive impact on audit quality. it is a substantial tool for increasing audit effectiveness and efficiency (antcliff, doren, harris, & hayes, 2012; bierstaker, burnaby, & thibodeau, 2001; borkowski, bukics, & welsh, 2007). bierstaker et al. (2001) explained that there are at least three substantial stages in auditing that use it intensively: audit planning, audit testing and audit documentation. in the audit planning stage, it helps auditors to assess the internal and external risks of the client's business that will affect the audit process (bierstaker et al., 2001). it also plays a substantial role in the audit testing phase because it saves time to complete audit procedures such as extracting data, selecting samples, performing calculations that were previously done manually (bierstaker et al., 2001). while in the audit documentation phase, it has changed the form of audit documentation, from the paper documentation to electronic documentation that makes it easier for auditors to share and trace audit documentation between auditors (bierstaker et al., 2001). in line with the opinion of bierstaker et al. (2001), herron and morozzo (2008) explained that a major change in audit practices is the use of technology to replace manual processes. all audit work, such as making program audits, selecting samples, designing schedules with clients, doing substantive analytical procedures, and client research always involves the use of it (herron & morozzo, 2008). the transformation in the business world and audit practices as described above has resulted in the strong demands for an adaptive auditing education (arens & elder, 2006). the international accounting education standards board (2017) states that undergraduate accounting program in universities is the first institution to educate prospective accountants/professional auditors. iaesb (international accounting education standard board), aicpa (american institute of certified public accountants), and the pathways commission have designed minimum criteria for graduates of accounting programs that can be used as a reference for universities in designing accounting education programs, including auditing sub-disciplines (american institute of certified public accountants, 2018; international accounting education standards board, 2017; the pathways commission, 2012, 2015). thus, auditing education should be able to develop the competences of prospective auditors so that they are in line with the expectations of stakeholders. unfortunately, audit education is never free from criticism (armitage, 2008; armitage & poyzer, 2010; blouch, ulrich, & michenzi, 2015, 2016; bryan & smith, 1997; johnson et al., 2003; ulrich & blouch, 2018; ulrich, michenzi, & blouch, 2009). indications of auditing education mismatch with stakeholder expectations can been seen in the results of frakes (1987). more than three decades ago, frakes (1987) surveyed in the us to gather information related to problems faced by auditing education at the undergraduate level. with 470 university respondents in the us, this survey shows that "auditing is seen as a difficult course to teach" (frakes, 1987, p. 124). auditing educators who are respondents of this study find it difficult to harmonize auditing teaching with current audit practices. the main problem, which then was synthesized, is in the area of curriculum design, development of relevant teaching materials, dissemination of technology and ongoing audit education for auditing educators. this study aimed to map the existing literature related to the relevance of auditing education to meet the current auditing practices. the previous scoping studies that focus on the area of auditing education are unknown. in the broader area, such as accounting education, the literature review has been conducted serially by apostolou et al. (see eg apostolou, dorminey, hassell, & hickey, 2019; apostolou, dorminey, hassell, & rebele, 2015, 2016, 2017, 2018; apostolou, dorminey, hassell, & watson, 2013; apostolou, hassell, rebele, & watson, 2010). literature review research by apostolou et al. aimed to summarize and review articles published in several leading accounting education journals such as the journal of accounting education, accounting education, issues in accounting education, and advances in accounting education: teaching and curriculum innovations, and the accounting educators' journal. research by apostolou et al. covered a variety of sub-disciplines in accounting education, such as tax, d.t. irafahmi /journal of accounting and business education, 4 (1), september 2019 13 auditing, information system, managerial accounting, and financial accounting. apostolou et al. applied the traditional literature review method, which according to munn et al. (2018) tends to be subjective because it is very dependent on the pre-existing knowledge and experience of the researcher. in contrast to the literature review of apostolou et al., this study applied the scoping review method and limits the area in the field of auditing education. scoping review is popularly used primarily in the field of health science research (o'brien et al., 2016). the framework to conduct scoping review can be seen in arksey and o'malley's paper (2005). munn et al. (2018) detail the differences in the characteristics of scoping review and systematic review, especially in terms of its objectives. scoping review is used if the purpose of the review is to "identify knowledge gaps, scope a body of literature, clarify concepts, investigate research conduct, or to inform a systematic review" (munn et al., 2018, p. 6). another distinguishing feature between scoping and systematic review is the synthesis of findings. systematic reviews are more rigorous than scoping reviews in terms of synthesizing findings, using statistical meta-analysis or meta-synthesis or a combination of the two if a mixed-method review is applied (munn et al., 2018). the respondents in the study conducted by o’brien et al. (2016) explain the reasons for their preferences of applying scoping review because scoping review is considered a powerful tool for mapping a topic with an approach that is not "as rigid as systematic reviews" (o’brien et al., 2016, p. 4). methods the scoping review method adopted in this study was from arksey and o'malley (2005). arksey and o'malley (2005) used the 5-step scoping review approach, including (1) identifying the research questions; (2) identifying relevant studies; (3) study selection; (4) charting the data, and (5) collating, summarizing and reporting the results (p. 22). o'flaherty and phillips (2015) applied the 5-step approach to scoping a review of flipped classrooms. johnston, crooks, snyder, and kingsbury (2010) also followed the protocol from arksey and o’malley to understand the impact of medical tourism on destination and departure countries. although the scoping study by johnston et al. (2010) and o'flaherty and phillips (2015) are outside the auditing education area, the description of the steps in scoping a review in their research has provided practical guidance for scoping a review in this study. identifying the research questions it is substantial to identify research questions in the initial stages of the scoping review. by establishing research questions, researchers can design strategies for conducting literature searches while ensuring that substantive areas are covered (arksey & o'malley, 2005; o'flaherty & phillips, 2015). the research question in this study is: "what is known from the existing literature about the relevance of undergraduate auditing education to meet contemporary auditing practice?" identifying relevant studies in an effort to identify literature relevant to research questions, key search terms were made. key search terms that are closely related to auditing education at the undergraduate level are: "auditing education" or "auditing curriculum"; "auditing education" and "undergraduate"; "auditing curriculum" and "undergraduate". boolean operators were used to narrow down the searching area and combine the required terms. arksey and o'malley (2005) explain that searching could go through different sources, such as "electronic databases, reference lists, hand-searching of key journals, existing networks, relevant organizations and conferences" (p. 22). in this study, the source used was electronic database with the consideration that the database encapsulates many reputable journals so that searching for literature through an electronic database is more effective and efficient. the electronic databases selected were: d.t. irafahmi /journal of accounting and business education, 4 (1), september 2019 14 proquest, science direct, and taylor & francis. these three databases are prevalent for searching literature in the area of business or business education. the criteria used in the process of searching literature are depicted in table 1. the period used was 25 years, from 1995 to 2019. the 25-year time span was considered sufficient to track the relevance of auditing education research. the publication type chosen was empirical article peer-reviewed journals that had been published in the english language. the geographic region was not limited to certain countries. all empirical studies from various countries were included in the criteria as long as they met the other criteria mentioned earlier. table 1. inclusion criteria criterion inclusion period 1995 – 2019 25 years of observation language english most peer-reviewed articles are published in english publication type journal article only empirical peer-reviewed articles are included in the study geographic region all findings from all countries study selection the results of searching three electronic databases using key search terms found 268 articles, 46 articles were from taylor and francis, 81 articles were from science direct, and the rest were 141 articles from proquest. these articles were then examined to determine their suitability with the research question. the articles were also checked to find the possibility of duplicate articles within different databases. at this stage of the study selection, 256 articles were discarded. most articles that did not fit the research question were because: (1) they did not discuss auditing education at the undergraduate level (for example, at the master level or cpe-continued professional education); (2) the articles were not empirical research; and (3) they did not address the issue of auditing education relevancy. charting the data at the data charting stage, selected articles were extracted to summarize the most substantial data. the data recorded were data about the author, year of study, location of study, objectives, design/method, and findings. collating, summarizing and reporting the results the last stage of scoping review was collating, summarizing, and reporting research results. collating produced a table in which contains the extraction of articles carried out at the stage of charting the data. summarizing produced main themes or patterns from the main findings, and reporting produced report format, which in this case was for publication purpose. table 2 shows the results of collating data. table 2. data collating no author year study location aims design/method major findings 1 (bryan & smith) 1997 us understanding the auditing educators’ perception on the importance of the topics taught in the auditing course a survey on 223 auditing educators there was a common perception among auditing educators regarding the most substantial topics that must be taught in the auditing course d.t. irafahmi /journal of accounting and business education, 4 (1), september 2019 15 2 (mccartne y, marden, & adair) 2002 us investigating the gap between internal auditing topics taught and those needed by practitioners a survey on 40 internal auditing educators and 130 internal auditors in general, there was a similar perception between educators and practitioners regarding substantial topics to teach, but there were several topics that differ in their level of preference (for example topics related to technology in auditing) 3 (johnson et al.) 2003 auditing syllabi from the us and canada understanding the suitability of the syllabi to the professional requirements content analysis of 262 auditing syllabi there was an increase in the pedagogical and technological resources aspects of learning, but the increase were too slow compared with the profession demands 4 (greenstei n & mckee) 2004 us understanding the perception of auditing educators and practitioners regarding it auditing a survey on 304 educators and 246 practitioners there was a learning gap between academics and practitioners regarding it auditing. the academics consider it auditing can be learned in the workplace while the practitioners encourage it auditing to be learned while studying 5 (armitage) 2008 accounti ng faculty directory (mostly the us and canada) identifying auditing topic ranking change from the year 2000 to 2005 a survey on 217 auditing educators in 2000 and 311 auditing educators in 2005 there was a change of auditing educators on the importance of auditing topic to teach from 2000 to 2005 6 (ulrich et al.) 2009 us finding out the importance of auditing topic rating and whether the auditing textbooks have been effective in developing the topic a survey on 71 auditing educators there were four quadrants to connect the results of the level of importance to the level of effectiveness. educators should prioritize the teaching of topics in quadrants one and two. textbook authors and publishers should focus on topics in quadrant two since the textbooks were not to be effective in their coverage to develop topics in quadrant 2 7 (armitage & poyzer) 2010 us comparing the educators’ and the auditing practitioners’ perception regarding the importance of auditing topic a survey on 179 academics and 139 practitioners there was a difference between the academics’ perception and those of the practitioners’. the practitioners argued that the substantial topics are the ones related to the practice, while academics tend to prioritize topics related to the theory. 8 (chaffey, van peursem, & low) 2011 new zealand understanding the topics, skills, and pedagogy that are substantial for students’ career development from a survey on 130 auditors to the practitioners, the substantial topics were those that sharpen judgment, critical thinking, practical skills, and ethics. substantial skills were communication skills, practical d.t. irafahmi /journal of accounting and business education, 4 (1), september 2019 16 the practitioners’ point of view. elements, and judgment-based procedures. the substantial pedagogies are case studies, visiting professional educators, and computer-based audit. 9 (blouch et al.) 2015 us survey the cpa regarding the relevance of auditing education a survey on 91 public accounting firms of 63 topics, there were 31 topics whose substantiality rating was above the total mean, and 32 topics whose substantiality rating was below the total mean. the most substantial topics, according to cpa, were those related to auditing practices. 10 (blouch et al.) 2016 us identifying the effectiveness of auditing textbooks in covering pre and post sox auditing topics a survey on pre-sox: 101 and post-sox: 71 educators several auditing topics had postsox higher effectiveness rating, but there were also several topics had post-sox lower effectiveness rating. since there were many substantial topics to cover in auditing course, the need for advanced auditing course is necessary. 11 (ulrich & blouch) 2018 us understanding the perception of cpa regarding textbooks suitability in developing substantial topics to teach in auditing courses. a survey on 91 cpa firms for the practitioners, in general, the textbooks were good enough in developing substantial auditing topics to teach, yet special attention to topics in quadrant ii is necessary 12 (reinstein et al.) 2018 us identifying learning resources and learning activities applied in auditing 2 courses a survey on members of aaa auditing section the surveys showed the diversity of learning resources and learning activities applied in auditing 2 courses at universities in the us. results with a 25-year time span from 1995-2019, only 12 empirical studies were found to be most suitable for research questions. nine studies (75%) research sites were in the us, 1 study (8%) was in the us and canada, and 1 study (8%) covered several countries, but most of the respondents were from the us and canada, while 1 study originating from outside the us was from new zealand. most studies publication years (92%) were above the year 2000, and only 1 study (8%) could be identified from the year before 2000. this was an indication that the 2002 sarbanes-oxley act (sox) has triggered researchers to seek the gap between auditing education and auditing practices. all studies deployed a survey research design, except for one study used a content analysis design. the approach taken to determine the relevance of auditing education from these studies was by surveying stakeholders of auditing education: auditing educators and/or auditing practitioners. blouch et al. (2016), bryan and smith (1997), armitage (2008), ulrich et al. (2009), and reinstein (2018) surveyed auditing educators. chaffey et al. (2011), blouch et al. (2015), ulrich & blouch (2018) observed auditing practitioners. mccartney et al. (2002), greenstein & mckee (2004), armitage & poyzer (2010) examined d.t. irafahmi /journal of accounting and business education, 4 (1), september 2019 17 both two parties: educators and practitioners. johnson et al. (2003) collected data from auditing educators, but the focus of their study was on the auditing syllabus. bryan and smith (1997) conducted a study to determine the importance of 31 topics of auditing to be taught at the auditing course. the topics were taken from 6 leading auditing books. in general, 223 surveyed auditing educators in the us had similar opinions about which topics were relevant and substantial to teach. the ten most substantial topics were generally accepted auditing standards, riskmateriality-engagement strategy audits, internal controls, evidence audits, audit reports, auditors' professional responsibility and legal liability, inherent and control risk assessing, substantive tests, departures from unqualified opinions, and aicpa code of professional conduct. topics about technology, were perceived as less substantial to teach. the reason was probably because educators’ expectation for students to learn auditing technology in other courses such as accounting information system. besides, educators thought the topic could be learnt during an in-house training session in accounting firms. further, the majority of educators stated that topics that must be covered were too many and were not enough to be taught in 1 semester. in addition, the topics taught did not bring real-world auditing closer to students. mccartney, marden, and adair (2002) showed that there were topics of auditing whose preferences were perceived different by academics and practitioners. topics related to technology in auditing were perceived to get higher ranking (more substantial to be taught) by auditors than by auditing educators. both practitioners and academics considered that case studies and audit practitioners' guest lecturers in auditing classrooms are substantial to excel the status of auditing education. johnson et al. (2003) analyzed whether auditing syllabus has adopted professional aspects such as thinking skills, communication, and it. the results of 262 syllabi study in the us and canada showed positive and negative sides. on the positive side, in terms of pedagogy, there have been efforts to improve thinking skills, communication, and it, through case studies, group activities, presentations, and writing assignments. technology resources such as video and internet assignments are also available for teaching auditing. the negative side, according to johnson et al., was that the auditing courses that integrate it usage were minimal. besides, auditing course was mostly offered in one course. johnson et al. (2003) argued that offering one auditing course without any advanced auditing courses would impede the pace of auditing education to remain relevant to the demands of the profession. greenstein and mckee (2004) stated that there was a learning gap between practitioners and academics. from 304 academics and 246 practitioners surveyed, there were indications that academics tend to have a low level of it knowledge. academics assumed that mastery of technology in auditing can be learned when they enter the workforce. on the other hand, practitioners believed that knowledge about technology must be covered by auditing course. armitage (2008) identified the ranking of 41 auditing topics and changes in ranking from the year 2000 to 2005. the perception of auditing educators about the ranking of the importance of auditing topics underwent changes in the two years. topics considered to be more substantial in 2005 than in 2000 were reports on internal control, fraud awareness, and working papers, while topics considered to be less substantial in 2005 than in 2000 were assurance services, information systems auditing, computer auditing techniques, governmental/not-for-profit auditing standards, and legal liability of auditors (armitage, 2008, p. 935). the topics that were considered unimportant both in the 2000 and 2005 surveys was the auditing history and governmental audit/auditing for not for profit organizations. the focus of teaching auditing remains the same in both years, that was on external auditing. another finding was that in 2005, there was a strong tendency to balance teaching theory and practice. ulrich et al. (2009) examined the level of importance of 63 topics of auditing and the level of effectiveness of auditing textbooks to develop important topics in auditing. the results of the study were then mapped into four quadrants. quadrant 1 was a place to map topics that were substantial and textbooks have been effective in developing the topics. there were 28 topics in quadrant 1. quadrant 2 consisted of a reasonably substantial topic, but textbooks were less effective at developing the topics. seven topics fall into this category. most of the topics in quadrant 2 are related to fraud and ethics. quadrant 3 and 4 contain topics that were less substantial or less relevant to the demands of the d.t. irafahmi /journal of accounting and business education, 4 (1), september 2019 18 profession. the 16 topics in quadrant 3 were less covered by auditing textbooks, whereas the 12 less substantial topics in quadrant 4 were developed in the auditing textbook. armitage and poyzer (2010) found that there were differences in the perceptions of educators and practitioners in rating the importance of auditing topics to be taught in auditing courses. the practitioners believed that the substantial topics taught are those related to auditing practices such as documentation, fraud techniques, tests of controls, and substantive testing. instead, the educators consider a substantial topic to be related to theory for conducting audits, for example, audit risk, internal control, financial statement assertions, and fraud awareness. regarding the topic of fraud, educators perceived that teaching fraud awareness was more important than teaching fraud techniques. on contrary, practitioners saw the need to put more emphasis on teaching fraud techniques. similarly, the topic of it auditing for practitioners is a very important topic to be taught, while educators consider it less substantial. the topic of audit reports for educators needs to be discussed in depth, while for practitioners the topic is sufficiently discussed briefly, by giving examples of the correct report form and its format. chaffey, van peursem, and low (2011) in the results of a survey of 130 auditors found that auditors emphasized the importance of teaching auditing in the aspects of communication skills, practical skills, ethics, judgment and critical thinking. to get practical skills, auditing theory needs to be integrated with auditing practice through case studies, visiting professional educators, computer based audits and infield learning experience. the combination of theory and practice in auditing education is very substantial because there are many accounting graduates who understand the theory but are unable to apply the theory in practice, as expressed by the auditors in this study. blouch et al. (2015) conducted a cpa (certified public accountant) survey related to the relevance of auditing education. for cpas, of the 63 topics surveyed, there were 31 topics that received a rating above the total mean, indicating a high level of importance, and there were 32 topics that received a rating below the total mean which indicates lower importance levels. topics related to auditing practice were more substantial than topics related to concepts. examples of substantial topics according to the cpa are detailed tests of balances, analytical procedures, audit and business risks, evidence and documentation of work performed. blouch et al. (2016) used sox as a cut-off to examine the relevance of the content of the auditing and effectiveness of the auditing text in developing the content. 101 educators surveyed before sox, and 71 educators after sox. after the issuance of sox regulations, the direction of the auditing curriculum has changed. there were several auditing topics with a higher effectiveness rating after sox: materiality, reporting on internal control, audit risk / audit failure, business risk, and audit procedures. similarly, there were several audit topics that get lower effectiveness ratings after sox: compilation information and reports, review services and reports, internal control reportable differences, governmental auditing, and generally accepted government accounting principles. given that there were so many substantial topics that must be covered in the auditing course, blouch et al. argues that there should be an auditing 2 course as a continuation of auditing 1. ulrich and blouch (2018) analyzed the level of importance and effectiveness of the auditing education curriculum. using 4 quadrants as a strategy mapping, ulrich and blouch mapped 63 auditing topics into quadrant 1 to 4. the implication for the textbook publisher and authors is that they should deepen the discussion on topics in quadrant 2, and reduce or eliminate topics in quadrant 4. for educators, priority should be on topics in quadrants 1 and 2, while the intensity of topic discussion in quadrants 3 and 4 can be reduced or eliminated given the limited time of teaching in the auditing course. reinstein et al. (2018) conducted a survey of auditing instructors in the us who are aaa auditing section members. the purpose of the survey is to identify learning resources and learning activities used in auditing 2 or advanced auditing. the results of this study are expected to help other auditing educators to design learning in auditing 2. the survey showed the variation of learning resources and learning activities used in auditing 2. the primary learning resources used in auditing 2 were textbooks and case studies resources such as education journals, knapp, self-developed cases, and trueblood. the main learning activities were case studies, lectures, discussions, group projects, and d.t. irafahmi /journal of accounting and business education, 4 (1), september 2019 19 student presentations. the results also showed that the application of technology in auditing such as idea and acl was rarely implemented in the auditing classes. discussion the main idea of the surveys included in this scoping review centered in two things. firstly, the relevance of auditing education from the aspect of the content and secondly, the relevance of auditing education from the aspect of pedagogy. content is related to what topic must be taught so that accounting graduates have in-depth knowledge and skills to become professional auditors. while pedagogy is related to how well to teach the content to achieve the intended learning outcomes. the relevance of auditing education from the aspect of content auditing educators tend to use auditing textbooks as a guide for choosing the content of auditing course (bryan & smith,1997). more than the next two decades, reinstein (2018) showed that auditing textbooks still dominated the selection of content. textbooks usage is not limited to determine the content. other than content, texbooks have been used to determine learning objectives as well as assessment (irafahmi, nuris, zahroh, & nagari, 2018). given the importance of the role of a textbook, it is not surprising that all studies in this scoping review determine the types of auditing topics based on the list of topics in popular auditing textbooks, such as books by arens, louwers, and messier. in addition, studies conducted by ulrich et al. (2009), blouch et al. (2016) and ulrich & blouch (2018) not only examine what topics are substantial to teach, but also analyze the level of effectiveness of textbooks in developing auditing topics. in order to remain relevant to the current audit practices, auditing content must be continually reviewed following the efforts made by the 12 studies included in this scoping review. albrect & sack (2000, cited in ulrich et al., 2009, p. 64) strongly stated, "we don't need to cover all the traditional material ... throw away what is needed and try to make the program as value added as possible ". this opinion is fully supported by the results of the 12 studies above. auditing educators do not need to teach all the topics in the auditing textbook. there are topics that are considered substantial, and there are topics that are less substantial so that priority level should be given only to those substantial topics (bryan & smith, 1997; reinstein et al., 2018). even if only the topics that are considered substantial are taught, the numbers of topics are still relatively too large to be covered in one auditing course. some educators proposed an idea of having the new course such as auditing 2 or advanced auditing as the continuation of auditing 1 (blouch et al., 2016; bryan & smith, 1997; johnson et al., 2003; reinstein et al., 2018). de lange, jackling, and gut (2006), hossain, kummer, and o’leary (2015) and willis (2016) stated that the accounting and auditing education curriculum is too crowded. exposure to high volume of content will reduce students’ understanding on more professional oriented content such as auditing technology, thinking skills and communication skills. biggs and tang (2011) reminded that "the greatest enemy of understanding is coverage ... if you are determined to cover a lot of things ... they (students) have not had enough time to go into things in depth,... and be able to perform that understanding in different situations "(gardner, 1993, p. 24 cited in biggs & tang, 2011, p. 43). regarding the content or topic selection, it is necessary to compare the perceptions of auditing educators to those of the practitioners’, as has been done by mccartney et al. (2002), greenstein & mckee (2004), and armitage & poyzer (2010). academics and practitioners have different views about the priority of auditing content (armitage, 2008; armitage & poyzer, 2010; blouch et al., 2015; bryan & smith, 1997; greenstein & mckee, 2004; mccartney et al., 2002). for practitioners, auditing technology topics are very important, but auditing educators think differently (armitage, 2008; armitage & poyzer, 2010; bryan & smith, 1997; chaffey et al., 2011; greenstein & mckee, 2004; mccartney et al., 2002). considering that the current auditing practices have changed dramatically due to the intensive use of technology (bierstaker et al., 2001; herron & morozzo, 2008), it is likely for practitioners to expect students to be equipped with technological skills. unfortunately, johnson et al. (2003) and reinstein et al. (2018) proved that up to now the integration of technology in the auditing course is still very limited. the d.t. irafahmi /journal of accounting and business education, 4 (1), september 2019 20 results of greenstein and mckee (2004) showed interesting findings that auditing educators are senior accounting lecturers who tend to have a low level of it knowledge. perhaps this is the reason why there is a delay to integrate auditing technology in an auditing course. another reason is due to auditing educators' expectations to include technology in different courses, such as in accounting information system course (armitage, 2008; mccartney et al., 2002). it is interesting to study in the future whether integrating technology in an auditing course or separating auditing technology in different course has different effect on students’ learning outcomes. besides the topic of auditing technology, a substantial difference between academics and practitioners is about emphasizing practice versus theory. unlike practitioners who prefer topics related to practice, academics prefer topics related to theory (armitage & poyzer, 2010; blouch et al., 2015). because the priority of academics is on teaching theory, the chosen auditing topic is less able to give an accurate picture to students about real auditing practices (bryan & smith, 1997; chaffey et al., 2011). in their survey of cpas, blouch et al., (2015) described "cpa practitioners rank the topics that focus on the practice of auditing higher on importance, including detailed tests of balances, analytical procedures, auditing and business risks, evidence and documentation of work performed, than those that focus more on concepts such as opinion related topics (p.101). in line with this, fouché (2013) stated that the focus of auditing teaching is still on transferring knowledge, which ignores the importance of bringing the real world of auditing to students. although practitioners consider the practice to be more relevant for the development of the professional abilities of students, the theory remains substantial to understand as a basis for conducting auditing practices. therefore, for chaffey et al. (2011) and armitage and poyzer (2010), the ideal auditing class is a balanced element of theory and practice. armitage and poyzer (2010) explained, "the optimal auditing class is one that can provide students not only with the underlying theory but also with enough skills and techniques to succeed in their first job. that is the most substantial ―job of an accounting professor — choosing the appropriate blend of theory and practice to be included in their classes‖ (armitage & poyzer, 2010, p. 76). the relevance of auditing education from the aspect of pedagogy the right content will not be meaningful without the right way to teach it. according to the international accounting education standards board (2017), accounting graduates must have professional competence, beyond knowledge, which includes technical competence, professional skills, and professional values, ethics and attitudes. to achieve this objective, pedagogy such as direct instruction is not sufficient. compared with frakes’ research (1987), johnson et al. (2003) noted that there was an increase in pedagogical aspects, marked by the variety of methods applied in auditing education, such as case studies, group activities, presentations and writing assignments. the results of mccartney et al. (2002), chaffey et al. (2011) and reinstein et al. (2018) also showed that both academics and practitioners consider case studies and practitioner guest lectures as an appropriate method for introducing audit practices to students. the emergence of more creative pedagogy after year 2000 is perhaps also an indication of changes in auditing education that is responsive to sox regulation. case studies, according to biggs and tang (2011) have advantage to help students understand theory and practice at the same time, termed as 'just-in-time learning' (p. 161). the just-in-time learning could overcome the problem of time constraints to convey theory and practice. case studies are also potential to integrate various competencies at the same time. case studies auditing from andiola, lambert, and lynch (2018) and peaden and stephens (2013) are the examples. the two case studies, if applied, can develop student competencies in auditing, technology, communication, thinking skills (judgment and skepticism) and teamwork. drake (2011) introduced another type of case studies that are claimed not to be artificial and retrospective, named 'living case'. this living case uses a real corporate failure setting taken from the mass media to encourage critical appraisal of audit practices. related to guest lectures by practitioner, sanchez, agoglia, and brown (2012) uses a useful approach, namely interactive professional learning experience (iple). the idea of iple is to bring d.t. irafahmi /journal of accounting and business education, 4 (1), september 2019 21 practitioners into auditing classrooms to give lectures on certain topics so students could get meaningful learning experience. sanchez et al. (2012) provide a touch of interactivity in the relationship between practitioners and students, by asking practitioners to give professional supervisory to the results of student work. iple is proven effective in increasing students’ learning outcomes and bringing students closer to practitioners (sanchez et al., 2012). close collaboration between practitioners and academics is a way to maintain the relevance of content and pedagogy in auditing education (sanchez et al., 2012). conclusion the relevance of auditing education can be seen from the content and pedagogy aspects. based on this scoping review, it is clear that there have been efforts to improve the relevance of auditing education through content and pedagogical changes. however, as stated by johnson et al. (2003), the changes made were not as fast as practitioners’ expectation. the concern needs to emphasize on the content considering there is a gap between auditing educators and practitioners in ranking and prioritizing auditing topics that are substantial in auditing courses. once the appropriate content selected, the next step is to apply the right pedagogy, as discussed above. this scoping review has mapped the existing literature assessing the relevance of auditing education in meeting the demands of the profession. this scoping review has several limitations. only 3 electronic databases were used, so there may be literature that cannot be traced as it might be included in electronic databases other than proquest, taylor & francis and science direct. moreover, the key search terms were not consulted with librarians to determine the appropriateness of key search terms and boolean operator, such as those conducted by o'flaherty and phillips (2015). further, there is a possibility that auditing education studies also included in the core broad area such as accounting education, so the next scoping review needs to expand the key search term in accounting education. the research question for this study is limited to "what is known from the existing literature about the relevance of undergraduate auditing education to meet contemporary auditing practice?" future research can add research questions such as "what is known from the existing literature about the approaches that have been taken to keep the relevance of undergraduate auditing education?". by adding this research question, future research could provide comprehensive understanding of the role of auditing education. the majority of mapped literature is set in the us. the relevance of auditing education in other countries, especially in asian countries, is unknown. non-us research related to this matter is expected to emerge to provide an overview of the role of auditing education in educating prospective professional auditors. references american institute of certified public accountants. 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(2016). a model for teaching technology: using excel in an accounting information systems course. journal of accounting education, 36, 87-99. doi:https://doi.org/10.1016/j.jaccedu.2016.05.002 https://doi.org/10.1016/j.adiac.2018.05.001 https://doi.org/10.1016/j.jaccedu.2012.08.004 http://commons.aaahq.org/files/3968045e18/pathways_report_4_for_print.pdf https://doi.org/10.1016/j.jaccedu.2016.05.002 j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 38 does student satisfaction mediate the correlation between e-learning service quality, academic engagement and academic achievement? jumaroh ratna satuti 1 sunaryanto 2 dudung ma’ruf nuris 3 1,2,3 accounting department, faculty of economics, universitas negeri malang, indonesia email: jumarohratnasatuti@gmail.com doi: http://dx.doi.org/10.26675/jabe.v5i1.12699 abstract: this research aimed at analyzing the influence of e-learning service quality and academic engagement on academic achievement through student satisfaction as an intervening variable. only students who had ever used e-learning service could be the research sample and 222 students were sampled using purposive sampling. the data were collected by distributing questionnaire to the research samples. the data were analyzed using path analysis technique. the result indicated that e-learning service quality, academic engagement, and student satisfaction had an influence on accounting students’ academic achievement. from this research finding, it was suggested that university lecturers keep on developing teaching and learning strategies which can improve students’ academic engagement since it has been proven that academic engagement has a dominant influence on students’ academic achievement. keywords: e-learning service quality, academic engagement, student satisfaction, academic achievement introduction the technology disruption era 21st century presents the biggest chance possible for intercountry cooperations which lead to tight competition in every aspect of our life. the high competition has made both companies and institutions alike set specific terms and conditions in recruiting their employee candidates. one of the terms and conditions they set is the high academic achievement any future employee has ever achieved during their study. academic achievement, frequently measured by gpa (grade point average) score, is defined as the result of performance which indicates to what extent an individual has achieved the specific goal on which the activities within teaching environment, especially in higher education institutions, are focused (steinmayr et al, 2014). an individual with a high academic achievement is deemed to have good ability academically and this will have a good effect on their development at work. additionally, high academic achievement is also important when one wishes to continue their study to a higher level (steinmayr et al, 2014). in addition to such importance for an individual, academic achievement is equally important to measure a nation’s wealth and prosperity, for example for pisa (programme for international student assessment) ranking held by oecd (organisation for economic co-operation and development) once every three years (steinmayr et al, 2014). pisa constitutes worldwide rank assessment organized to test students’ academic ability in three fields, namely reading, mathematics, and science. however, the latest data released by oecd on december 3, 2019 in paris, placed indonesia at 72th position out of 77 countries, way lower than its neighboring countries such as malaysia and brunei darussalam which were ranked 48th and 50th respectively. this pisa ranking could be interpreted that indonesian students’ academic achievement was relatively low than other countries in the world. journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ mailto:jumarohratnasatuti@gmail.com http://dx.doi.org/10.26675/jabe.v5i1.12699 j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 39 a country’s high or low academic achievement was significantly influenced by many factors, including e-learning service quality (kasmin & hii, 2017). e-learning service quality is the thorough evaluation of the strength and quality of e-learning service experienced by students (santos & santos, 2003). students receiving good e-learning service quality would think that their need to the university is prioritized and fulfilled. this creates students’ perception that the university actually gives their full support to students in their attempt to be high academic achievers. however, an unexpected result comes from the adoption of e-learning into teaching and learning environment on academic achievement, in which contradiction emerges between them. some studies showed positive relationship between e-learning and academic success, for example, e-learning increased academic performance (lópez-pérez et al., 2011; roffe, 2002) and reflective and critical thinking (saadé et al., 2012), e-learning had a positive impact in reducing school dropout rate (lópez-pérez et al., 2011), and e-learning improve student satisfaction with their learning experience (lyons & evans, 2013). on the other hand, some studies also revealed the negative relationship between satisfaction with e-learning courses and academic achievement (levy, 2007) and the negative relationship between technology use and academic achievement (hunley et al, 2005). such contradiction was due to the level of e-learning service quality, engagement, and other characteristics such as attitude, motivation, and self-confidence in using e-learning technology which were varied among students. academic achievement is also influenced by academic engagement (assunção et al., 2020; kim et al., 2019; lin & huang, 2018; miralles-armenteros et al., 2019; navarro et al., 2018; sinval et al., 2018). academic engagement is defined by fredricks et al., (2004) as the students’ psychological and behavioral attempts in learning which include mastery of skills and knowledge in academic activities. students with high academic engagement will think that they are accepted and appreciated in their learning activities and this, in turn, can trigger serious attempts to get a high academic achievement. the last factor which influences academic achievement is student satisfaction (pham et al., 2018). student satisfaction is a short-time attitude in the form of a student’s happy or disappointed feeling as a result of evaluating their educational experience in the university which takes the form of comparison between their expectation and the performance/results they receive (shahsavar & sudzina, 2017). students with high satisfaction level in the university will devote everything they have to try their best in their learning activities, resulting in an improved academic achievement. this research tried to place student satisfaction as an intervening variable, because indirectly student satisfaction can strengthen the relationship between e-learning service quality and academic engagement on academic achievement (al-fraihat et al., 2020; zhao et al., 2019 ; al-rahmi et al., 2018; eom & ashill, 2018; mtebe & raphael, 2018; pham et al., 2018, 2019; shahsavar & sudzina, 2017; tossy, 2017). it is therefore important to conduct a study on various factors which influence students’ academic achievement, considering that academic achievement, in addition to its importance for individual achievement assessment, is highly essential to appraise a country’s prosperity. for this reason, this research focused on discovering how e-learning service quality and academic engagement influenced student satisfaction and its impact on academic achievement in accounting students. literature review and hypotheses technology acceptance model (tam) technology acceptance model (tam) is a theory which studies the behavior of an individual’s acceptance in accepting an information system (f d davis, 1985). a good technology system should meet two main requirements, namely usefulness and ease of use. individuals are more likely to accept an information/technology system when the technology can make their jobs easier and is easy to use without having to read a lengthy and complicated manual. this tam theory itself was suggested for the first time by davis (1985). tam is the application and development of theory of reasoned action (tra) specifically made for modelling the acceptance of use of information system. therefore, tam becomes a model construct developed to analyze and understand the factors which influence the acceptance of information technology use. in its development, tam has undergone some changes, namely tam2 (venkatesh & davis, 2000) and utaut (dillon, 2006). in general, tam has 2 goals, namely: (1) to explain the determinant factors of acceptance of information-based j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 40 technology in general, and (2) to explain the information technology final user’s behavior. acceptance model (tam) is a theory that studies an individual's acceptance behavior in receiving an information system (f d davis, 1985). figure 1. technology acceptance model (tam) (source: fred d. davis et al., 1989) external variables are the ones of external nature in considering to use technology, such as subjective norm, computer self-efficacy, and facilitating conditions (scherer et al., 2019). these variables then influence an individual’s cognitive responses consisting of 2 elements, namely perceived usefulness and perceived ease of use. perceived usefulness refers to the perception of whether using the technology benefit their life or not and perceived ease of use describes the ease of using the technology without having to carefully read the technical manual. in practice, perceived ease of use might influence perceived usefulness, the reason being an easy-to-use technology will make an individual thinks that the technology will benefit their life. furthermore, the two cognitive responses significantly influence people's affect response in the form of attitude toward using which can be either positive or negative attitude. positive attitude directs an individual to decide to use a technology and the negative attitude was the opposite. moreover, from a person's affect response, behavioural response emerges in the form of actual system use, i.e. the realization of actual technology use. thus, it can be concluded that an easy-to-use technology with some usefulness for life will direct the users to decide to use the technology in a long run. e-learning service quality beqiri et al., (2009) defines e-learning as the use of modern information and communication technology (ict) and computer which are connected to the internet to provide teaching and learning contents. e-learning is an innovative approach in delivering educational services in the form of electronic information which can enhance knowledge, skills, and other outputs of students (fazlollahtabar & muhammadzadeh, 2012). meanwhile, lewis and booms (1983) defines service quality as a measurement of how good a service is given based on customer’s expectation. service quality is the result of evaluation process, where customers compare their expectation and the services they receive (loring, 2007). thus, e-learning service quality can be defined as a thorough evaluation of the strengths and quality of e-learning service thought by students (santos & santos, 2003). elearning service quality is the measurement of how good was the provided e-learning service based on students’ expectation. the higher the quality of e-learning service provided to students, the higher the fulfillment of student needs, and in turn it could be said that students were satisfied with the e-learning service. in this research, the term e-learning referred to the use of any kind of teaching and learning media used by lecturers when they gave assignments or delivered lectures with no classroom face-toface meeting, for example using edmodo, google class, google form questions, blogspot, wordpress, etc. the use of e-learning for accounting students had not been completely thoroughly integrated, only some lecturers had applied the blended learning model in their classes. thus, the e-learning in this research was independent from the e-learning model managed by the university. the dimensions of e-learning service quality as developed by pham et al., (2019) consisted of 3 dimensions, namely e-learning system quality, e-learning instructor and course material quality, and perceived usefulness behavioural intention to use actual system use external variable atitude toward using perceived ease of use j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 41 e-learning administrative and support service quality. these dimensions were adopted from some other researchers such as: (1) han & baek (2004) which included 4 aspects, i.e. tangibles, reliability, responsivenessy, and empathy; (2) yang et al., (2004) which consisted of 2 aspects, namely ease of use and accuracy; and (3) delone & mclean (2003) which comprised of 2 aspects, namely content and timeliness. academic engagement various definitions on engagement have been proposed by experts, including skinner et al., (2009) who define engagement as the quality of student’s participation in school activities, values, and goals. student engagement is students' commitment to study and participate in educational environment to achieve their desired results (christenson, 2008). school engagement is student’s involvement in both academic and non-academic activities which could be observed through their behavior, emotion, and cognitive aspects, be it at school in general and in the classroom (fredricks et al., 2004). furthermore, henrie et al., (2015) suggest that academic engagement is the commitment or attempt to get involved in the context of academic learning at schools. from the various definitions of engagement above, it can be understood that academic engagement is students’ active participation in academic activities to achieve the expected outcomes. a high academic engagement represents students’ effort seriousness to achieve a satisfying final result. the dimensions of academic engagement are adopted from brown et al., (2017) which consist of 4 dimensions, namely: (1) skills: students’ engagement through practical skills; (2) emotional: students’ emotional engagement with classroom materials; (3) participation/interaction: students’ engagement through their participation in classroom and interaction with lecturers and other students; and (4) performance: students’ engagement through performance level in classroom. student satisfaction satisfaction is defined by bolton & drew (1991) as an evaluation of a certain service. satisfaction can be measured as a thorough feeling or satisfaction of transaction elements (fornell, 1992). in the context of higher education, students are deemed as main customers (sultan & wong, 2013), hence student satisfaction can be defined as a short-term attitude in the form of happy or disappointed feeling as a result of their experience with the educational services they receive (elliott, k.m. & healy, 2001). student satisfaction is the happy or disappointed feeling within students emerging after comparing the services they receive and what they expect. the higher the quality of service received by students, the more likely for them to be satisfied with the university. s. j. lee et al., (2011) develop 5 indicators to measure student satisfaction, namely (1) goal achievement: an evaluation of the learning activities done against the initially set learning goals; (2) interest in learning subjects: the desire to learn the learning objects seriously; (3) level of interest: liking/disliking classroom teaching model; (4) level of convenience: being convenient/inconvenient in attending classes; and (5) level of willingness to recommend: how enthusiastic they are to recommend other students regarding the classroom teaching model they have attended. academic achievement tian & sun (2018) define academic achievement as the level of development achieved by students through learning within a certain period of time under teachers' guidance and based on their previous experiences in such aspects as knowledge, skills, attitude, and values. furthermore, steinmayr et al (2014) suggests that academic achievement is the result of performance which indicates to what extent an individual has achieved the specific goals on which the activities in the teaching environment are focused, particularly at schools, academies, and universities. most school systems define academic achievement as the achievement of cognitive goals in various courses such as having critical thinking or having knowledge and understanding in intellectual fields such as sciences, history, and so on. from these various definitions, it can be concluded that academic achievement is the acumulation of final scores of each course obtained by students at each end of semesters or end of study time. j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 42 the indicators of academic achievement reached by a student can be seen from their gpa (grade point average). as stated by moore & shulock (2009), gpa is one of the best predictors of higher educational institution’s success in academic activities since it indicates students’ performance during their study in the university. gpa consists of final score acumulation for each course, and the final score is obtained from attendance, assignment, final examination, and mid-term examination scores. thus, it can be concluded that gpa is actually the right indicator to reflect students’ academic achievement in their classes. direct influence of e-learning service quality on student satisfaction e-learning service quality is a thorough evaluation of the strengths and quality of e-learning service experienced by students (santos & santos, 2003). the term service quality includes e-learning system quality, e-learning instructor and course materials quality, and e-learning administrative and support service quality. e-learning service quality serves as one of the factors which may influence student satisfaction (mtebe & raphael, 2018; zhao et al., 2019). as suggested by dehghan et al., (2014), student satisfaction occurs when they successfully achieve their goals. in particular, students will be satisfied when their educational service experience is greater than their expectation, and vice versa students will not be satisfied when their educational service is worse than their expectation (abdel-jaber, 2017). hence, a good e-learning service quality level can significantly increase student satisfaction. the correlation between e-learning service quality and student satisfaction has been widely studied by previous researchers. one of them was conducted by al-fraihat et al., (2020) which indicated that there was a positive correlation between e-learning service quality and perception of satisfaction. pham et al., (2018, 2019) findings indicated that the attributes in e-learning service quality such as course design, interaction between student and instructors, interaction between student and student, technology-related, and support and administrative service collectively influenced student satisfaction. it can be inferred that the better the e-learning service quality the more likely for student satisfaction to increase significantly. this is because high e-learning service quality can make students feel comfortable in learning courses and thus it can lead to student satisfaction. from this elucidation, it can be concluded that e-learning service quality has a direct influence on student satisfaction, therefore the following hypothesis can be drawn: h1 : there is a direct influence of e-learning service quality on student satisfaction direct influence of academic engagement on student satisfaction academic engagement is the time and effort spent by students to participate in teaching and learning activities both in or outside the classroom (kuh, 2003). the theoretical framework of student engagement was first developed by alexander astin (1984) who explained that students changed and developed as a result of their participation in teaching and learning activities. students with a high participation had better intellectual and social integration with the university than students with low engagement (loya, 2014). in particular, participation is generally associated with positive outcomes in students, such as better academic achievement and increased student satisfaction. this is supported by webber et al., (2013) who suggest that higher level of participation with lecturers, campus employees, and other students collectively give a contribution not only to students’ higher gpa scores, but also to their satisfaction with all academic experiences. the association between academic engagement and student satisfaction has been massively studied by previous researchers. one of them was conducted by assunção et al., (2020) to 3.992 students from europe, north and south america, africa, and asia. their research result indicated that academic engagement had a positive influence on student satisfaction. furthermore, research by navarro et al., (2018) to 1,335 engineering students in 11 universities in latin america found that academic engagement had a positive and significant influence on student satisfaction. this was also supported by cheong & ong (2016) who stated that in particular, engagement is generally associated with positive result in students such as better academic achievement, retention, and satisfaction with j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 43 the institution. from this, it can be seen that academic engagement has a positive influence on student satisfaction (webber et al., 2013). it could be said that the higher the academic engagement of students, the more likely for students to feel more satisfied. this is because high academic engagement makes students think that they are welcome, supported and involved in campus activities, hence it nourishes their sense of belonging to the university and in turn this leads to high student satisfaction. from the explanation, it could be concluded that academic engagement has a direct influence on student satisfaction, therefore the following hypothesis can be proposed: h2 : there is a direct influence of academic engagement on student satisfaction direct influence of student satisfaction on academic achievement the research conducted by tossy (2017) at tanzania university found the fact that student satisfaction on e-learning system had a positive association with student achievement. students with high satisfaction level with the university’s services were more likely to have high achievement. as suggested by martínez-argüelles & batalla-busquet (2016), the provision of good university service quality could increase student satisfaction and eventually this led to student loyalty. loyal students had extremely high commitment to contribute to the development of university in general and their education program in particular (pham et al., 2018). students’ specific contribution to the university could be in the form of increased student achievement during their study. based on the explanation above, it could be said that the higher the student satisfaction, the more likely for students to obtain higher academic achievement. students with high satisfaction with the university will be loyal to the university. this loyal attitude of the students will lead to improved academic achievement. it could be concluded that student satisfaction has a direct influence on academic achievement, thus the following hypothesis could be drawn: h3 : there is a direct influence of student satisfaction on academic achievement indirect influence of e-learning service quality on academic achievement through student satisfaction in the current e-learning environment, students are deemed as customers and student satisfaction is always one of university’s most important goals (j. w. lee, 2010). to obtain student satisfaction, universities should first understand quality attributes of e-learning services experienced by students, and then the actions needed to be implemented to improve the quality of e-learning service in general, aiming to realize e-learning student satisfaction. many attributes form e-learning service quality in previous studies. these attributes include course design (kuo et al., 2014; moore & shulock, 2009); interactions between students and instructors (billiger, d. u & martindale, 2004; s. j. lee et al., 2011; paechter et al., 2010); interactions between students and students ( broadbent & poon, 2015; paechter et al., 2010); technology-related (masrom et al., 2008; pituch & lee, 2006; selim, 2007), and support & administrative services (jesús martínez-argüelles et al., 2013; levy, 2007). each attribute of service quality gives different contribution to overall e-learning service quality, and in turn, the overall e-learning service quality influences e-learning student satisfaction. as found by the previous research conducted by tossy (2017) to students at tanzania university, student satisfaction on e-learning system had a positive relationship with academic achievement. students with high satisfaction level with the university’s service were more likely to have high achievement. it could be concluded that e-learning service quality has an indirect influence on academic achievement through student satisfaction as an intervening variable. therefore, the following research hypothesis is proposed: h4: there is an indirect influence of e-learning service quality on academic achievement through student satisfaction j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 44 indirect influence of academic engagement on academic achievement through student satisfaction researchers have found that student engagement could be a strong predictor for student achievement and behavior at school, regardless their socio-economic status (arhar & kromrey, 1993; mounts & steinberg, 1995; voelkl, 1995). students with high engagement level at schools are more likely to obtain higher scores (goodenow, 1993) and test scores (roderick & engel, 2001) and have lower dropout rate (klem & connell, 2004). on the contrary, students with low engagement level have a risk to be exposed to various long-term bad consequences, including disturbing behavior in classroom, absenteeism, and dropout (v. e. lee, 1995). based on the explanation above, it is safe to say that the higher the academic engagement which is supported by student satisfaction, the more likely for students to get high academic achievement. high academic engagement refers to the time and energy spent by students in learning activities. when students have high engagement, they will have a sense of belonging to the university. high engagement leads to student satisfaction and eventually it improves academic achievement. from this, it can be concluded that academic engagement has an indirect influence on academic achievement through student satisfaction as an intervening variable. thus, the following research hypothesis is proposed: h5: there is an indirect influence of academic engagement on academic achievement through student satisfaction as an intervening variable methods this research is categorized as explanatory research. the sample in this research was 222 accounting students taken using purposive sampling technique with a criterion of having ever taken a course which used e-learning in its learning activities. academic achievement was taken from the questionnaire responses related to student’s score in the form of latest gpa for 2019/2020 academic year in students used as the research sample. e-learning service quality was measured using the indicators adopted from pham et al., (2019) consisting of 3 dimensions, namely: e-learning system quality, e-learning instructor and course material quality, and e-learning administrative and support service quality. academic engagement was measured using the indicators adopted from brown et al., (2017) consisting of 4 dimensions, namely: skills, emotional, participation/interaction, and performance. student satisfaction was measured using the indicators adopted from s. j. lee et al., (2011) consisting of 5 indicators, namely: interest in learning subjects, goal achievement, interest level, convenience level, level of willingness to reccomend. therefore, the flow chart of this research could be drawn as follows: figure 2. research flow chart e-learning service quality (x1) academic engagement (x2) student satisfaction (z) academic achievement (y) j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 45 results respondent profile the profile of respondents could be classified by class of year and the type of e-learning used. the class of year consisted of 2, namely classes of 2017 and 2018. as could be seen in the following table, based on their class of year, the respondents were dominated by class of 2017, i.e. 129 students or 58.11% and the class of 2018 had 93 students or 41.89%. the profile of respondents by class of year could be seen in the table below: table 1. class of year of respondents class of year frequency percentage 2017 129 58.11% 2018 93 41.89% total 222 100.00% furthermore, based on the type of e-learning used, respondents used 3 types of e-learning, namely edmodo, sipejar, and google class. as could be seen in the table below, based on the type of elearning the respondents dominantly used edmodo amounting to 151 students or 68.02%. the profile of respondents by type of e-learning could be seen in the table below: table 2. type of e-learning of responden type of e-learning frequency percentage edmodo 151 68.02% sipejar 46 20.72% google class 25 11.26% total 222 100.00% sub-structure 1 t\est this sub-structure 1 test was used to test the influence of e-learning service quality and academic engagement on student satisfaction. the result of sub-structure 1 simultaneous regression analysis test was shown in the following table: table 3. result of sub-structure 1 simultaneous regression analysis test model sum squares df mean square f sig. regression 121.255 2 60.627 43.0 9 .000 b residual 308.133 219 1.407 total 429.387 221 based on the table above, it was found that the value of sig 0.000 < 0.05, thus according to the basis of decision making in f test, it could be concluded that the estimated model was worth using to explain the influence of e-learning service quality and academic engagement on student satisfaction. table 4. result of sub-structure 1 variable regression coefficient model unstandardized coefficients standardized coefficients b std. error beta t sig (constant) -.171 1.406 -.121 .904 e-learning service quality .188 .034 .351 5.613 .000 academic engagement .109 .024 .281 4.496 .000 j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 46 from the table above, it could be explained that each association between e-learning service quality on student satisfaction and academic engagement on student satisfaction was significant since it had a significance value < 0.05. sub-structure 2 test sub-structure 2 test was used to test the influence of e-learning service quality, academic engagement and student satisfaction on academic achievement. the result of sub-structure 2 simultaneous regression analysis test was shown in the following table: table 5. result of sub-structure 2 simultaneous regression analysis test model sum of squares df mean square f sig. regression 4.162 3 1.387 73.854 .000 b residual 4.095 218 .019 total 8.258 221 based on the table above, it was found that the value of sig 0.000 < 0.05, thus based on the basis of decision making in f test, it could be concluded that the estimated model was worth using to explain the influence of e-learning service quality, academic engagement and student satisfaction on academic achievement. table 6. result of sub-structure 2 variable regression coefficient model unstandardized coefficients standardized coefficients b std. error beta t sig (constant) 1.392 .162 8.569 .000 e-learning service quality .008 .004 .113 2.025 .044 academic engagement .028 .003 .520 9.548 .000 student satisfaction .031 .008 .225 3.991 .000 from the table above, it could be explained that the e-learning service quality, academic engagement, and student satisfaction variables had a positive and significant influence on academic achievement since their significance value < 0.05. summary of path analysis result based on the sub-structure 1 and 2 tests, the summary of path analysis result could be written as follows: table 7. summary of path analysis result no path description path coefficient influence direct indirect through z 1 x1 on z 0.351 2 x2 on z 0.281 3 z on y 0.225 4 x1 on y 0.192 0.113 0.079 5 x2 on y 0.583 0.520 0.063 from the table above, it could be seen that student satisfaction could mediate the association between e-learning service quality and academic engagement on academic achievement, this could be seen from the extent of indirect influence at 0.079 and 0.063. the indirect influence of e-learning service quality on academic achievement through student satisfaction was 0.079, which was obtained from multiplying the beta coefficient of e-learning service quality on student satisfaction with the beta coefficient of student satisfaction on academic achievement, i.e. 0.351 x 0.225 = 0.079. meanwhile, the indirect influence of academic engagement on academic achievement through student satisfaction j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 47 was 0.063, which was obtained from multiplying the beta coefficient of academic engagement on student satisfaction with the beta coefficient of student satisfaction on academic achievement, i.e. 0.281 x 0.225 = 0.063. discussion direct influence of e-learning service quality on student satisfaction the research result indicated that there was a positive and significant influence between elearning service quality on student satisfaction. this meant that when the e-learning service quality increased, student satisfaction would also increase. as suggested by dehghan et al., (2014), student satisfaction occured when they successfully achieved their goals. in particular, students would be satisfied when they had greater educational service experience than their expectation and, vice versa, students would not be satisfied when they had less educational service experience than their expectation (abdel-jaber, 2017). thus, a good e-learning service quality level could significantly improve student satisfaction. based on technology acceptance model (tam) theory, e-learning was deemed as a technology innovation accepted by users (students and lecturers) since it met 2 cognitive response elements in tam, namely perceived usefulness and perceived ease of use which led users to the final stage of tam, namely actual system use. the e-learning used by most accounting department students of 2017 and 2018 classes was edmodo and google classroom. judging from the result of descriptive statistic analysis, it was indicated that 59.46% of students thought that the e-learning service quality was high. meanwhile, student satisfaction was 54.96% and this was classified as high. from the three indicators in e-learning service quality attributes, the e-learning system quality indicator played the most important role in evaluating e-learning service quality, i.e. showing a percentage of 36.64%, then the e-learning administrative and support service quality indicator at 32.91%, and the e-learning instructor and course material quality indicator palying the lowest role at 32.45%. from this result, it could be said that the apperance of e-learning and information in e-learning played an important role in research on e-learning service quality in accounting students. students receiving good e-learning service quality thought that their need to the university was prioritized and fulfilled. this made the student satisfaction increase as well. this research result confirmed the research conducted by al-fraihat et al., (2020) who found that there was a positive association between e-learning service quality and perception of satisfaction. it was also supported by pham et al., (2018, 2019) findings, i.e. that the attributes in e-learning service quality such as course design, interaction between student and instructors, interaction between student and student, technology-related, and support and administrative service as a whole had a positive and significant effect on student satisfaction. direct influence of academiceengagement on student satisfaction the research result indicated that there was a positive and significant influence of academic engagement on student satisfaction. this was in line with loya (2014) who suggested that students with high participation had better intellectual and social integration with the university as compared to those students with low engagement. in particular, participation was generally associated with positive result in students, such as better academic achievement and improved student satisfaction. this was supported by webber et al., (2013) who suggested that higher participation level with lecturers, campus employees, and other students collectively contributed not only to higher gpa score, but also to their improved satisfaction on all academic experiences. the theoretical framework of academic engagement was firstly developed by alexander astin's (1984) who argued that students changed and developed as a result of their participation in learning activities. furthermore, brown et al., (2017) developed the component/dimensions of academic engagement which consisted of 4 dimensions, namely skills, emotional, participation/interaction, and performance. judging from the descriptive statistic analysis result, it was indicated that 39.19% of students had relatively high academic engagement. meanwhile, student satisfaction was 54.96% and this was high. from the four indicators in academic engagement, the skills indicator played the most important role in academic engagement assessment, i.e. showing a j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 48 percentage of 25.66%, then emotional indicator at 25.18%, participation/interaction indicator at 24.94%, and performance indicator at 24.22%. from this result, it could be said that attendance in classroom teaching and learning, teaching and learning preparation, and attitude in classroom played important roles in academic engagement assessment in accounting students. students with high academic engagement led to high student satisfaction. this was because high academic engagement made students think that they were welcome, supported and involved in campus activities and this gave birth to their sense of belonging to the university and eventually it led to improved student satisfaction. this research result confirmed the result of research conducted assunção et al., (2020) dan navarro et al., (2018) which found that academic engagement had a positive influence on student satisfaction. this was also supported by cheong & ong (2016) who suggested “in particular, engagement is generally associated with positive student outcomes such as better academic achievements, retention, and satisfaction with the institution”. from this, it could be seen that academic engagement had a positive influence on student satisfaction (webber et al., 2013). direct influence of student satisfaction on academic achievement the research result indicated that there was positive and significant influence of student satisfaction on academic achievement. student satisfaction was defined as a short-term attitude in the form of happy or disappointed feeling as a result of their experience with the educational service received (elliott, k.m. & healy, 2001). some factors which might influence student satisfaction as suggested by appleton-knapp & krentler (2006) were institutional and personal factors. the institutional factors included teaching quality, quality and timeliness of lecturer’s feedback, lecturer’s teaching style, and class size (porter & umbach, 2001). the personal factors included age, sex, occupation, temperament, preferred learning style and grade point average (gpa). the theoretical framework of student satisfaction suggested that students with high satisfaction level with university’s service were more likely to have high achievement. high satisfaction with the university would make students loyal on university. students’ loyal attitude would lead to improved academic achievement. this research result confirmed tossy (2017) who found the fact that student satisfaction on e-learning system had a positive relationship with student achievement. this was also supported by martínez-argüelles & batalla-busquet (2016) who stated that providing good university’s service quality could improve student satisfaction and eventually it led to student loyalty. students who were loyal had extremely high commitment to contribute to the development of university in general and their education program in particular (pham et al., 2018). students’ specific contribution on university could take the form of improved student achievement during their study. indirect influence of e-learning service quality on academic achievement through student satisfaction the research result indicated that there was an indirect influence of e-learning service on academic achievement through student satisfaction. student satisfaction in this research was used as an intervening variable or the variable which mediated the association between e-learning service quality and academic achievement. based on the discussion in hypothesis 1, it could be seen that e-learning service quality had a positive influence on student satisfaction, meaning that the higher the e-learning service quality the more likely for student satisfaction to increase. also, based on the discussion in hypothesis 3, i.e. the influence of student satisfaction on academic achievement, it was found that there was a positive influence of student satisfaction on academic achievement. the existence of student satisfaction variable in this interaction served as a mediation or intermediary between elearning service quality and academic achievement in accounting students. this research also supported the result of previous research conducted by tossy (2017) in students at tanzania university who stated that student satisfaction on e-learning system had a positive association with academic achievement. students with high satisfaction level on university’s service were more likely to have high achievement. j. r. satuti, sunaryanto, d. m. nuris/journal of accounting and business education, 5 (1), september 2020 49 indirect influence of academic engagement on academic achievement through student satisfaction the research result indicated that there was an indirect influence of academic engagement on academic achievement through student satisfaction. student satisfaction in this research was used as an intervening variable the variable which mediated the association between academic engagement and academic achievement. based on the discussion in hypothesis 2, it was found that academic engagement had a positive influence on student satisfaction, meaning that the higher the academic engagement the more likely for student satisfaction to increase. also, based on the discussion in hypothesis 3, i.e. the influence of student satisfaction on academic achievement, it was found that there was a positive influence of student satisfaction on academic achievement. the presence of student satisfaction variable in this interaction served the mediation purpose or as an intermediary between academic engagement and academic achievement in accounting students. this research also supported the result of previous research which found that academic engagement could be a strong predictor on achievement and student’s behavior at schools, regardless their socio-economic status (arhar & kromrey, 1993; mounts & steinberg, 1995; voelkl, 1995). students’ with high engagement at schools were more likely to get higher scores (goodenow, 1993) and test scores (roderick & engel, 2001), and they had lower dropout rate (klem & connell, 2004). on the contrary, students with lower engagement level had greater risks of catching bad long-term consequences, including disturbing behavior in the classroom, absenteeism, and dropout (v. e. lee, 1995). conclusion based on the research result and discussion given, it could be concluded that there was a direct and significant influence of e-learning service quality and academic engagement on student satisfaction and there was a direct positive and significant influence of student satisfaction on academic achievement of accounting department students. the research result indicated that when the e-learning service quality was good and it was equipped with similarly good academic engagement, student satisfaction was more likely to be good, hence at the end of the day it would have a good impact on academic achievement. this research also successfully gave an empirical evidence of indirect influence of e-learning service quality on academic achievement through student satisfaction of accounting department students. thus, in order to increase students’ academic achievement, university could improve their e-learning service quality, since high e-learning service quality could increase student satisfaction which would resulted in a maximum academic achievement. the research result also found that academic engagement had an indirect influence on academic achievement through student satisfaction, thus in order to increase students’ academic achievement, campuses could increase their academic engagement, since high academic engagement could improve student satisfaction and this would resulted in a maximum academic achievement. 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(2019). what matters most in online sapenabled course learning ? a system view of determinants. 6, 7583–7591 l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 54 accounting students’ academic fraud: empirical evidence from indonesia lisa savilia 1 nujmatul laily 2 1,2 accounting department, faculty of economics, universitas negeri malang, indonesia email: lisavilia0710@gmail.com doi: http://dx.doi.org/10.26675/jabe.v5i1.12569 abstract: the high rates of academic fraud in many countries make this research important to be conducted. this research aimed at investigating the factors which influenced accounting students‟ academic fraud as seen from fraud triangle theory and 220 accounting students were randomly sampled to be its samples. the data were collected using a questionnaire distributed either in person to the respondents or using a google form. the data were analyzed using multiple regression. the research results indicated that fraud triangle (pressure, opportunity, rationalization) and academic entitlement had a significant influence on accounting students‟ academic fraud. this means lecturers could minimize academic fraud among their students by reducing pressure, opportunity and rationalization as well as academic entitlement. keywords: academic fraud, accounting students, fraud triangle introduction academic fraud has been massively studied by previous researchers, yet it remains an interesting topic for research due to the high rate of academic frauds occuring at universities in many countries. ahmed's (2018) research provides an empirical evidence of academic fraud in one of universities in middle east where 65% students misconducted using electronic media and 80% of the students were also found committing academic fraud at cyber university of south korea. one of the misconducts was by asking answers to students previously taking the same course. academic fraud was also committed by nursing students in malaysia not only while doing their tests, but also during their apprenticeship (abusafia et al., 2018). the behaviors which can be classified as academic fraud include plagiarism, giving help to others to misconduct, and cheating. bujaki, et al. (2019) explain that academic frauds are the action or behavior practiced to benefit oneself in improper ways. in addition, burke & sanney (2018) reveal that behaviors falling into academic frauds include acknowledging other‟s works as one‟s own, facilitating other students to commit academic frauds and general wrongdoings committed in an unjustifiable manner. it is believed that the existence of academic fraud is driven by certain factors, such as pressure, opportunity, rationalization and academic entitlement (burke & sanney, 2018; costley, 2019; abusafia et al., 2018; krou et al., 2019; stiles,et al.,2017). pressure, opportunity and rationalization are known as fraud triangle. burke & sanney (2018) suggest that fraud triangle may occur in academic realm. these three elements can be the cause for students to commit academic frauds. in the pressure, students feel pressured journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v5i1.12569 l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 55 by certain score standards. then, the opportunity makes students commit the academic fraud, due to the lack of supervision from the relevant parties. meanwhile, in the rationalization element, students will give excuses for the fraudulent behavior they have done. moreover, the presence of academic entitlement within themselves becomes the factor for milineal students to commit academic fraud (stiles, et al., 2017). pressure becomes the first element in fraud triangle theory. the pressure that drives students to commit fraud can be from anywhere. the pressure from within themselves to obtain good grades becomes the factor for students to commit academic fraud (singh & thambusamy, 2016; peterson, 2019). costley (2019) states that the main reason why students commit academic fraud is the pressure from the workload they have to assume. meanwhile, saana, et al. (2016) finds that the main factor why students commit academic fraud is pressure to obtain high grades, high assignment and test loads, and the pressure to make their parents happy. however, there are also studies that do not support the opinion that pressure can influence academic fraud, i.e. artani (2018) and sasongko et al. (2019) who suggest that the element of pressure do not influence academic fraud behavior due to the low level of competition to obtain high grades. the second element of fraud triangle theory is opportunity. opportunity can also be a factor for students to commit academic frauds. furthermore, artani (2018) and ahmed (2018) suggest that opportunity has an influence on academic frauds. this opportunity to commit academic frauds emerges due to the low supervision paid to students. it is also due to the lack of disciplinary action to fraud behavior which will eventually give a deterrent effect to the culprit (yendrawati & akbar, 2019; sasongko et al, 2019). catacutan's (2019) explained that students commit frauds due to the weak institutional factor in checking for academic fraud. nevertheless, melati, et al. (2018) explain that opportunity has no influence on academic frauds. this is because the supervision paid is inadequate, leading many students to get caught red handed while commiting the fraud. furthermore, opportunity has no influence on academic frauds since despite the fact that supervision is disseminated, academic frauds are still done (santoso & cahaya, 2019). in addition to pressure and opportunity, rationalization also becomes the trigger for students to commit academic fraud. value rationalization is more oriented as a academic fraud factor, rather than a rationalization instrument (krou, et.al., 2019). singh & thambusamy, (2016) suggest that students have understood that academic frauds are wrong, yet they still do that for various reasons. also, students commit frauds since they see their peers doing the frauds (meiseberg, et al., 2017). eriksson & mcgee (2015), state that students rationalize or justify academic fraud behaviors for some reasons such as lack of time needed and fear of failing. however, this contradict some other studies, where sasongko et al., (2019) reveal that rationalization has no influence on academic frauds since students understand that academic fraud behavior is wrong. in addition, rationalization has no influence on academic fraud due to the strong pressure and opportunity (yendrawati & akbar, 2019). aside from the three fraud triangle elements, academic entitlement can be the cause for students to commit academic frauds. academic entitlement becomes the factor which drives millenial students to commit academic frauds (stiles et al., 2017). students with high academic entitlement are more likely to be pressured to obtain good grades to make their parents happy and they wish that they will be appreciated with some money or prize for getting good grades. this perception could encourage students to commit academic frauds (luckett et al., 2017). academic entitlement includes not only the sense of right in academic field, rather it can also be associated with problematic behaviors such as frauds (reysen, et al., 2017). in sohr-preston & boswell's (2015) study, it is revealed that academic fraud is one factor of academic entitlement. however, this is different from the result in elias's (2017) research, which finds that academic entitlement does not influence academic fraud behavior. previous studies have immeasurably studied academic fraud, yet costley (2019) and ahmed‟s (2018) studies investigate only academic fraud without associating it to other variables. meanwhile, scott (2017) disccusses academic fraud and fraud triangle, yet he does not explore the pressure element, even when this element is a part of fraud triangle. furthermore, santoso & cahaya (2019) and melati, et al (2018) fail to discover empirical evidences of the correlation between fraud triangle and academic fraud. this research will use different indicators from previous studies and add the academic entitlement variable l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 56 as a predictor of academic frauds. the academic entitlement variable in bertl, et al (2019), fletcher, et al (2019) and mclellan & jackson's (2017) studies are not associated with the academic fraud variable. literature review and hypotheses fraud triangle theory the fraud triangle theory is the one explaining the factors causing an individual to commit fraud, as suggested by donal r. cress. according to association of certified fraud examiners (acfe), the research conducted by cressy in 1973 found that an individual committed fraud when they had a financial issue they could not solve collectively, and held a believe that the issue could be solved in secret. also, the fraud culprit was also aware that the fraud was unacceptable, yet they would think that what they had done was reasonable. the fraud theory was then introduced to the audit realm where it had such components as pressure, opportunity and rationalization. nevertheless, basically academic fraud is a fraud. according to burke and sanney (2018), the components in fraud triangle can also be seen in academic world. the first is pressure in students‟ grades where they think that they have to achieve a certain grade and these students will not succeed in doing so unless they cheat. secondly, students are given the opportunity to commit a fraud. thirdly, students justify whatever excuse they use to commit the fraud. according to kranacker, et al. (2010) the motivations in fraud triangle can be identified with money, ideology, coercion and ego. attribution theory the attribution theory was pioneered by heider in 1958 and it was then developed by some experts, including weiner in 1985. this theory explains the cause why an individual practices certain behaviors. essentially, this theory distuingishes two types of causal attributions, i.e. internal and external attributions. internal or dispotion attribution is personal factor such as ability, personality, attempts or characters. meanwhile, external or situational attribution is the attribution from surrounding environment such as surrounding people, norms, or even time. everything has cause and effect, and this also applies to how an individual behaves. a person‟s behavior can be caused by themselves or others (stephens, 2017). there are some components in attribution theory according to weiner (1985), they are ability, task difficulty, attempts and luck. these components are used to see the causes why a person commits a behavior or why an event happens. according to weiner, to figure out the cause behind a person‟s behavior, three dimensions can be checked up. these dimensions are parts of causal attribution, consisting of locus of control, stability, and controllability. the locus itself is divided into two, internal and external. internal locus believes that failure or success comes from within oneself and external locus deems that success and failure are influenced by surrounding environment (chowning & campbell, 2009). stabillity shows whether or not the cause is stable. to what extent the cause can change from time to time. the cause behind a person‟s behavior can change from time to time or remain for any time depending on where it comes from. meanwhile, contrability shows to what extent a cause can be controlled or not. contrability has two types, controlled and uncontrolled contrability. a controllable cause is the one where oneself can control the causal cause of an event. finally, uncontrolled contrability is a causal cause of an event which cannot be controlled by oneself, rather it is controlled by others or surrounding environment (stephens, 2017) pressure singleton, et al. (2010: 45) suggest that pressure refers to something happening in one‟s life which makes them stressed and eventually gives birth to the motivation to do the fraud. usually, the pressure which leads to motivation to commit fraud revolves around financial pressure. however, other motivations can also make an individual stressed and commit frauds. according to melati, et al, (2018), pressure is defined as a circumstance where an individual is required to be able to do something. the l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 57 pressure received by students can be the pressure of their scholarship being withdrawn if they obtain poor grades and marginalized by their groups due to their failure of fulfilling the minimum academic standard (burke & sanney, 2018). this pressure is the most dominant element in the academic frauds committed by students (muhsin et al, 2018). depressed students are more likely to commit fraud than those who have no pressure in their learning. every student surely has the pressure to obtain good grades (peterson, 2019). the main reason for students to commit academic frauds lies in the pressure of workload they have to assume (costle 2018). the large amount of assignments which are frequently assigned at the same time when they have to take tests makes students stressed and commit academic fraud to lessen the loads they have to assume. opportunity the second element of fraud triangle is opportunity. the main factor of opportunity is the given internal control (singleton et al, 2010). the level of internal control may give the opportunity to commit frauds. opportunity emerges due to the weak internal control to prevent and detect frauds (karyono, 2013). in addition, frauds can also occur because of the weak sanction and inability to assess quality. academic frauds are done when there is an opportunity, where students think that they are under a circumstance which allows them to commit academic frauds (melati et al., 2018). in becker et al (2006), some items are used to measure the opportunity used by students to commit frauds. these indicators include: teachers do not check for any possible plagiarism; teachers do not change the form of assignment test or assignment given to different groups of students; students are in an environment where many other students commit frauds and teachers do not prevent frauds from happening. rationalization students commit frauds for many reasons to make what they have done justifiable. people rationalize the frauds to make them less guilty. cheats are usually done to deceive others, yet rationalization will involve the cheaters to lie to themselves and justify what they have done (albercth, 2012). rationalization is defined as an action to justify the behavior done in a logical way, even if the behavior is wrong (melati et al, 2018). rationalization becomes the reason why students commit right frauds as a strong reason and matching the students‟ perspective. when students commit academic frauds, they will have the ability to rationalize for many reasons (jennifer, 2019). students will think that what they have done does not harm anyone and that is how they rationalize their academic frauds. students make justification or rationalization to academic frauds to lessen the psychological inconvenience between the frauds and moral values (hendy & montargot, 2019). academic entitlement bertl, et al, (2019) suggest that entitlement is a self-concept to obtain something more than others. in education, academic entitlement is defined as the tendency to believe that students are entitled to get good grades regardless their ability and the teaching and learning they get (stiles et al., 2017). turner & mccormick (2017) explain that academic entitlement is a student‟s attitude to expect good academic results with no personal attempts. in addition, students‟ expectation to have good, fair and acceptable behavior from lecturers is the conceptualization of academic entitlement (mclellan & jackson, 2017). according to fletcher et al., (2019), academic entitlement is caused by overparenting to students at a high level of perfectionism. this makes students hold high expectation of the results they will achieve later. in turn, this leads students to take whatever means to make their desired expectations come true, even if the means are improper. examples of academic entitlement are when students ask their lecturers to give them good grades or when students think they are entitled to receive a certain service since they have paid the tuition fee (mclellan & jackson, 2017). l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 58 academic fraud karyono (2013) defines frauds as defiant and unlawful acts or the act of providing false description to others for a certain purpose. frauds are done to obtain benefits for either oneself or a group by doing improper acts which harm others. frauds could occur in various fields related to finance. they could also occur in academic field. academic frauds emerge in many levels of education, including higher education institutions. students commit frauds using numerous ways, including receiving answers from classmates who take tests at different times, cooperating during tests, and receiving leak of questions from their senior (costley, 2019). academic frauds include plagiarism or imitating other‟s works, fabrication or falsifying information, facilitating or helping fellow students to commit fraud, and general wrongdoings (burkey & sanney, 2018). academic frauds do not occur spontaneously rather they emerge thanks to some factors which trigger students to commit academic frauds. according to sagoro (2013), some forms of academic frauds such as students prepare small notes for tests or quizzes, using notes/cheat sheet during tests or examinations, copying answers during tests, using dishonest method to figure out what are to be tested, copying others‟ answers without telling them, helping others to cheat, acknowledging others‟ works as their own (plagiarizing), falsifying references, cooperating with teachers to finish assignments and copying some sentences (including from the internet) without incorporating the source into the references (plagiarism). influence of presssure on accounting students’ academic frauds the fraud triangle theory suggests that the frauds committed by individual are encouraged by the pressure they receive. pressure is a circumstance where a person wishes to achieve a goal, yet they are limited by their inability and eventually they commit a fraud (albertch, 2012). the pressure received by students can also come from their internal factors such as lack of self-confidence and external factor like economic pressure, the pressure to obtain high grade and graduation timeliness. the motivation to commit frauds usually revolves around some financial pressures, yet other motivations can also lead someone to be pressured and then commit frauds (singleton et al., 2010:45). the great pressure could make students stressed hence it gives birth to their motivation to commit academic frauds. pressure makes students urged to commit academic frauds. the influence of pressure on academic frauds can also be seen in mustikarini, et al., (2017) who show that pressure has a positive and significant effect on academic frauds. the pressures between male and female students are different. male students are more pressured than their female counterparts when they receive pressure from their parents to obtain good gpa (quraishi & aziz, 2017). the pressure to fulfill the grade standards while having many assignments given to them can also lead students to commit academic frauds (minarcik & bridges, 2015; costley,2019). this is because good grades and timely graduation have been the goals for most students. this makes them a pressure for students. furthermore, peterson (2019) and saana et al., (2016) reveal that students will surely have pressures to obtain good grades, to finish massive assignment and task loads, and to make their parents proud. the high standards students need to achieve make them feel pressured and eventually commit academic frauds (tonasa & setyorini, 2019). it can be concluded that the greater the pressure they receive, the more likely for a person to commit academic frauds. therefore, hypothesis proposed is as follows. h1: pressure has a significant influence on accounting education students‟ academic frauds. l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 59 influence of opportunity on accounting students’ academic frauds opportunity becomes the next element in fraud triangle theory. opportunity is a circumstance or situation which allows a person to cheat with no detection made for that behavior. the opportunity given will make a person freer to commit frauds (albertch, 2012). students have this opportunity due to the lack of supervision given, placing students under a condition which enable them to commit academic frauds. based on fraud triangle theory, frauds are supported by the opportunity owned to commit it. internal supervision from either lecturers or faculty should determine the measures to minimize the opportunity to commit academic frauds. the higher the opportunity given, the higher the rate of fraud to occur. the opportunity element in fraud triangle shows that opportunity has some effect and serves as a strong reason for students to commit academic frauds (artani, 2018; sasongko, et al., 2019; huang et al., 2015). low supervision and technology development as a form of opportunity has an influence on plagiarism as a form of academic frauds (yendrawati & akbar, 2019). also, during tests students can choose their own seats. this gives them a great opportunity to commit academic frauds (sasongko, et al., 2019). students will choose a seat which could not be reached by supervision and allow them to commit academic frauds freely. ahmed (2018) also finds that when supervision given to students is low, there will be an opportunity to commit academic frauds. students commit academic frauds during a test since it is administered in a big hall, preventing supervisors from reaching all parts of it. this creates a condition which allow them to commit academic frauds (abusafia et al.,2018). moreover, catacutan's (2019) study finds that students commit frauds due to weak institutional factor in checking for academic frauds. however, the study above is different from santoso & cahaya (2019) who find that opportunity has no influence on academic frauds. despite the dissemination given regarding the supervision, students still commit academic frauds. additionally, when the supervision given is good enough, many students are caught red handed for frauds (melati et al., 2018). thus, the greater the opportunity available, the more likely for a person to commit academic frauds. based on the explanation above, the hypothesis proposed is as follows. h2: opportunity has a significant influence on accounting education students‟ academic frauds influence of rationalization on accounting students’ academic frauds rationalization is the justification made by students to make them less guilty while committing academic frauds. the fraud triangle theory explains that the fraud culprit will justify what they have done. the lower the rationalization made, the lower the academic frauds they commit. students can justify the academic frauds they commit to maintain their self-image using rationalization. therefore, rationalization serves as a reason to not follow the applicable standards of ethics or norms (burke & sanney, 2018). an individual will rationalize their dishonest acts to prevent themselves from feeling guilty (albert, 2012). also, another excuse students frequently use to rationalize their academic frauds is that they think that their frauds harm no one (jennifer, 2019). becker, et al (2006) study reveals that rationalization has an influence on academic frauds in students. rationalization can be divided into two, namely value and instrument rationalizations. students committing frauds will be more dominant towards value rationalization than instrument rationalization (krou et al., 2019). students have understood that academic frauds are wrong, yet they still do that for many excuses (singh & thambusamy, 2016). in addition, students commit frauds since they observe the behavior of their peers who also commit frauds (meiseberg et al., 2017). eriksson & mcgee (2015) suggest that students rationalize or justify their academic frauds with some excuses such as the limited time needed, being afraid of failure to pass. moreover, melati, et al. (2018) research shows that rationalization has an influence on academic frauds. this is shown by students who have thought that frauds are something reasonable. students will rationalize their academic frauds with excuses they think acceptable, despite the fact that no matter what forms they may in, frauds are still wrong (scott, 2017). however, this is different from yendrawati & akbar's (2019) which finds that strong pressure and opportunity make rationalization has no effect on academic frauds. also, when students understand that l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 60 academic frauds are wrong, this makes rationalization has no effect on academic frauds (sasongko et al., 2019). thus, the greater a person‟s ability to rationalize something, the more likely for them to commit academic frauds. based on the explanation above, the following hypothesis is proposed. h3: rationalization has a significant influence on accounting education students‟ academic frauds. influence of academic entitlement on accounting students’ academic frauds academic entitlement is an attitude where students think they are entitled to obtain what they expect in academic field. in education, academic entitlement is defined by stiles, et al, (2017) as a tendency to believe that students are entitled to get good grades regardless their ability and the teaching and learning they receive. students with high academic entitlement will expect that good grades will be given in their classes. this matches the attribution theory‟s causal dimension which serves as a perspective of academic entitlement. the external locus of control dimension has something to do with academic entilement. in chowning & campbell (2009), it is suggested that external locus of control is the key of academic entitlement. the perceived academic entitlement owned by students assume that the grade they receive come from others, i.e. the lecturer. this leads to their low motivation to learn since they have thought that what they will obtain comes only from the lecturer. when the grades given do not go with what they wish, students will commit frauds to fulfill the academic entitlement. students commit frauds since they are reluctant to make some attempts to get grades using their own ability. also, students go mental when they do not get the good grades they expect from their lecturers. hence, to achieve this expectation, students commit academic frauds. this matches weiner‟s attribution theory which combines achievement motivation and emotion. stiles et al., (2017) reveal that academic entitlement becomes a predictor for millenial students to commit academic frauds. students with high academic entitlement are more likely to commit academic frauds to obtain good grades and they wish to be appreciated with money or prizes for their good grades. this perception drives students to commit academic frauds (luckett et al., 2017). academic entitlement includes not only a sense of right in academic field, rather it can also be associated with problematic behaviors such as frauds (reysen et al., 2017). meanwhile, sohr-preston & boswell (2015) use academic fraud as an independent variable, and their research finds that there is a correlation between academic frauds and academic entitlement. the research finding above is different from elias (2017) who suggests that academic entitlement has no influence on academic frauds. thus, it could be concluded that the higher the academic entitlement owned, the more likely for students to commit academic frauds. based on the explanation above, therefore, the following hypothesis is proposed. h4: academic entitlement has a significant influence on academic frauds in accounting education students. methods the approach used in this research was quantitative one and this was explanatory research. there were 220 accounting students were used as this research's samples. the data were collected using questionnaires which were distributed both in person and using a google form. pressure was a situation or circumstance which urges a person of something, and this urge will lead to frauds. this variable was measured using indicators adopted from albert, et al. (2012) and becker et al (2006). opportunity was defined as a situation which supported students to commit academic frauds. this opportunity variable was also measured using indicators from albert, et al., (2012) and becker et al (2006). meanwhile, rationalization was a condition where an individual would justify what they had done. again, this rationalization variable was also measured using indicators adopted from albert, et al., (2012) and becker et al (2006). finally, a person‟s attitude to believe that students were entitled to obtain good grades or prizes, by setting aside the knowledge and ability the students owned, was known as academic entitlement. l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 61 this academic entitlement variable was measured using indicators adopted from chowning & champell (2009). academic frauds were the activities to benefit one-self using dishonest method which harmed others in academic field. academic frauds were measured in this research using indicators from sagoro (2013), becker et al (2006), and musthapa & ali (2018). the data were analyzed using multiple linear regression analysis. results respondent identity by sex the respondent identity by sex was detailed in the following table. table 1. respondent identity by sex sex frequency percentage male 44 20% female 176 80% total 220 100% based on the table 1, it was found that most respondents were female at 80%. respondent identity by class of year respondent identity by class of year was shown in the following table. table 2. respondent identity by class of year class of year frequency percentage 2016 45 20.5% 2017 57 25.9% 2018 62 28.1% 2019 56 25.5% total 220 100% based on table 2, most respondents were from class of 2018 at 28.1%. hypothesis testing the result of hypothesis testing could be seen in the following table. table 3. hypothesis testing variable unstandarrdized coefficients standardized coefisients t sig. b std. error beta (constant) 2.304 3.088 0.746 0.456 pressure 0.323 0.071 0.279 4.539 0.000 opportunity 0.307 0.099 0.195 3.096 0.002 rationalization 0.273 0.077 0.215 3.556 0.000 academic entitlement 0.257 0.086 0.171 2.997 0.003 based on table 3, it could be seen that all variables have a sig value < 0.05, meaning that pressure, opportunity, rationalization and academic entitlement had significant influences on academic frauds. l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 62 discussion influence of pressure on academic frauds the research showed that pressure had a positive and significant effect on academic frauds. this indicated that the greater the pressure received, the greater the frauds committed by students would be. on the contrary, when the pressure received by students was low, the academic frauds they committed were also low. the pressure received put a person under a circumstance where they felt forced and urged to achieve the previously set grades, even if it required them to commit academic fraud. pressure was defined as a condition under which a person was required to be able to do something (melati et al., 2018). pressure referred to something which happened in someone‟s life which made them stressed and eventually gave birth to their motivation to commit frauds (singleton et al., 2010). the result of hypothesis testing indicated that pressure in this research became the dominant variable in influencing academic frauds. this meant that students committing academic frauds in this research were mostly influenced by pressure. hence, this research gave empirical evidence that pressure could be a factor which led students to commit academic frauds. according to karyono (2013), frauds could emerge due to financial pressure, bad habit, environment pressure, and other pressures. finance became a pressure for students since high tuition fee could be a burden for parents. for this reason, parents wanted their children to graduate as soon as possible with good grades. in addition, the large amount of assignments made students overwhelmed to finish them. written and teaching practice assignments also served as burdens in themselves for education students. to lessen these burdens, students then committed academic frauds. the analysis results showed that pressure in students was medium. this indicated that good grades, great number of assignments, scholarship, tuition fees were not necessarily regarded as pressure, rather students could also turned them into something positive such as motivation. meanwhile, the factors which might influence the pressure level in an individual were distinguished into two, namely internal and external factors. the internal factor or the factor which came from within oneself included lack of selfconfidence and lack of ability. and the external factor or the factor which came beyond oneself included parent or lecturer's demands and students‟ economic condition. financial, social and academic issues became the pressures experienced by students (burke & sanney, 2018). the level of pressure in students was influenced by several aspects. the indicator of pressure with high influence in students was lack of self-confidence, leading students to think that they would never achieve the set grades without committing some frauds. this indicated that lack of self-confidence became the pressure with greatest influence on students to commit academic frauds. lack of selfconfidence made students unsure of what they did, be it the in regard to assignments or tests, thus they were more convinced with others‟ answers and relied heavility on them. meanwhile, the pressure with lowest influence was students‟ economic. this meant that students used economic as the pressure with the least influence, as compared to other pressures. despite being the lowest pressure, economic pressure remained one of the indicators which led students to commit academic frauds. high tuition fees made students wish to finish their study as fast as they could, thus they did whatever means necesary to timely graduate from univerity, including academic frauds. the fraud triangle theory explained that pressure became a factor which drove people to commit frauds (singleton et al., 2010: 45). initially, this theory was intended for financial field, yet the research results showed that fraud triangle theory could also be used for education realm. the research results also showed that pressure became the dominant variable in influencing academic frauds. these include the pressure to be a teacher who had to master the competences needed to be a good teacher. the fraud triangle elements could be used to understand why students committed academic frauds (bujaki et al., 2019). this research result confirmed the previous study conducted by becker et al., (2006) which found that pressure had a significant effect on academic frauds. in addition, this research also supported costley's (2019) research who found that the main reason why students committed academic frauds was the pressure in the workload they had to assume. the many assignments and tests they had to finish and l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 63 take rendered students unable to focus on one work and in turn led students to commit academic frauds. in addition to the many assignments and tests they had to take, the demand for students to achieve the predetermined grades made students opt to a "shortcut” by committing academic frauds (peterson, 2019). quraishi & aziz (2017) suggested that male students felt more pressured than female students, and received greater pressure from their parents to achieve good gpas. the high standards they had to achieve made students feel stressed and commit academic frauds (tonasa & setyorini, 2019). however, this research result did not support artani (2018) who found that the level of pressure received by students did not influence their academic frauds. sasongko et al., (2019) conducted a study to accounting students of muhammadiyah university of surakarta and found that pressure had no influence on academic frauds. this was because students had no demand which required them to commit frauds. also, the low level of competition among fellow students also made the pressure have no influence on academic fraud. influence of opportunity on academic frauds the research result showed that opportunity had a positive and significant influence on academic frauds. this meant that the magnitude of opportunity to commit academic frauds that students had during teaching and learning process could encourage students to commit frauds. the greater the opportunity given, the bigger the academic frauds could be. this was because of the lack of preventive and supervisory measures taken by lecturers or the faculty that opportunity emerged for students to commit frauds. karyono (2013) stated that opportunity arose due to the weak internal control to prevent and detect frauds. also, frauds also occured thanks to weak sanction and inability to check quality. in this research, the influence of opportunity on academic frauds was ranked third. the influence of opportunity on academic frauds was 19.5%. this research still gave empirical proof that opportunity influenced frauds in students. when there was a situation which supported students to commit frauds, they would use that opportunity. singleton, et al., (2010) explained that the main factor of opportunity was internal control. when universities had weak or no internal control, this could provide opportunity to commit frauds. an example was when a lecturer gave not too different forms of questions where it could be an opportunity for students to commit frauds. students who had not taken the test would ask for answers or the questions to allow them to finish thems easily. in addition, lack of fraud detector, including plagiarism, gave more space for students to commit frauds without having to think about future risks. the research result indicated that the opportunity in students was medium. this showed that the available opportunity was sometimes used and not used at another time by students to commit frauds. the level of opportunity in students depended on how the supervision was given by lecturers and the faculty. when the given supervision was weak, students might use it as an opportunity to commit frauds. the existing opportunity gave more freedom for students to commit academic frauds. the right supervision from both the institution and lecturers could minimize this opportunity that students used to commit frauds (burke & sanney, 2018). the indicator of opportunity with highest influence was when lecturers did not modify the forms of tests or assignments given beetwen a class or group and another class or group. this indicated that students mostly exploited the opportunity when lecturers did not modify the forms of questions they gave to another class to commit academic frauds. when they had had answers or questions and answers from another class, students no longer needed to study. meanwhile, the lowest opportunity was when students were in an environment where many students committed academic frauds. thus, students did not quite frequently use this opportunity to commit academic frauds. nevertheless, being in an environment where many other fellow students committed academic frauds was still used as a condition used by students to commit frauds. in the fraud triangle theory, the internal control given by the company influenced the level of opportunity used to commit frauds (singleton et al., 2010: 45). the form of internal control in classes was the lecturers and the faculty supervised the students. when the given internal control was weak, the frauds l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 64 committed by students would be greater. students committed frauds without thinking about the risk they might receive later. this research result supported the previous study conducted by becker et al. (2006), who found that when students had the opportunity, they would more actively committed academic frauds. once students had the opportunity, they could do whatever they wanted freely. one of the opportunities used was when the test was held in a big hall which prevented the supervisor from accessing all movements of each student, allowing students to take the opportunity to commit frauds (abusafia et al., 2018). the lack of facilities given by the institution to students, such as small-sized classrooms that made the distance between one student to another so close and this could be a great opportunity which made it easier for students to commit frauds (huang et al., 2015). yendrawati & akbar (2019), revealed that the easy-toaccess sophisticated technology and lack of supervision given supported students to commit academic frauds easily. the absence of strict measures the students who committted frauds would not give a deterrent effect to fraud culprits (sasongko, 2019). hence, students would still take the opportunity to commit academic frauds. however, this research result was ddifferent from melati, et al. (2018) who found that opportunity had no influence on academic frauds. this was because when supervision was given particularly strictly students could not commit academic frauds. in addition, opportunity had no influence on academic frauds since despite the maximized supervision students could still commit academic frauds (santoso and cahaya, 2019). influence of rationalization on academic frauds the research result showed that rationalization had a positive and significant effect on academic frauds. this meant that the level of rationalization within oneself influenced the level of frauds committed. an individual with high rationalization would try to find logical excuses to justify the frauds they did. the lower the rationalization within students the lesser the academic fraud they committed. when students had high awareness that academic frauds were wrong, it was less likely for these students to commit frauds. melati et al. (2018) defined rationalization as the action to justify the behavior they did logically, even if the behavior was wrong. the hypothesis testing showed that rationalization was the second variable in affecting frauds in accounting education students. the effect of rationalization on academic frauds in this research was 21.5%. it could therefore be said that rationalization had fairly great influence on academic frauds. students were aware that committing frauds was unethical, yet the frauds might be justified using logical excuses. karyono (2013) mentioned that rationalization was done for some reasons, i.e. the culprit thought that frauds were something reasonable, they thought they had rendered a service to organization and hence they should received more rewards, and they thought that the frauds were done for a good cause. in this research, the rationalization in accounting education students was medium. it showed that sometimes students rationalized the frauds they did and sometimes they did not. the rationalization was made by students by justifying the academic frauds. students who committed academic frauds would maintain their self-image by rationalizing the frauds they did. rationalization became the reason for not following the applicable standards of ethics or norms (burke & sanney, 2018). the indicator of rationalization with high influence was to think that the frauds they did was for a good cause. it showed that students more frequently used this excuse as a rationalization of academic frauds in accounting education students. students thought that the frauds they did was for a good cause, i.e. to get good grades which could make their parents proud. the rationalization made by students was a form of lie they made to themselves and justified what they had done (albert, 2012). in addition, rationalization at the lowest level went to the indicator that the students thought that the sanction given was less strict and that the frauds harmed no one. this meant that students rarely used the reason of less strict sanction as a rationalization for their academic frauds. despite being the rationalization with the lowest use, lack of strict measure was still used as rationalization by students to commit academic frauds. l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 65 according to the fraud triangle theory, the culprit would justify the frauds they did to make themselves feel less guilty. this was because rationalization involved another fraud of lying to oneself and justifying what had been done (albercth, 2012). also, this research gave evidence that rationalization influenced academic frauds in accounting education students. students would justify the frauds they had done since it was something bad. however, students would try to make the frauds seem not too bad by rationalizing it. this research result supported becker et al. (2006) who found that rationalization had an influence on academic frauds. students would justify their frauds even if they knew that frauds were something bad. students committed academic frauds due to the rationalization factor they had within them. moreover, academic frauds were more oriented to value rationalization (krou et al., 2019). many students understood that academic frauds were wrong, yet they would still commit frauds for many reasons (singh & thambusamy, 2016). hendy & montargot (2019) suggested that students would rationalize their frauds to lessen the inconvenience about frauds which contradicted moral values. students would gave such excuses as limited time needed and fear of failing to pass as their reasons for rationalizing their academic frauds (eriksson & mcgee ,2015). scott (2017) suggested that giving excuses they thought acceptable made students keep on committing academic frauds. however, this research did not support sasongko et al., (2019) who found that rationalization had no influence on academic frauds. this was because students understood to not justify academic frauds as something good. also, rationalization had no effect on academic fraud since there were other stronger influences or variables, such as strong pressure and great opportunity, and with these students no longer needed to rationalize academic frauds (yendrawati & akbar, 2019). influence of academic entitlement on academic frauds the research indicated that academic entitlement had a positive and significant effect on academic frauds. the greater the academic entitlement they owned, the greater the academic frauds they would commit. when students‟ academic entitlement was high, they would be more demanding for their academic entitlement to be fulfilled. however, when this demand could not be satisfied, students would commit frauds to fulfill their academic entitlements. in education, academic entitlement was defined as the tendency to believe that students were entitled to obtain good grades, regardless their ability and the teaching and learning they received (stiles et al., 2017). in this research, the influence of academic entitlement on frauds was ranked in the last place. this indicated that the academic entitlement variable gave minor influence on frauds than the other variables. despite its low influence, this academic entitlement variable remained a predictor of academic frauds. students expected that they would receive academic entitlements as good grades, yet when the grades given did not go their way, students would commit academic frauds to get their academic entitlements. the indicator of academic entitlement with high influence was if students attended every meeting in a course class, they ought to get at least b grade. this indicated that the perceiption was held by more students, and when students did not get b grade, they would commit frauds to obtain the desired grade. meanwhile, the academic entitlement with the lowest score was if students had told the attempts they made, the lecturer should then give a reward. not many students held this perception to be able to influence academic frauds. when lecturers only assessed the final result without any knowledge of the process taken, students would then told the lecturer about the attempts the made and they expected to get a reward. students expected for good and fair behavior they could receive from their lecturer (mclellan & jackson, 2017). in students‟ opinion, academic entitlement should be earned, and to earn this academic entitlement, students used any means, including academic frauds. the attribution theory explained the causes behind an individual‟s behavior. later, weiner (1985) developed this attribution theory with achievement motivation and emotion. students committed academic frauds due to the academic entitlement they held. academic entitlement became the causal attribution with external locus of control dimension. students with perceived academic entitlement would think that the grades they received came from others, in this case the lecturer. this indicated that students l. savilia, n. laily/journal of accounting and business education, 5 (1), september 2020 66 wanted good grades only from their lecturers without making any attempts. chowning & campbell (2009) in their research found that external locus of control served as the key to academic entitlement. the higher the academic entitlement in students, the higher their external locus of control was. on the contrary, when students had low academic entitlement, their internal locus of control would be high. students committed academic frauds since they were reluctant to make attempts using their own ability. students only demanded to get good grades from the campus. when students got the grades below their expectation, they would go mental and then they would commit academic frauds to get their desired academic entitlements. this was in line with weiner‟s attribution theory which combined motivation and emotion by seeing the causal dimension. this research confirmed stiles et al. (2017) who found that academic entitlement had an influence on academic frauds. academic entitlement became a predictor of millenial students to commit academic frauds. students expected to receive such academic entitlements as good grades and rewards like money or prizes for good grades. due to this perception, students were encouraged to commit academic frauds (luckett et al., 2017). academic entitlement included not only sense of right in academic field they thought they were ought to obtain, rather academic entitlement was also associated with problematic behavior such as academic frauds (reysen et al., 2017). in their research, sohr-preston & boswell (2015) revealed that academic frauds served as one of academic entitlement factors. however, this research did not elias (2017) who found that academic entitlement had no influence on academic frauds. in his research, it was shown that even when students had extremely low academic entitlement, frauds remained high. conclusion the research result indicated that pressure, opportunity, rationalization and academic entitlement became triggers for accounting students to commit academic frauds. this meant that the higher the pressure, opportunity, rationalization and academic entitlement, the higher the academic frauds they might commit. meanwhile, this research had its limitation, in that the research data used google form which required fairly long time to complete, hence the researcher should more actively remind the respondents to complete the questionnaire. moreover, despite the massive number of researchers investigating academic entitlement, very rarely did they associate the academic entitlement variable with academic frauds, leading to the obstacle in the researcher‟s way in finding references. thus, based on the research which had been conducted, it was expected that students could be more confident of what they were capable of and to not commit academic frauds. also, the recommendation for future researchers interested in conducting research on the same topic is to use different method to get the data. finally, they might need to keep using the academic entitlement variable in their future research and associate it with other variables. references abusafia, a. h., roslan, n. s., mohd yusoff, d., & mat nor, m. z. 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(n.d.). the influence of the fraud triangle and islamic ethics on academic fraudulent behaviors. review of intergrative business and economics reasearch. 8(4), 441–457. issn: 23041013 a. herdiani/ journal of accounting and business education, 6 (2), march 2022 34 does corporate governance matter in decision making of stock repurchases? aulia herdiani accounting department, faculty of economics, universitas negeri malang email: aulia.herdiani.fe@um.ac.id doi: http://dx.doi.org/10.26675/jabe.v6i2.24116 abstract: this research highlights the stock repurchase motivation in indonesia and the influence of corporate governance on stock repurchase decision making. each country has different motivations to repurchase stocks, in which there are six stock repurchase hypotheses. this research also examined the interaction influence of both mechanisms. the market was observed in 6-7 years after melting down the events in 2008-2009. the stock repurchase data were manually collected from the corporate events issued by the companies. the test was conducted based on two corporate governance mechanisms (internal and external mechanisms) which have different tendencies in the corporate governance supervision system. based on the analysis results, the stock repurchases in indonesia was motivated to maintain the sustainability of shareholders’ authority, especially due to the fluctuating economic conditions signaling the market valuation. jel classification: g34, g35 article history received: 18 september 2021 revised: 21 january 2022 accepted: 1 february 2022 keywords corporate payout, stock repurchase, corporate governance citation: herdiani, a. (2022). does corporate governance matter in stock repurchase decision making?. journal of accounting and business education, 6(2), 34-40. introduction the focus of this research was to examine the influence of corporate governance on stock repurchase decision making. the previous studies showed that the repurchase sharing decision tended to be different due to the company's performance and how the board understood the company's situation and then planned solutions. in addition, companies in different countries tended to have different motivations to repurchase their shares. for example, franks et al. (2017) conducted a study in japan where the dominant motivation in repurchasing the company’s shares was to restructure the ownership and improve the management quality from the possibility of undirected outside shareholders. on the other hand, the shares repurchased by the us-based companies tended to create financial concessions for the corporate overpayments. furthermore, companies disguised their financial difficulties by reducing their capital (lee et al., 2017). we are interested in exploring the situations in which share repurchases are made and the company is managed with certain mechanisms, both internally and externally, so that the share repurchases should be made, especially by the companies in indonesia. we tried to analyze the determinants of share repurchases measured with the market share values repurchased in the market capitalization around the share repurchase announcements. journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v6i2.24116 a. herdiani/ journal of accounting and business education, 6 (2), march 2022 35 many previous studies found that internal and external corporate governance played different roles as oversight and stabilization mechanisms. internal mechanisms tended to work according to what made the companies stable, either by covering up their problems or by immediately expanding the announcement of the current state, while external mechanisms tended to reveal the company's performance and operation based on legal terms (caton et al., 2016; lie & yang, 2018). therefore, this study emphasizes how each corporate governance mechanism leads to different share repurchase schemes in indonesia. this research has contributed to the stock repurchase and corporate governance literature where the tests were separately performed in both internal and external mechanisms. the role of each mechanism in corporate governance were examined based on the stock repurchase motivation. most previous studies tested whether or not the companies overperformed or underperformed during the stock repurchase period. therefore, this study examined the public sentiment and company policies in the related period. this research is expected to provide a comprehensive analysis on how corporate governance affects the stock repurchase policies. capital market activity uncertainly moved the outside investors although they should actually not move. understanding the fundamental aspects of companies and capital market attributes to make the appropriate decisions. due to the stock repurchase, investors were required to analyze the motivations associated to the corporate events. therefore, this study revealed the motivation of companies in indonesia in making stock repurchases. furthermore, the influence of internal and external corporate governance mechanisms on the decision to make stock repurchases, as well as the interaction influence of these two mechanisms on the decision making. literature review the motives underlying the decision to withdraw shares varied based on the company's performance and how the board considered the policy. companies might perform well or poorly, yet the motives to repurchase shares were not limited to the ideal conditions (lee et al., 2017). wansley et al. (1989) discussed six motivations considered as motives to repurchase the shares: 1) replacing dividends or as a substitute for cash dividends; 2) improving the capital structure by optimizing the company's leverage; 3) reissuing shares when the executive incentives need to be provided; 4) taking advantage of the available cash flows due to the lack of prospective investment opportunities; 5) indicating possibility that the company is undervalued; and 6) transferring wealth from the participating to non-participating shareholders as a method to restructure the ownership components. although, the reason is for share repurchases, corporate governance studies and post-share repurchases have been widely studied, yet what drives management to repurchase shares is still limited. earning management generally occurs around the corporate events. the managers tend to exploit the public reactions to obtain positive abnormal returns even though they need to polish the financial information. the previous studies have reported that stock repurchases abnormally increased stock prices (cudd et al., 1996; born et al., 2004; chandren et al., 2015). the investors' perspective on company performance will be influenced by the information implicitly published through the share repurchase announcements. cash dividends can convince the market that the company is doing well, but this policy tends to ignore the managers. for example, company payments through cash dividends reflect the conditions which can negatively affect the management incentives (chen & lee, 2017). because they have provided a positive signal to the market, the dividends are paid and taxed regularly, while the capital reductions through the share repurchases are not taxed and change the cash flow available for investment, by increasing the managerial incentives. in addition, the stock repurchased from the market can be distributed to employees as incentive for their excellence performance, regardless of whether they receive it or not. one motive to repurchase shares is to optimize the company's performance by reducing the blockholders. a more in-depth study reported by chen et al. (2011) explaining that most companies in china are state-owned companies, gan (2017) further reported that the intervention of most government a. herdiani/ journal of accounting and business education, 6 (2), march 2022 36 ownership can lead to inefficiency of company performance, yet these companies tend to have more stable dividend payout policies (gugler, 2003). state-owned companies, in some cases, are also considered managers-controlled companies when the managers were previously the members of government and potentially create the principal-agent problems. in addition, gugler (2003) reported that companies with high centralized ownership can be understood failure to control the company's financial system. by observing the share repurchases in japan, franks et al. (2017) argued that the increasing firm ownership can also protect the firms from uncertain management of the outside shareholders and bring stability during the financial difficulties. share repurchases can reduce the blockholders and be a positive signal for the market. the research conducted by chen and lee (2017) reinforced the fact that corporate governance played an important role in repurchasing shares. previous research reported that better-managed companies tended to concern more on both internal and external shareholders. companies with dualism tended to repurchase shares in managing the flow of wealth and transferred them to the company members (chen & lee, 2017), so that the possibility of the arising agency problems is high. although corporate dualism can lead to negative responses from the market and shareholders, it can be mitigated by empowering the independent board members. however, the higher the presence of an independent board, the less the company spends the capital expenditure. therefore, the corporate governance component is pointed in a different direction in response to the share repurchases. the corporate payout policy cannot be performed unless both parties agree, although most of the time, the dominant corporate action is made due to the insider assistance. the management will highly consider actions to maximize the value of company and share repurchases will improve the company's stock performance. stock performance will also emerge when the company has a proper monitoring from the outside mechanisms, either from blockholders or independent boards. on the other hand, even though a company is led by competent managers and a member of the board of directors or president director, the market will respond negatively. methods the data required in this study were obtained from the companies listed on the indonesia stock exchange announcing share repurchases in 2015-2018, 6-7 years after the melting-down events in 20082009 to maintain stability after the global crisis (reinhart & rogoff, 2014). we limited the data by excluding the companies in the financial industry. the data were taken from the osiris database. this study used the market value of shares repurchased on the market capitalization to measure the company's payment from the share repurchase (sr) events. we also collected the data related to the motivation of companies to repurchase shares by collecting the corporate news around the corporate event of stock repurchase and annual reports. sr was influenced by loss as a dummy variable defined as 1 for companies reported having negative net income in the previous fiscal year, and 0 if the sr was not made to resolve the financial difficulties (altman, 1986; brochet, 2010). for data analysis, ols was conducted to observe how the internal and external mechanisms of corporate governance played a role in making the share repurchase decisions. furthermore, we also examined the interaction influence of two mechanisms to determine whether or not the share repurchase decisions equally accommodated both mechanisms. we tested our hypothesis with the regression analysis using the following equation: this study measured the internal mechanism of share repurchase events using board structure, ownership structure, capital expenditure, and dividend payout policy, while the external mechanism was measured using capital market supervision, investor type, and public sentiment. in addition, we included firm size, book leverage, takeover, and tax (caton et al., 2016) as control variables. a. herdiani/ journal of accounting and business education, 6 (2), march 2022 37 results and discussion data description the research data were taken from the companies repurchased the shares in 2016-2018. there were 52 share repurchase events in the related period, but there were only 22 events completing the data could be obtained, especially the disclosure of reasons for implementing the share repurchases by the concerning companies. table 1 presents the description of data used in this study. most companies repurchased the shares in the period of 2016-2018 due to the poor stocks or company performance (hypothesis 5). these happened due to the unstable market conditions in 2017 or significant stock price fluctuations. many companies eventually anticipated this by withdrawing their shares to maintain a fair share value so that the value for shareholders and their trust were well maintained. the share repurchase performance was measured using the stock performance to figure out how much the companies withdrew their shares from those circulating in public. of companies making the share repurchases during the related period, most of them made massive share withdrawals. the average number of shares repurchased started from 21.29% to 57.54% of the outstanding shares and based on the review on the companies’ annual reports. some companies planned to hold their shares for 3 years before releasing them once again to the capital market. table 1. research data description variable min mean max std kurtosis skewness hypothesis 2 5 (fashion) 6 1.4572 -1.2366 -0.3605 buyback 0.0288 0.2129 0.5754 0.1455 0.0829 0.7642 %ind 4.6512 19.3588 33.3333 8.7690 -0.9658 -0.0488 %indcomp 0 5.2652 25 9.1337 0.1567 1.3459 bsize 9 20.2272 49 10.6901 1.5322 1.4064 block 0 0.5455 1 0.5096 -2.1682 -0.1962 duo 0 0.8182 1 0.0842 1.2496 -1.7732 div 0 0.8636 1 0.3513 3.4981 -2.2776 firm size 19.7621 22.7211 27,4104 1.7259 1.8064 0.7727 loss 0 0.1364 1 0.3513 3.4981 2.2776 tax 0.0002 0.2525 0.8253 0.1921 2.5908 1.1977 furthermore, the internal mechanism of corporate governance in this study was measured using bsize, %ind, %indcomp, duo, blockholder, and dividend payout. most companies in this study had 23 board directors with the largest number of 49 people. from a total of 22 corporate events, the average number of independent directors was 19.3588% (%ind), while the independent parties as the board members in the compensation section were only 5.2652% (%indcomp). this meant that the company's payout policy decisions still predominantly depended on internal conditions and decisions. some companies used in this study had the blockholders as shareholders (blockholder=0.5455) and mostly had a ceo and the other divisions (duo=0.8182). in addition, the companies used as samples in this study distributed cash dividends before the implementation of share repurchases. this indicates that the share repurchases in indonesia were not made to avoid the distribution of dividends or the first hypothesis of share repurchase in accordance with the result of research conducted by wansley et al. (1989). furthermore, in testing the hypothesis, this study used firm size, loss, and tax as control variables. most companies used as the samples in this study had an average total asset of idr a. herdiani/ journal of accounting and business education, 6 (2), march 2022 38 51,343,072,309,8571. this was also reinforced by the fact that most companies did not suffer losses in the previous period (average loss of 0.1364) and the tax paid by the companies in the previous year was quite large with an average percentage of ebit reaching 25.25% and some others even reached 82.53%. correlation test results table 2 presents the correlation test results of related to the variables used in this study. from table 2, it can be clearly seen that bsize, %indcomp, duo, div, firm size had a negative correlation with the decision to implement the share repurchases. in other words, the more the number of board of directors, independent commissions in the compensation section, ceo with other positions and larger company, the smaller the possibility of implementing the share repurchase policy as a dividend payout. in addition, the cash dividend payment in the previous period also indicates that the possibility of implementing the share repurchase as a substitute for lower cash dividend payment (div = -0.6025). table 2. correlation test buyback bsize %ind %ind comp block duo div loss firm size tax hypot hesis buyback 1 bsize -0.1156 1 %ind 0.1799 -0.1598 1 %indcomp -0.4062 0.3891 -0.0307 1 block 0.1693 0.0810 0.1736 -0.0155 1 duo -0.1992 0.0780 0.2519 0.2781 -0.1936 1 div -0.6025 0.2116 0.0430 0.2344 -0.3627 0.1561 1 loss 0.2194 0.1562 -0.4342 -0.0489 -0.1693 0.1873 -0.2281 1 firm size -0.3043 0.5633 0.2761 0.3573 0.1404 0.2642 0.2819 -0.0657 1 tax 0.2532 0.1678 -0.3908 -0.0251 0.0640 -0.0185 -0.1450 0.2358 -0.4236 1 hypothesis 0.3818 -0.1396 -0.4102 -0.4531 0.0874 -0.4515 -0.4271 0.3341 -0.2033 0.3060 1 on the other hand, the amount of tax (0.2532) and the loss in the previous period (0.2194) could motivate the management to repurchase shares, where this correlation also applied to the reasons for companies in indonesia to repurchase shares. supported by andriosopoulos and lasfer (2015), it was interesting that the existence of an independent commission in the board of directors and the compensation section equally had a strong correlation to the reasons for repurchasing shares but in different directions. therefore, there was no restriction on the attributes of capital market activities. hypothesis testing results table 3 presents the research data analysis results to figure out how the internal mechanisms of corporate governance affected the decision to repurchase shares (hypothesis) and how the performance of company's shares during the repurchase period was. from the analysis results, it could be seen that the more independent committees on the board of directors, the better the stock performance in the repurchase period. this could be seen from the %ind test results with the t-stat of 2.6679 and p-value of 0.0205. similar results were also obtained from testing the company's cash dividend payout policy. from the data analysis results, it could be seen that the company distributed cash dividends before the repurchase period. furthermore, by examining the reasons for implementing share repurchases, it was found that when a company had a ceo with other positions, the company tended to repurchase the shares to improve the company's capital structure and or to implement the share incentives for managerial (t-stat duo = a. herdiani/ journal of accounting and business education, 6 (2), march 2022 39 2.1867 with p-value 0.0493). on the other hand, the larger the company, the implementation of share repurchases tended to be based on the interests by increasing more profitable investment opportunities and or maintaining the shareholders’ trust. table 3. data analysis results buyback hypothesis -0.5014 -5.6230 intercept (0.9873) (-1,6671) 0.0027 -0.0385 bsize (0.7524) (-1.6434) 0.0099 -0.0289 %ind (2.6679)** (-1.1676) -0.0032 -0.0343 %indcomp (-1.0405) (-1.6765) -0.0347 -0.2214 block (-0.5992) (-0.5748) -0.0977 -1.1155 duo (-1.2724) (-2.1867)** -0.1977 -0.8345 div (-2.3236)** (-1.4765) 0.1204 0.5885 loss (1.3567) (0.9988) -0.0137 0.3624 firmsize (-0.5529) (2.2032)** 0.1861 2,2960 tax (1.0573) (1.9643)* adj-r2 0.4274 0.4651 f-test 2.7418** 3.0290** conclusion the previous studies suggested that there were six hypotheses of companies repurchasing shares and those in different countries had different characteristics or reasons for repurchasing shares (wansley et al., 1989; lee et al., 2017). in indonesia, most share repurchases were made because the companies wanted to maintain the shareholders’ trust when the economic conditions were unstable. so, it was predicted that the companies’ share values would decline. in addition, for larger companies, they tended to do so to improve the capital structure and held their treasury shares of no more than 3-4 years before releasing them back to the stock market. in assessing the performance of stock prices during the repurchase period, the existence and role of an independent commission in the board of directors and the cash dividend payout policy will determine both shares to withdraw and market to assess the performance of company shares. the percentage of shares institutionally owned by the inside parties and the corporate governance external mechanisms will still be tested in this study in the following test. due to limited time and data, the collected samples were greatly limited, so that in the next test, the research samples will be further added. references altman, e.i., 1968. financial ratios, discriminant analysis and the prediction of corporate bankruptcy. the journal of finance, 23(4), pp.589-609. https://doi.org/10.2307/2978933 a. herdiani/ journal of accounting and business education, 6 (2), march 2022 40 andriosopoulos, d., & lasfer, m. (2015). the market valuation of share repurchases in europe. journal of banking & finance, 55, 327-339. http://dx.doi.org/10.1016/j.jbankfin.2014.04.017 born, p., giaccotto, c. and ritsatos, t., 2004. the wealth and information effects of insurers' open market stock repurchase announcements. risk management and insurance review, 7(1), pp.25-40. https://doi.org/10.1111/j.1098-1616.2004.00034.x brochet, f., 2010. information content of insider trades before and after the sarbanes‐oxley act. the accounting review, 85(2), pp.419-446. https://doi.org/10.2308/accr.2010.85.2.419 caton, g.l., goh, j., lee, y.t. and linn, s.c., 2016. governance and post-repurchase performance. journal of corporate finance, 39, pp.155-173. https://doi.org/10.1016/j.jcorpfin.2016.02.005 chandren, s., ahmad, z. and ali, r., 2015. corporate governance mechanisms and accretive share buyback to meet or beat earnings per share forecast. international journal of business and society, 16(3). https://doi.org/10.33736/ijbs.572.2015 chen, n.y. and lee, t.k., 2017. transferring shares to employees or directors: exploring the effect of board duality on share repurchase in taiwan. asian journal of business and accounting, 5(1). chen, s., sun, z., tang, s. and wu, d., 2011. government intervention and investment efficiency: evidence from china. journal of corporate finance, 17(2), pp.259-271. https://doi.org/10.1016/j.jcorpfin.2010.08.004 cudd, m., duggal, r. and sarkar, s., 1996. share repurchase motives and stock market reaction. quarterly journal of business and economics, pp.66-76. franks, j.r., mayer, c.p., miyajima, h. and ogawa, r., 2018. stock repurchases and corporate control: evidence from japan. rieti. gan, c., bian, c., wu, d. and cohen, d.a., 2017. determinants of share returns following repurchase announcements in china. https://doi.org/10.21511/imfi.14(2).2017.01 gugler, k., 2003. corporate governance, dividend payout policy, and the interrelation between dividends, r&d, and capital investment. journal of banking & finance, 27(7), pp.1297-1321. doi:10.1016/s0378-4266(02)00258-3 lee, c.j., lai, s.c., li, h.c. and wang, j.c., 2017. capital reduction, financial characteristics and corporate governance. asia pacific management review, 22(2), pp.88-96. https://doi.org/10.1016/j.apmrv.2016.07.004 lie, e. and yang, k.d., 2018. board independence and corporate spending. available at ssrn 3167493. reinhart, c.m. and rogoff, k.s., 2014. recovery from financial crises: evidence from 100 episodes. american economic review, 104(5), pp.50-55. doi: 10.1257/aer.104.5.50 wansley, j.w., lane, w.r. and sarkar, s., 1989. managements' view on share repurchase and tender offer premiums. financial management, pp.97-110. https://doi.org/10.2307/3665652 m.a.rafsanjani,e.d.rahmawati/journal of accounting and business education, 3 (2), march 2019 162 stress exposure and psychological well-being: study on beginning teacher mohamad arief rafsanjani 1 , etika dhewi rahmawati 2 2sma negeri 1 turen, malang, indonesia email: mohamadrafsanjani@unesa.ac.id doi: http://dx.doi.org/10.26675/jabe.v3i2.5757 abstract: a beginning teacher is someone who has just started his/her career as a teacher or someone who has just graduated from college and is working as a teacher. this transition from student to worker (as a teacher) is a critical period since it is often associated with stress (dicke et al., 2015; smith and ingersoll 2004). this study examines the relationship between stress exposure (seen from stress exposure in class and outside class) and the psychological well-being of beginning teachers (seen from work enthusiasm and emotional exhaustion). this study is conducted on 325 beginning teachers of senior high schools in malang as samples collected using a random sampling technique. the data are analyzed by using a structural equation modeling (sem). the results show that stress exposure in class and outside class has negative effect on work enthusiasm but, on the other hand, had positive effect on emotional exhaustion. this shows that stress exposure has significant effects on beginning teachers’ psychological well-being. keywords: beginning teacher, stress exposure, psychological well-being introduction stress experienced by teacher is a continuously developing problem in many countries (clunies‐ ross, little, and kienhuis 2008), which will affect individual’s psychological performance and wellbeing (kyriacou 2001; duygulu et al., 2013). similarly with teacher profession, teacher’s psychological well-being influences teacher’s quality and students’ learning motivation and achievement (arens and morin 2016; klusmann et al., 2008; klusmann, richter, and lüdtke 2016; shen et al., 2015). this shows that teacher’s psychological well-being is an important factor to support learning success. moreover, some researches also state that teacher’s low psychological well-being will inhibit creation of optimal learning environment, consequently, students’ satisfaction of school, involvement, and achievement will decline (arens and morin 2016; klusmann, richter, and lüdtke 2016; shen et al., 2015). this reconfirms that teacher’s psychological condition, in this case psychological well-being, needs special attention from all of us. some previous researches on teacher’s psychological well-being study have revealed that teacher’s psychological well-being is influenced by stress exposure they experience in conducting their journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ 1department of economic education, faculty of economic, universitas negeri surabaya, indonesia http://dx.doi.org/10.26675/jabe.v3i2.5757 m.a.rafsanjani,e.d.rahmawati/journal of accounting and business education, 3 (2), march 2019 163 duties (van droogenbroeck, spruyt, and vanroelen 2014; pomaki et al., 2010; skaalvik and skaalvik 2011). however, three is no specific study on beginning teacher’s psychological well-being. beginning teacher is someone who has just started his/her career as teacher after graduation. this period (early period of profession as teacher) puts them in a critical time, a transitional phase from a student to worker (as a teacher), and is frequently associated with high extent of stress they experience (dicke et al., 2015; smith and ingersoll 2004). on the other hand, the results of field observation conducted by the researcher show that most of these beginning teachers are assigned with more teaching responsibilities than their seniors. this shows how much responsibility such beginning teachers should bear, particularly related to students’ achievement (learning outcome), while, on one hand, teacher’s psychological well-being is influenced by stress exposure and influences students’ motivation and learning outcome (keller et al., 2014; kunter et al., 2013). therefore, it is important to study further about psychological well-being of beginning teachers in relation to stress exposure they experience. literature review and hypotheses teachers’ working well-being, in this case from the perspective of psychological well-being, is a condition when they are in an optimal condition of psychological functions related to their work as teacher (ryan & deci, 2000). this condition is reflected in their enthusiasm for teaching (kunter et al., 2008). the concept of teacher enthusiasm is really close to the construct of individual interest (krapp 2002; renninger 2000). enthusiasm represents typical, habitual and repeated emotions (pekrun 2006) and, more specifically, reflects the level of enjoyment, excitement and pleasure teachers experience in their profession (kunter et al., 2008). these positive emotions are reflected in their teaching quality and also influence students’ motivation and learning outcome (keller et al., 2014; kunter et al., 2013). on the other hand, to achieve optimal psychological function, in this case psychological wellbeing, a teacher needs low emotional exhaustion, in which emotional exhaustion refers to stress dimension, including individual’s suspense and declining level of patience as the result of his/her work or profession which eventually leads him/her to avoid his/her work, both emotionally and cognitively (maslach, schaufeli, and leiter 2001). emotional exhaustion describes excessive and exhausted emotional feeling of work. its manifestations are physical exhaustion, and exhausted psychological and emotional condition (wright and cropanzano 1998), like feeling desperate, depressed, irritable, frustrated, and sad. in job demands-resources model, stress exposure greatly influences individual’s psychological well-being (demerouti et al., 2001). causes of stress (stressors) are used to explain individual’s working well-being. stressor is part of work, which is frequently associated with psychological load (demerouti et al., 2001). stress is regarded a consequence when any stressor is beyond the ability to handle. stressor is something important used to predict psychological well-being (siegrist et al., 2004). in relation to teacher profession, the stressors are derived from in or outside class. the most dominant stressor in class is interaction between teacher-students (pyhältö, pietarinen, and salmela-aro 2011), particularly with regard to students’ behavior and disciplinary infringement (fernet et al., 2012; skaalvik and skaalvik 2010). students’ low motivation and conflict between teacher-students also have negative effect on teacher’s work enthusiasm and eventually raise their emotional exhaustion (gastaldi et al., 2014; kyriacou 2001). based on this, the researcher assumes that stress exposure in class negatively influences work enthusiasm, and positively influences emotional exhaustion (hypothesis 1 and 2). stressors outside class are commonly related to interaction with colleagues (kyriacou 2001; pyhältö, pietarinen, and salmela-aro 2011). in addition, colleagues’ social support and positive working climate are the main factors to influence individual’s psychological well-being. good relationship with colleagues and positive working condition has positive relationship with teacher’s work enthusiasm and, on the contrary, bad interaction with colleagues and non-conducive working climate have teacher’s emotional exhaustion increased (van droogenbroeck, spruyt, and vanroelen 2014; pomaki et al., 2010; m.a.rafsanjani,e.d.rahmawati/journal of accounting and business education, 3 (2), march 2019 164 skaalvik and skaalvik 2011). based on this, the researcher assumes that stress exposure outside class negatively influences work enthusiasm and positively influences teacher’s emotional exhaustion (hypotheses 3 and 4). this research reviews the relationship between stress exposure and teacher’s psychological wellbeing. furthermore, the researcher employs stress exposure in class and stress exposure outside class as latent exogenous variables (predictors); and work enthusiasm and emotional exhaustion as latent endogenous variables (outcomes). figure 1: relationship between variables according to figure 1, the hypothesis is explained below: h1: there is negative relationship between stress exposure in class and work enthusiasm h2: there is positive relationship between stress exposure in class and emotional exhaustion h3: there is negative relationship between stress exposure outside class and work enthusiasm h4: there is positive relationship between stress exposure outside class and emotional exhaustion methods sample this research is conducted in malang municipality and malang regency and takes beginning teachers of private and state senior high schools (sma) who have graduated their bachelor degree (s1) in the last three years (2015 – 2017) as its samples. based on the data of dapodik, directorate general of elementary and middle education, ministry of education and culture, there are 923 teachers who graduate in the period (beginning teachers), and this research randomly takes 325 of them as samples. instrument the stress exposure in this research is viewed from stressor in class and stressor outside class. stressor in class emphasizes on teacher-students interaction relationship (pyhältö et al., 2011), students’ behavior (fernet et al., 2012; skaalvik & skaalvik, 2010) and conflict between teacher-students (gastaldi et al., 2014; kyriacou, 2001), measured using instrument adapted from the student–teacher relationship scale (pianta, 2001) consisting of 4 items (“i have warm and enjoyable relationship with students”, “my students do not hesitate to talk about anything related to academic or non-academic matters to me”, “dealing with students exhausts my energy and my mind”, “my students get embarrassed and obedient when i warn them”). meanwhile, stressor outside class emphasizes on interaction with colleagues (kyriacou, 2001; pyhältö et al., 2011), and working climate (pomaki et al., 2010; skaalvik & skaalvik, 2011; van droogenbroeck et al., 2014) measured with instrument developed by (van droogenbroeck et al., 2014) consisting of three items (“when encountering difficulty (related to work), i get my colleagues’ support/assistance”, “i have really close relationship with my colleagues, like that of a family”, “the stress exposure in class (seic) work enthusiasm (we) stress exposure outside class (seoc) emotional exhaustion (ee) m.a.rafsanjani,e.d.rahmawati/journal of accounting and business education, 3 (2), march 2019 165 working atmosphere here is positive and supports my teaching-learning activities”). all of the items use interval scales from 1 = strongly disagree to 5 = strongly agree. teacher’s psychological well-being is viewed from two indicators: work enthusiasm and emotional exhaustion. the work enthusiasm indicator is measured using instrument developed by (kunter et al., 2008) consisting of two items (“i am teaching quite enthusiastically”, “i enjoy working as teacher very much”). meanwhile, the emotional exhaustion indicator is measured using the instrument maslach burnout inventory – educators survey (mbi-es) developed by (maslach, jackson, & leiter, 1997) consisting of four items (“i feel tired after working today”, “i feel exhausted after work”, “i am really discouraged from working today”, “i feel tired and hesitate to wake up this morning only to have my work routine at school”). all of the items use interval scales from 1 = strongly disagree to 5 = strongly agree. data analysis the research’s data are analyzed using sem (structural equation modeling) with amos 22 program. besides analyzing the relationship between latent variables (stress exposure and psychological well-being), we also want to ensure that the manifest variables (indicators) we use to measure the latent variables are appropriate (confirmatory factor analysis). results the results of data analysis using amos 22 show that they are developed in fulfillment of the goodness-of-fit criteria (gfi = 0,951; agfi = 0,927; rmsea = 0,055; see figure 2). in addition, all of the (manifest) indicators used to measure the latent variables (seic, seoc, we & ee) are statistically significant (see appendix 1), and the convergent validity (loading factor) value of each indicator is above 0.70 (see appendix 2), which means that the indicators are valid. the results of reliability test (construct liability/cr) show that all constructs of latent variables have value > 0.70 (see appendix 3), which means that they have high reliability (ghozali, 2014). figure 2. regression coefficients table 1. output of unstandardized regression weights estimate s.e. c.r. p label we <--seic -.270 .067 -4.058 *** ee <--seic .112 .030 3.756 *** we <--seoc -.360 .069 -5.197 *** ee <--seoc .136 .034 3.975 *** source: researcher’s processed data (2018) m.a.rafsanjani,e.d.rahmawati/journal of accounting and business education, 3 (2), march 2019 166 the data analysis results in table 1 above show that the first hypothesis, which is there is negative relationship between stress exposure in class and work enthusiasm, is declared acceptable (b = -0.270; p < .001), which means that the stress the teachers experience lowers their work enthusiasm. the second hypothesis, which is there is positive relationship between stress exposure in class and emotional exhaustion, is also acceptable (b = 0.112; p < 0.001), which means that the stress the teachers experience in class raises emotional exhaustion. the third hypothesis, which is there is negative relationship between stress exposure outside class and work enthusiasm, is declared acceptable (b = -0.360; p < .001), which means that when a teacher is under stress outside class, his work enthusiasm will be lowered. meanwhile, the fourth hypothesis, which is there is positive relationship between stress exposure outside class and emotional exhaustion, is also acceptable (b = 0.136; p < 0.001). this shows that stress outside class raises teacher’s emotional exhaustion. discussion relationship of stress exposure in class with work enthusiasm and emotional exhaustion the data analysis results show that there is negative relationship between stress exposure in class and work enthusiasm (b = -0.270; p < .001; see table 1), which means that stress the teachers experience in class has teachers’ work enthusiasm lowered. in addition, the data analysis also show positive relationship between stress exposure in class and emotional exhaustion (b = 0.112; p < 0.001), which means that stress exposure the teachers experience in class raises their emotional exhaustion. the findings of this research also show that stress in class is frequently caused by students’ behavioral and disciplinary problems during class, students’ low learning motivation in class and poor relationship between teacher and students. these have teachers discouraged from going to and teaching in such class in comparison to other classes. besides lowering work enthusiasm, this also raises teachers’ emotional exhaustion. the results of this research support previous findings that stress in class is dominantly caused by poor (interaction) relationship between teacher and students because of students’ disciplinary problem and students’ motivation during class, which eventually have teacher’s work enthusiasm lowered and emotional exhaustion raised (gastaldi et al., 2014; kyriacou, 2001; fernet et al., 2012; skaalvik & skaalvik, 2010; pyhältö et al., 2011). teacher’s lowered work enthusiasm and raised emotional exhaustion are the consequence of poor teacher-students relationship and related to transitional period from student to worker as teacher (beginning teacher). these also conform to the finding of previous researches that transitional period beginning teachers experience is frequently related to their high extent of stress (dicke et al., 2015; smith & ingersoll, 2004). therefore, a teacher, particularly beginning teacher, needs to maintain good relationship with students by, for example, understanding students’ character in order to communicate and give them disciplinary and motivational guidance and to strengthen their teacher-students relationship. when this occurs, there will be no more students’ disciplinary infringements and low learning motivation in class, thus the teacher will be teaching more enthusiastically and eventually have their emotional exhaustion lowered. relationship of stress exposure outside class with work enthusiasm and emotional exhaustion the data analysis results show negative relationship between stress exposure outside class and work enthusiasm (b = -0.360; p < .001; see table 1), which means that when a teacher is under stress outside class, his/her work enthusiasm will decline. in addition, the data analysis results also show positive effect of stress exposure outside class on emotional exhaustion (b = 0.136; p < 0.001; see table 1). this shows that stress outside class experienced by teacher will raise his/her emotional exhaustion. stress exposure outside class is frequently caused by poor relationship with colleagues, particularly with seniors. besides, working atmosphere also contributes to a teacher’s stress, that when in a non-conducive environment like no support from colleagues, a teacher will no longer be comfortable with working (come m.a.rafsanjani,e.d.rahmawati/journal of accounting and business education, 3 (2), march 2019 167 to school) and will even be reluctant (unwilling) to work, which is one indicator of a teacher’s declining work enthusiasm. the same also occurs in regard to emotional exhaustion. when a teacher has poor relationship with any colleague and uncomfortable working climate (atmosphere) (no support from colleagues), he/she will have his/her patience declining (maslach, schaufeli, and leiter 2001), feel despair, depressed, irritable, frustrated and sad (wright and cropanzano 1998), which are signs that his/her emotional exhaustion increases. the research findings reconfirm previous researches that the reason of stress experienced by teachers comes from outside class, commonly related to relationship with colleagues and working climate, which eventually leads to their declining work enthusiasm and increasing emotional exhaustion (kyriacou, 2001; pyhältö et al., 2011; pomaki et al., 2010; skaalvik & skaalvik, 2011; van droogenbroeck et al., 2014). poor relationship with colleagues is also related to the adaptation process as a teacher from a student. this confirms previous finding that transitional period from student to worker (beginning teacher) is frequently associated with high extent of stress (dicke et al., 2015; smith & ingersoll, 2004). therefore, a beginning teacher should adapt to work environment, particularly in maintaining good relationship with colleagues in order to create a positive work environment, which will raise his/her work enthusiasm and emotional exhaustion. conclusion the results of this research show that stress exposure in class and outside class significantly influences teachers’ psychological well-being from the perspective of work enthusiasm and emotional exhaustion. moreover, stress exposure in class and outside class negatively influences teacher’s work enthusiasm but, on the other hand, positively influences emotional exhaustion. the results of this research prove that beginning teachers are in a critical period for having stress since they are in a transitional phase and, therefore, need appropriate policy related to assignment (of duties), support and positive working climate as preventive measures for them to work smoothly and as realization of their psychological wellbeing. this research is conducted quantitatively and has not revealed in detail the stress the beginning teachers experience, both in and outside class. this allows different stressors between one school and another. therefore, the researcher suggests future researchers to reexamine the results of this research using different method (qualitative) in order to reveal in more detail stressors beginning teachers experience. references arens, a. k., & morin, a. j. s. 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(1998). emotional exhaustion as a predictor of job performance and voluntary turnover. journal of applied psychology, 83(3), 486–493. https://doi.org/10.1037/00219010.83.3.486 sample instrument data analysis source: researcher’s processed data (2018) relationship of stress exposure in class with work enthusiasm and emotional exhaustion relationship of stress exposure outside class with work enthusiasm and emotional exhaustion s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 61 the accountability of business entity with sadaqah concept in the frame of eling sangkan paraning dumadi selfiah 1 iwan triyuwono 2 yeney widya prihatiningtyas 3 1 accounting department, sekolah tinggi ilmu ekonomi asia, indonesia 2 accounting department, faculty of economics and business, universitas brawijaya, indonesia 3 accounting department, faculty of economics and business, universitas brawijaya, indonesia email: selfiahasyim@gmail.com doi: http://dx.doi.org/10.26675/jabe.v6i1.9999 abstract: this research aims at formulating the concept of accountability of business entity based on islamic spiritual values. the islamic-spiritualist methodology is greatly needed to promote this research‟s objective. the mutually integrated physical endeavor (il) and spiritual endeavor (ib) were used to collect, reduce, analyze data and formulate the concept. metaphor of salah movements was used to analyze physical empirical data and spiritual empirical data. the research result shows that the accountability of business entity with sadaqah concept aims at trapping the stakeholders (humans) in spiritual consciousness by “maximizing sadaqah”, representing the spiritual accountability of business entity management. the spiritual value of love internalized in the concept of spiritual accountability may stimulate other spiritual values (such as: itsar (altruism), volunteerism, willingness, righteousness, honesty, and justice values), thus it may promote the welfare of all stakeholders (god, human, and nature) through distribution of added material (monetary and non-monetary), psychological, and spiritual values. the result of this research may be taken as the base to build sharia accounting concept and theory. in addition, this research may also stimulate stakeholders‟ (human) behavior based on spiritual values, particularly spiritual value of love. article history received: 24 october 2019 revised: 6 february 2021 accepted: 25 february 2021 keywords accountability, islamicspiritualist, spiritual values, metaphor of salah movements introduction the sharia business entities developing in indonesia are not yet fully based on tauhid (oneness of god), that is to have godly values, from transcendent (base), permanent (concept), to immanent (practice). islamic perspective is needed (rahman, 1998; rizk, 2008) as the foundation in organizing a sharia business entity. one of which is to shift the paradigm from conventional utilitarian economy to islamic economy (presley & sessions, 1994; zaman, 2009). islam brings changes to all fields and forms civilization since it teaches three values (sunanto, 2014), namely: (1) islam teaches the existence of the afterlife which is associated with the worldly life; (2) islam teaches its followers to be responsible for their citation: selfiah, s., triyuwono, i., prihatiningtyas, y, w. (2021). the accountability of business entity with sadaqah concept in the frame of eling sangkan paraning dumadi. journal of accounting and business education, 6 (1),61-74 journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v6i1.9999 s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 62 own afterlife fate; (3) islam teaches social and state life rules in the horizon of solidarity life of muslim throughout the world. maximization of economic man‟s utilitarian, rational behaviors in islamic economy is replaced by “homo-economicus-islamicus” (al-zarqa, 1980) of which consumer‟s behaviors are restricted by “moral filter” and redefines self-interest extending to the afterlife interest (chapra, 1992). however, it is as if homo economicus islamicus islamizes homo economicus, thus the emphasis on worldly element is still dominant. in researches on islamic economy, the human self-concept in islamic perspective is popularly known as homo islamicus (farooq, 2011; zaman, 2009). homo islamicus is regarded as the ideal human self-concept, that is human with islamic spirit and committed to islamic values. this means that using islamic perspective, human behavior as “homo islamicus” will have more complete orientation, namely worldly and afterlife orientation (rafiki & wahab, 2014) which is in line with the “coupling epistemology” (triyuwono, 2015). further, there is homo spiritus (triyuwono, 2015) with strong religious and spiritual belief characteristics in transcendental relationship with god, human and nature. homo spiritus has more universal view. spiritual training is an important method in forming homo spiritus„s characteristics, focusing on four elements, namely passion, mind, heart and soul. the highest achievement of homo spiritus is spiritual man at the pinnacle of god consciousness (triyuwono, 2015). business entity is one of the mediums for human to worship allah. this is based on a thinking that humans essentially exist on earth to worship (devotion to) allah (hassan, 1982). worshipping allah may be performed in two ways, namely maghdah worship and good deeds and acts. business entity is not a partial reality, but a unity of realities covering human reality, material reality, system reality, and certainly absolute reality (allah). human reality is to serve as khalifah with the right to manage material reality and system reality as mandated by allah. human as allah‟s representative on earth is assigned to work hard and build the world and use its natural resources to the best way as set forth by god (ibrahim, s. h. m., & yaya, 2005). according to triyuwono (2015), the sharia enterprise theory (set) may internalize islamic values through the concept of zakat implemented in the distribution of wealth and value-added to the stakeholders. triyuwono (2015) more specifically divides stakeholders in the concept of set into: (1) direct stakeholders, including: owner, management, government employee, supplier, customer, and others; and (2) indirect stakeholders, including: mustahiq society (beneficiary zakat, infaq, sadaqah) and natural environment. this shows that the accountability of business entity desired by set is not only to human (shearer, 2002), but also to natural environment and allah. researches on spirituality based accounting have been conducted, such as ones by (triyuwono, 2016) on the holistic concept of managerial performance and by hidayah et al., (2019) on the role of accounting in interpreting the application of the islamic financial institutions (ifi) to settle the struggle taking place in the implementation of pls scheme as an alternative medium of spirituality based finance. other researches associating organization with spirituality include garcia-zamor (2003) and mitroff and denton (1999), but they tend to be concerning the influence of spirituality practice on organizational performance. there are only few researches on the concept of business entity with spiritual environment from human consciousness, objective, management, accountability to instrument used. most of the researches focus on islamic financial institution and nonprofit islamic organization (kamaluddin et al., 2018; asdar et al., 2014; randa et al., 2011; suhaimi nahar & yaacob, 2011; riyanti & irianto, 2011). that there are limited researches on spirituality based accounting is a challenge for researchers to formulate the concept of accountability of spirituality based business entity. this research aims at formulating the concept of accountability of business entity based on islamic spiritual values using metaphor of salah movements (mgs) as the analysis instrument. amernic & craig (2009) propose association of metaphor with accounting, which has been widely used to illustrate the essence of accounting. this mgs analysis will trap the researcher as the homo spiritus islamicus framed in the eling sangkan paraning dumadi (espd) consciousness. espd is a javanese philosophy rooting from islamic spirituality which may bring humans to god consciousness. homo spiritus islamicus considers business entity as part of spiritual reality of which essence is relative. therefore, the concept of s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 63 accountability this research produces will be holistic, which is the accountability to god, human and nature, both in material and immaterial forms. literature review and hypotheses accountability is an underlying concept of an organization, and is even the main factor to cause the fall of some giant companies in the world, such as accounting office arthur andersen in enron and worldcom because of accountability failure (frink and klimoski, 2004). accountability in the concept of modern entity (entity theory) has not touched the level to stimulate god consciousness, but tends to prioritize mind rationality. this may be observed from the definition by roberts and scapens (1985), that accountability is a relationship between the giver, beneficiary and other party regarding something acceptable to common sense. the said relationship is the logical consequence between the agent (management) and the principal (owner) see (triyuwono and roekhudin, 2000; frink and klimoski, 2004). accountability can no longer be charged as the obligation to account for success or failure of organization‟s mission implementation in reaching the designated aims and goals (stanbury, 2003). the definition of accountability above may cause its own pressure to the implementer. the concept of accountability is influenced by the view on human. for example, the concept of accountability of the entity theory, which prioritizes accountability to capital owner (shareholder) and is oriented only to something material (maximum profit). this is caused by the dominance of homo economicus view with utilitarian rational behavior, thus the accountability of business entity of the entity theory is egoistic and materialistic (triyuwono, 2006). this is different from the concept of accountability of business entity based on sharia enterprise theory (set), which is oriented to zakat. the self-view of homo islamicus see (zaman, 2009; farooq, 2011) has more complete orientation, namely worldly and afterlife views, in line with the “coupling epistemology” (triyuwono, 2015) which influences the concept of set. therefore, accountability according to set is not only made to capital owner, but also to god, human, and universe. the emergence of homo spiritus (triyuwono, 2015) with strong religious and spiritual belief characteristics, in the transcendental relationship with god, human and nature, is expected to shift the view of homo islamicus which is minimal in spiritual values. this is also reflected in the meaning of sharia that, according to the opinion of syekh al-azhar, mahmoud syaltout, is the codes created by allah for humans to take guidelines from in arranging their relationship with god, with humans, both muslim and non-muslim, nature and all living beings (bakri, 1996). homo spiritus has four elements, namely passion, mind, heart and soul, and more universal view, as reflected in homo spiritus„s behaviors which are laden with spiritual values. islamic teaching itself, according to khan (2010), is the way of live, which means that humans need islamic spiritual values (universal) in living the life. therefore, the concept of accountability which is laden with spiritual values is needed as the base of theory and practice of sharia accounting. internalization of spiritual values of the operational instruments of business entity may transform into how to behave (ethics) and its use in decision making which is laden with virtue values. methods the paradigm of islamic spiritualist as the umbrella of this research has tauhid as its foundation and aims at stimulating god consciousness. eling sangkan paraning dumadi (espd) which frames this research roots from a javanese philosophy which is laden with islamic spiritual values. this philosophy is a depiction of human with god consciousness, which is to take allah as the focus of all life activities. it is from allah and to return to him (inna lillahi wa inna ilaihi raji‟un). eling sangkan paraning dumadi is a wise expression in javanese life. eling in indonesian language bears the meaning of remembering, conscious, or regaining consciousness. the spiritual essence of „eling‟ is spiritual consciousness which brings humans to an understanding of self-condition that is derived from (sangkan) and going to where the course of life is heading to (paraning dumadi). in the concept of heavenly religion, the condition „eling‟ becomes bidayah (opener) of the presence of god‟s hidayah (grace). al-qur‟an even repeatedly states „udzukuru‟, „o you remember‟, s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 64 „remember when‟, „remember that‟ and others. this is in line with the opinion of chodjim (2003) regarding dzikr, which means memory, something to remember. the use of “espd” as the frame of this research aims at confining the researcher‟s spiritual view. the physical endeavor (il) and spiritual endeavor (ib) methods were used in data collection, reduction and analysis and concept formulation. il method is any of the best attempts in involvement of researcher‟s physique (dhahir) in all activities in the form of physical and mind sensing, while ib is any of the best spiritual attempts in involvement of researcher‟s spirit (holy soul) in the form of spiritual activities. the data used in the research included empirical-physical data and empirical-spiritual data. the empiricalphysical data were obtained, for example, through a case study with pt. karim barokah jaya, located in jakarta. case study, as stated by creswell (2016), is a qualitative strategy where the researcher studies a program, occurrence, activity, process, or one or more individuals more thoroughly, thus the researcher must collect detailed information using various data collecting procedures within a certain period of time. the analysis instrument of metaphor of salah movements (mgs) employed in this research was also generated from the il and ib methods. this mgs analysis was obtained through a zikir, doa (prayer) and tafakur (zdt) procedure (triyuwono, 2015). mgs covered four core movements in salah (ritual) activity. first, standing reflects vertical relationship, which is human‟s relationship with god. second, rukuk (bowing) reflects horizontal relationship, which is relationship between humans, other living beings and the universe. third, prostration reflects the destination, that is allah as the main destination. fourth, sitting reflects distribution of welfare to all creatures throughout the universe. the phrase “lillahi ta‟ala” in salah intention brings human‟s commitment to allah. the manifestation of intention (commitment) is implied in the phrase “allahu akbar”, implying the meaning that all human‟s life activities are conducted in devotion to (worshipping) allah only (muhyiddin and salahuddin, 2006). the movement of raising two hands in takbiratul ihram reflects power and limitation. it is the standing movement which is later used to analyze the empirical-physical and empirical-spiritual data to produce the concept of accountability of business entity with sadaqah concept in the frame of “espd”. this methodology may stimulate and maximize the researcher‟s potential by integrating the performance of rational mind (physical) with spirituality (spiritual), thus the researcher is able to think contemplatively, holistically, dialectically, imaginatively, creatively, rationally and radically see (triyuwono, et al., 2016). this methodology implementation also serves as the media to internalize the ultimate spiritual values such as love, justice, honesty, honor, responsibility and patience (agustian, 2001) in each instrument produced. consequently, the scientific knowledge produced by the researcher will be laden with spiritual values, and able to stimulate its user‟s god consciousness. results and discussion as the meaning of “espd” explained above, the stakeholders (humans) will deem that the existence of business entity is the form of human‟s commitment to allah. human‟s commitment to allah is basically to perform all of his instructions and avoid all of his prohibitions. in the context of business entity, the owner, management, and employee cooperate with each other to implement the commitment to managing and running business operation pursuant to what allah has designated. human‟s commitment to allah will have the implication for human‟s perspective of power and limitation. business entity is stakeholders’ commitment to allah standing in salah reflects the vertical relationship between human and god. this may be reciprocal relationship, in the form of allah‟s instruction for human and otherwise human‟s obligation to obey, submit to and comply with allah‟s instruction. human‟s relationship with god is often associated with worship. worship as the manifestation of a servant‟s devotion is not limited to ritual worship, but all muamalah activities performed by humans intended to be for the sake of allah and pursuant to the islamic law are also included in worship. the phrase “lillahi ta‟ala” in salah intention brings human to be committed to allah. human‟s commitment to allah is their base of commitment to other humans, other living beings, and the nature. s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 65 humans‟ commitment to allah is to submit to and comply with allah‟s laws which are contained in alqur‟an and hadith. human‟s commitment to allah may be implemented individually or in group. one of the manifestations of implementation of human‟s individual commitment to allah is salah ritual. business entity as a reality which is inseparable from the absolute reality should give each individual with space and time to worship. pt. kbj also has such commitment, as said by mr. hh: “congregational salah is indeed performed daily at working hours, and there is annual prophet‟s birthday commemoration, as well as annual salah tarawih by reciting al-qur‟an until the end.” the phrase “congregational salah” which is performed “during working hours” shows that pt. kbj gives anyone the freedom of worship. in islamic teaching, congregational salah is deemed far better than individual salah. the habitual congregational salah at pt. kbj is the commitment of muslim‟s individual consciousness to allah. the salah ritual activity is expected to reflect the spiritual values in human behavior in operating their business entity and in other activities. in addition, the congregational salah ritual activity at pt. kbj positively influences the psychology (mental) of individuals involved in it. the reflection of salah ritual at workplace may give the spirit as reflected in increased enthusiasm (zeal) to work and give the best to the company voluntarily (wholeheartedly). this working enthusiasm (zeal) is categorized as mental intelligence by agustian (2001), while triyuwono (2006) calls it mental piety. further, sense of volunteerism (wholeheartedness) is called by agustian (2001) as spiritual intelligence and triyuwono (2006) prefer to use the term spiritual piety. currently, internalization of spiritual values into instrument used in implementing company‟s operational activity is quite important. this is justified by mr. hh in his other statement: “instilling religious values since early, such as through congregational salah, and there are also commemorations such as prophet‟s birthday commemoration. thus, it more or less instills the spiritual values, and it is proven to be beneficial. there was, in that environment, sorry to say... drugs... quite messy... alhamdulillah... right now, those with good intention remain here, while those with bad intention against allah swt are all revealed and they quit.” human‟s commitment to allah is manifested in human‟s commitment to humans, other living beings and the nature. commitment is not only in oral/verbal or written/textual form, but the true heart commitment has more power. when commitment to allah is violated, commitment to humans will be worse. a good commitment to god, humans and natural environment is quite important in a relationship, as indicated in the interview with mr. hh below: “we perform islamic law in sale and purchase contract, there must be agreement between two parties. in the early fruit season we make an offer to buyer, i have the items and goods this...this...this... the price is this...this...this... provided minimum order of…, it is said clearly. the packaging is like this per packing, with this size, we explain it all. the price is this. and we just wait for them to agree, when they have agreed, it is consensual.” mr. hh‟s oral expression “perform islamic law” explicitly indicates there is business entity owner‟s commitment in the form of compliance with implementation of sale and purchase transaction pursuant to allah‟s rules (islamic law). besides commitment to allah, commitment to humans is also important, which in the context of statement above is the commitment to buyer. this commitment may be implicitly identified in the informant‟s statement in the sale and purchase transaction made, through the expressions “there is agreement”, “we explain it all”, “agree”, and “consensual”. it is apparent that informant‟s spiritual consciousness is the driving motor to implement the values of virtue in decision making. mr. hh‟s other expression confirms that commitment is important as the manifestation of accountability, as follows: “...the price is this. we just wait for them to agree, when they have agreed, it is consensual. and in case of fluctuating price, there must be prior notice. that is the business ethics... thus, we cannot for them arbitrarily, the price increases... when we have offered them, for example, four dollars per kg, but suddenly it increases to four dollars and twenty cents, that is our risk, since we are bound by the contract to the buyer this week, it must be four dollars. and... when that is the case, next time we tell them, for next week, it is four point twenty, four dollars and twenty cents, do you agree? when they agree, we can s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 66 proceed... since the price increases, we just announce it. fruits and vegetables have no stable price. its price is high in early season, but in the peak season, the price falls, and a moment before the end of season, it increases again. when the price decreases, we consequently decreases the price. this is a business of trust.” the informant‟s explicit expression (“we are bound by the contract” and “consequent”) and implicit expression (“there is prior notice” and “cannot force them arbitrarily”) reflect the informant‟s mental piety and spiritual piety in keeping the commitment. the expressions are the indicator of mr. hh‟s commitment to their agreement with buyer. the said commitment is that mr. hh will not… the commitment is also the manifestation of commitment to allah. the other form of commitment of pt. kbj may be found in mr. hh‟s statement below: “i once received an order for bintang beer..., wild boar meat.... but i rejected them. i said this is prohibited. this requires a special license for alcoholic drink and i don‟t have the license for it, i just provide general, fresh fruit, fresh vegetables, and... i don‟t want to violate islamic law since there is no blessing in it. and lastly, he also required, he wanted one container of twenty feet, it was about ten tons, one requested item of which was bintang beer, but i did not do it. i could prepare any other things, but not bintang beer. but mr. hh, it is difficult to sell them without bintang beer (mr. hh imitates potential buyer‟s answer in indonesian language). i‟m sorry... i cannot do it, although the profit was clearly high... but i was not hesitant to reject it.” the expressions “i rejected it”, “i don‟t want to violate islamic law”, and “i‟m sorry... i cannot do it”, are the commitment not to violate allah‟s law. in addition, pt. kbj also does tazkiyah over its property through zakat, infaq, sadaqah. tazkiyah over property may cleanse the heart of the giver and the beneficiary from stinginess and may suppress materialistic view, thus suppressing love for property (material), and stimulate love for allah. this may be observed in pt. kbj‟s financial statement below: figure 3. part of pt. kbj’s loss and profit statement format based on the figure above, there is an account “contribution & donation/zakat”. according to mr. hh, this account collects transactions of donation for orphans, infaq for mosque construction, income zakat, zakat maal (for property), sadaqah and other social expenses. the account “contribution & donation/zakat” serves as the owner and management‟s commitment to allah, thus the account exists based on volunteerism. the account “contribution & donation/zakat” in the pt. kbj‟s financial statement is categorized by triyuwono (2006) as financial piety. further, my attention was drawn to one of the transactions in the “contribution & donation/zakat”, namely sadaqah. i used ib method (through zdt procedure) for the meaning of sadaqah and searched for the islamic values of the concept of sadaqah . the meaning i obtained was a grant, either material or immaterial, which is based on volunteerism, righteousness, willingness, honesty, and justice. commitment is a bond arising from an agreement between two parties. business entity is the medium to manifest human‟s commitment to allah and human‟s commitment to humans, other living beings and the nature . the commitment is derived from the values of virtue emanated from spiritual consciousness. business entity is a commitment given by allah to owner, management, and employees, s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 67 thus when the business entity is at the owner‟s hand, the owner together with the management and employees have commitment to allah to manage and utilize it as per allah‟s will. view of stockholder’s power in business entity when “allahu akbar” is recited and appreciated thoroughly with the heart while raising both hands, it is this time when humans acknowledge that all powers belong only to allah. allah‟s absolute power cannot be repressed by humans, although they have planned anything perfectly, just like the occurrence to pt. kbj as revealed through mr. hh‟s statement below: “in business, because of involvement of other people, in this case customers, i am demanded to be highly disciplined. eventually, i turn to be like them, rigid... yes for yes... no for no...” “thus it should be decisive, it must be decisive against others. alhamdulillah i am trusted. even there is one person that is not willing to be served by others, just wanted me, since i understand that buyer‟s characters, thus yes for yes... no for no... like that... certainty is needed. “ “except in case of unexpected matters, delayed flight, we just notice them that it is not our fault. i once sent items to riyadh, but was stuck. riyadh required 3 deliveries weekly, while the saudi arabian airline only had direct jakarta-riyadh twice weekly, so how to meet the order? principally, we must be capable of maximally serve customer‟s request. i agreed the 3 deliveries through an alternative, with a connecting flight, and i finally used qatar. it was smooth initially, but in the middle... it was stuck in doha, the fruits were suspended up to 11 days, and just dispatched. destroyed...” the expression “certainty is needed” implies that humans always desire perfection in anything. but there is allah‟s power, which is implied through “unexpected matters”. and allah has the power to determine an occurrence not to in harmony with what humans desire, which is represented by “destroyed” in the interview. the other power of allah with pt. kbj is revealed through mr. hh‟s story of early establishment of pt. kbj below: “it was established in nineteen ninety one with a name of pt. auj initially, then... operated in export of vegetables, fresh fruits, and dried food stuffs, such as: crackers, brown sugar, candlenut, and other crops. later... from nineteen ninety one to two thousand and ten, it was under the flag of pt. auj, and changed to pt. kbj until now.” for a company to have been operating for twenty six years from “nineteen ninety one” (1991) until “now” (2017), it is not an ordinary journey. this reminds me of a company named enron in the united states which operated for fifteen years (1986-2001) (tonge et al., 2003). i wonder why pt. kbj survives for twenty six years. its survival must be under allah‟s power and willing. the occurrences with pt. kbj above show the existence of allah‟s power and confirm that humans are weak and lack of power. this lack of human‟s power is the reflection of movement of raising two hands in takbiratul ikhram in the “standing” movement in salah, since all powers belong only to allah (ibn arabi, t.t.). business entity is authorized to owner under allah‟s power . i remember mr. hh‟s statement as follows: “allah‟s hands cover anything”. this shows that although business entity is in owner‟s power, but owner‟s awareness is necessary that there is greater power than that he has, that is allah‟s power. limitation of stakeholders’ power in business entity standing in salah also reflects human‟s limited power. this limitation is implied in the two hands‟ position in takbiratul ihram which is in line with senses and mind. the said limitation is spiritual values, since spiritual values are the ultimate value (agustian, 2001) which may create comfort, peace, and happiness for all people throughout the universe. therefore, in implementing commitment and using their power, humans are limited by god‟s laws which are reflected in spiritual values. business entity in its operation needs limitations of human‟s power, since actually all powers belong only to allah. the said limitations are spiritual values which are internalized in the instrument used by business entity. the power of modern business entity modern is in shareholders‟ egoistic value s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 68 (triyuwono, 2016). shareholders‟ unlimited power directs to the use of company‟s operational instruments while disregarding mental and spiritual values. figure 4. packing and sorting processes at pt. kbj’s warehouse in figure 4 above, the sorting and packing processes are performed simply with human hands. it is far from the impression of sophisticate technology, which is full of machines with only some operators working following machine instruction without pause in pursuing target quantity. the simplicity of the working system of sortation and packing divisions at pt. kbj is one of the instruments chosen by the management which is limited by love value. love is the characteristic of soul. the said soul is the core of spiritual heart, which may be called the deepest mental consciousness (nurbakhsy, 2008). the essence of love is love for allah, since human‟s love for creature and the universe is the manifestation of their love for allah. love as depicted above will lead to a humanistic system, since the management will have the characteristic of prioritizing others (itsar). this has the implication of calm and comfortable working atmosphere, as may be observed in the attitude of employees of pt. kbj while working, that they just sit with legs outstretched, occasionally talking and joking, and sometimes they also eat snacks and drink. the simplicity of the working system does not reduce the quality of deliverables, since in mr. hh‟s opinion, they work heartily. the working atmosphere in the warehouse of pt. kbj above is quite contradictory to the working atmosphere in a company with sophisticated instruments. this may be observed from the depiction of mr. hh‟s experience when he was working in a foreign-owned company. below is mr. hh‟s story of the working atmosphere at the foreign-owned company: “before joining pt. kbj, i once, on a whim... applied to pt. pi, a big company. at that time, i applied for supervisor of its production division. two supervisors supervised five thousand employees. among the employment contract provisions, there are words which were quite a pressure, thus the words were emphasized: “willing to work twenty four hours nonstop”, the words existed. it was indeed a foreign-owned company.” the english expression “pressure” which means putting pressure is an illustration of the mood felt by mr. hh when reading the employment contract where he applied for the job at that time. mr. hh felt pressured by the clause of the employment contract “willing to work twenty four hours nonstop”. the illustration through mr. hh‟s expression above may be taken that the policy made over the company owner and management‟s power is unlimited, while there should be limitation by the value of love for god as manifested in the love for humans and the nature. the clause “willing to work twenty four hours nonstop” implies that humans are deemed to be equal to inanimate object (machine) which is heartless and unable to feel human traits. the human‟s unlimited power is caused by the shackle of nafs which is always material oriented (nurbakhsy, 2008). mr. hh‟s story below is still related to the story above: s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 69 “for an indonesian company, for example... requires twenty five employees of administrative section, a foreign company requires only ten, thus the employees are spurred to meet the target. they are paid high, but that‟s it... let‟s say, mmm... when here, shop employees can sit that there are seats and are paid for five thousand hundred, but in this case the shop employees are given with one million but the seats are taken away. thus there is no seat for the employees, they are just standing during working hours, that is foreigner (it means foreign-owned company) it is like that averagely... heavily exploited... and he is consequent during working hours. he is consequent to the work, but there is no tolerance in working, conversation, smoking cigarette is a no. that is foreigner.” the phrase “to meet the target” directs to an objective which is material oriented, thus there is no limitation of human value in the company owner and management‟s power. the word “consequent” in “he is consequent to the work” is related to “to meet the target”. that is a causal relationship, which is the consequence of no tolerance because of company‟s material-oriented target. human‟s behaviors with “espd” consciousness are reflected by the metaphor of salah movements, namely standing, rukuk (bowing), prostration, and sitting. humans in “espd” consciousness show humans‟ vertical relationship (standing) with god as well as human‟s horizontal relationship (rukuk/bowing) with humans, other living beings and the universe. humans with “espd” consciousness place allah as the destination (prostration) that may lead humans to spread welfare (sitting) to all people throughout the universe. business entity as human‟s medium of allah‟s giving, which is managed by adhering allah‟s provisions, will generate profit which is acquiesced and blessed by allah. therefore, the existence of business entity is unavoidable in the relationship with allah. the vertical line symbolized in salah‟s standing shows there is relationship of creatures and the universe with the creator. this relationship will cause some consequence of the commitment between creatures and the creator. commitment to allah‟s provisions is the manifestation of human‟s accountability as the creature. human‟s commitment to allah will stimulate human‟s commitment to humans and the universe. meaning of accountability accountability is a fundamental concept of an organization, and is even the main factor to cause some giant companies in the world to collapse, including accounting office arthur andersen in enron and worldcom because of accountability failure (frink and klimoski, 2004). accountability in the concept of modern entity (entity theory) has not reached the level of stimulating god consciousness, but tends to prioritize mind rationality. this may be observed from the definition by roberts and scapens (1985) that accountability is a relationship between giver, beneficiary and other parties regarding something acceptable to common sense. the said relationship is the logical consequence between the agent (management) and the principal (owner) see (triyuwono and roekhudin, 2000; frink and klimoski, 2004). accountability in the definition above will have the implication in the perception of ownership, power and values on which it is based. the power of a modern business entity is at shareholders‟ egoistic value (triyuwono, 2016). accountability under the umbrella of the entity theory only acknowledges relationship between humans and, even narrower, between agent and principal. this accountability lacks of spiritual values, since it negates relationship with god. this will have the implication in the behavior of those carrying the accountability, who also tend to follow egoistic passion. this accountability certainly has the implication in the goal and instrument of business entity that is only material oriented. this is as what hameed (2001) states, that the use of conventional accounting causes inconsistent and deviating behaviors for muslim users, since it does not conform to islamic values and may make the objective of islamic business entity fail. the accountability explained above cannot promote the objective of sharia accounting at all, which is able to stimulate and lead human behavior to “god consciousness” (triyuwono, 2015). the existence of sharia accounting needs a concept of accountability which is in line with it, as what baydoun & willett (1997) state that this will bring up a broader concept of accountability than that in western society. this is positively responded to by triyuwono (2015), stating that sharia accounting is the instrument of s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 70 accountability to god, mankind, and nature. therefore, a concept of accountability which may meet the objective of sharia accounting above is needed. “god consciousness” which is the main objective of sharia accounting is at spiritual reality, which is holy soul (capital spiritual) which is called the most essential of human by ashmos and duchon (2000). it is in this spiritual reality where spiritual values lies see (agustian, 2001) as the ultimate value that may be taken as the base to build scientific knowledge. therefore, a concept of accountability which is laden with spiritual values is needed, that may bring sharia accounting user to god consciousness. sharia enterprise theory (set) has the metaphor of mandate and zakat, prioritizes accountability to god (vertical accountability) which is represented into accountability to humans and nature (triyuwono, 2015). the concept of set positions god as the principal (owner) of business entity and stakeholders (humans) as the khalifah (mandate recipient). this means that direct stakeholders and indirect stakeholders has the position of agent pursuant to the mandated function. the concept of vertical accountability may be observed in organization‟s objective which is oriented to zakat, where balance values are inherent in, namely egoistic-altruistic, material-spiritual, and individual-congregational values (triyuwono, 2015). internalization of spiritual values in the concept of business entity’s accountability accountability is influenced by the values internalized in the instrument used to promote the objective of a business entity. modern accounting is the instrument of accountability to promote the objective of business entity based on the entity theory. this concept of accountability has certainly internalized egoistic, materialistic, and utilitarian values (triyuwono, 2006), making this accountability limited only to one stakeholder, which is owner. besides, this accountability also has secular value (hameed, 2001; mulawarman, et.al, 2007), disregarding spiritual values. the implementation of accountability which is born from the entity theory has evidently failed, as proven by frink and klimoski‟s opinion (2004) that the event of failure of the arthur andersen accounting firm in enron and worldcom is because of accountability failure. it is important to internalize spiritual values in a concept of accountability, particularly the itsar (altruistim), volunteerism, willingness, righteousness, honesty, and justice values. lazar (2004) state that spirituality may free us from material shackle, which may be observed in decision making or through consumers‟ attitude and behavior. this is confirmed by ludigdo and kamayanti (2012) that spirituality is eventually the liberator of anthropocentric capitalism towards humane capitalism. this way, internalization of spiritual values in an instrument is greatly needed, since actually spirituality serves to control materiality. internalization of spiritual values in sharia enterprise theory (set) based accountability is based on the metaphor of mandate and zakat. this accountability has internalized balanced values, namely egoistic-altruistic, material-spiritual, and individual-congregational values (triyuwono, 2015) as well as justice value (mulawarman, 2006). this metaphor of zakat is indeed defined in the context of value (triyuwono, 2011), but it cannot just be separated from definition of zakat in the formal context of islamic teaching. zakat is mandatory and may be enforced on those meeting the nishab and certain requirements, while for those not meeting the nishab and certain requirements, it is not mandatory. the concept of zakat has indeed covered material, psychological, and spiritual values, but it cannot cover what is desired by set. for example, the distribution of welfare is only limited to eight asnaf, while the stakeholders of set are quite extensive, covering the whole mankind and nature. further, the mandatory trait and enforceability of zakat may reduce some spiritual values such as honesty value, righteousness value, volunteerism value and willingness value. spiritual accountability business entity‟s accountability is to god, humans, and the universe (triyuwono, 2015; padmantyo, 2010). napier (2009) in his writing of accounting history also discusses the concept of accountability, that in religious context, either islam or christianity, the main responsibility is to god. napier (2009) also s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 71 argues that the main accountability to god does not prevent secular accountability to humans (society, investor, and employer) and the nature (others). therefore, the existence of spiritual accountability is quite important as a more holistic concept of accountability as suggested by baydoun & willett (1997), to promote extensive distribution of welfare. spiritual accountability is highly laden with spiritual values as the source of virtue. this concept starts from searching for value added, either material, psychological or spiritual, in the research‟s case study. based on the research result, there are informant‟s expressions or documentation indicating the existence of value added, either material, psychological, or spiritual. first, the non-monetary material values added are in the form of survival of business for twenty five years and good relationship, whether on business motive or otherwise. second, the psychological value added is in the form of transfer of happiness because of customer‟s trust. third, the spiritual value added is in the form of willingness in serving customers and towards employees. the three values added may manifest when they are based on love as the basic spiritual value of material value, psychological value and other spiritual values. love is a characteristic of soul, which is essentially the love for allah (nurbakhsy, 2008). the three found values added above refer to the concept of sadaqah , which contains the three simultaneously. by context of value, sadaqah contains material (monetary and non-monetary), psychological, and spiritual values. spiritual values in sadaqah cover itsar (altruistim), righteousness, volunteerism, sincerity, honesty, and justice. when the values are internalized in accountability, the accountability will have a more holistic concept, particularly regarding distribution of welfare to stakeholders. finally, this accountability is called spiritual accountability. spiritual accountability is a commitment to perform accountability to stakeholders (god, humans and nature) based on love spiritual value, either material or immaterial (psychological and spiritual). this spiritual accountability places stakeholders‟ (human) commitment, especially capital owner and management to be continuously at god consciousness “espd”. the “spirit” of connectedness with god will always influence each of management‟s behaviors in managing business entity, which is the representation of accountability (triyuwono, 2015). the agent-principal relationship is no longer defined as a management-owner relationship of a business entity, but the relationship between khalifah (agent) and allah (principal), thus the owner‟s power will be under allah‟s power. further, business entity which implements spiritual accountability will automatically be oriented to “maximization of sadaqah”, thus the instrument used at the instrument of accountability will internalize love value, of which derivatives are in the form of itsar (altruistim), volunteerism, willingness, righteousness, honesty, and justice values. conclusion based on the findings in the research and discussion previously reviewed, the following conclusions can be drawn. first, emotional intelligence has a significant positive effect on ethical judgment among students. students who can understand, identify and manage their emotions and others‟ will always direct their actions in a positive direction to maintain good relations between themselves and the people around them. so that the higher the level of emotional intelligence of students, the more ethical judgment will be made. second, religiosity has a significant positive effect on ethical judgment on students. the values of religiosity that are believed by students can direct their thoughts about what is ethical and unethical based on the principles and commands of god almighty. this also applies when students face ethical dilemma situations, so that the higher the level of student religiosity, the more assertive they will be in making ethical judgments. thus the results of this study are expected to be used as input for educational institutions, especially at the university level, to provide services and training to accounting students to improve their emotional intelligence and religiosity. besides, companies can also add indicators of emotional intelligence and religiosity in recruiting accounting staff and corporate auditors. this can be done as a step to maintain and increase the company's credibility and integrity in the future. the limitation of this study is that the subjects used in this study are accounting students who still have no experience in the world of work. so there is the possibility that these findings will differ from their actions and decisions when they are faced with ethical dilemma situations in the work environment later. future studies should use accountants or auditors who have experience in the work environment as s. selfiah, i. triyuwono, y.w. prihatiningsih/ journal of accounting and business education, 6 (1) september 2021 72 research subjects. further research can also add other relevant factors, both internal and external, that influence ethical judgment such as age, gender, moral reasoning, ethical education, ethical climate, and organizational ethical culture. references akers, m. d., & porter, g. l. 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(2002). the effects of leader and follower emotional intelligence on performance and attitude : an exploratory study. the leadership quarterly, 13, 243–274. i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 32 an exploration of indonesian accounting education practices ika rahmawati 1 ani wilujeng suryani 2 1,2 accounting department, faculty of economics, universitas negeri malang, indonesia email: ani.suryani@um.ac.id doi: http://dx.doi.org/10.26675/jabe.v6i1.19422 abstract: this study reviewed the development of accounting education research in indonesia for 21 years. the reviews were conducted on 428 accounting education articles in the nationally accredited journals from 1999 to 2019. a bibliometric approach and content analysis were used to analyze the articles’ topics, theories, methods, and characteristics. this study also separated the period of 21 years into two decades. the results show that accounting education research topics revolved on curriculum and teaching, content-based teaching, educational technology, students and faculty dominated by many quantitative studies. t-test, regression, and path analysis were the most commonly used data analysis techniques. however, only 86 articles framed the studies with the common behavioral, motivational, and fraud theories. interestingly, some articles used the “gone theory” which actually never existed. based on the topic classifications, "students" were the most frequently discussed subjects, followed by the content-based teaching, curriculum and teaching, and lastly teaching staff and educational technology. the results of this study suggest that more studies on accounting curriculum should be conducted emphasizing on technology for the accounting education 4.0. article history received: 23 february 2021 revised: 19 june 2021 accepted: 19 june 2021 keywords accounting education; accounting literature; article review; bibliometrics; content analysis citation: rahmawati, i., & suryani, a. w. (2021). an exploration of indonesian accounting education practices. journal of accounting and business education, 6(1), 32-48 introduction the massive development of financial world has become an important reason to gain more knowledge in the field of accounting education (acar & aktaş, 2018). however, the accounting education system still faces various substantial obstacles since failing to adapt the environmental changes (albrecht & sack, 2000; freeman et al., 2008; pathways commission, 2015). since the middle of 1980, professional accounting bodies and academicians have criticized the accounting education curriculums which failed to equip graduates with the competencies required by the accounting profession in modern era (botha, 2001; bui & porter, 2010; howieson, 2003; parker, 2001; pathways commission, 2015b). therefore, the accounting academicians are required to improve and adapt the accounting education to the development of financial world and the existing businesses (albrecht & sack, 2001; ekasari et al., 2016). journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v6i1.19422 i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 33 studies related to the trends of accounting education have been conducted by many researchers (such as apostolou et al., 2001; rebele et al., 1998a, 1998b; and rebele et al., 1991). the research studies examined the empirical research and summarized the existing research directions by providing recommendations for future research. of all studies examining trends in accounting education research, there is a fairly comprehensive research conducted by apostolou et al. the research was inspired by apostolou et al. (2019) examining the development of accounting education in five best international journals. the research period started in 1997-1999 (apostolou et al., 2001), 2000-2002 (watson et al., 2003), 2003-2005 (watson et al., 2007), 2006-2009 (apostolou et al., 2010), 2010-2012 (apostolou et al., 2013), 2013-2014 (apostolou et al., 2015), 2015 (apostolou et al., 2016), 2016 (apostolou et al., 2017), 2017 (apostolou et al., 2018), and 2018 (apostolou et al., 2019). the results showed that the accounting education studies shifted from descriptive to more empirical, but the reviewed discussion was not equivalent to educational research, such as in the fields of psychology and education (apostolou et al., 2013, 2017b). in indonesia, there are studies exploring the development of trends in the field of accounting. kuang (2010) discussed the article reviews on behavioral accounting updated by tin (2017). the research results showed that behavioral accounting research was dominated by behavior changing strategies, subjects-affecting treatments, and behavioral accounting influences. susilo (2014) has examined the development of corporate social responsibility in indonesia and found that the corporate social performance reporting in the annual report was not yet optimal and only limited on narrative commitments. meanwhile, herawati & bandi (2019) found that universities dominated the authors’ institutional affiliations and only few studies were conducted in the field of taxation. in addition, similar research in the field of interpretive accounting showed that the accounting practices related to people, culture, and religion were used as reasons mentioning that interpretive paradigm was an appropriate research method. however, the number of interpretive accounting studies in indonesia were still very limited when compared to the dominance of positive research (darmayasa & aneswari, 2015). furthermore, researchers in the field of statistical analysis have found that most of scientific articles had used the basic principles suggested in conducting the survey research, although there were still some aspects should be well notified to improve the quality of survey data (aryani et al., 2014). the study on qualitative accounting research analysis belonging to suryani (2018) found that the qualitative research data collection was mostly conducted using interviews. many articles used more than two types of triangulation methods, but most articles did not explain how data collection was performed. the accounting management research has formed the domination of particular topics on information related to planning and control (ratnaningrum et al., 2018). the research trends were also studied in the fields of earnings management and banking. suprianto & setiawan (2017) found that the antecedent of earnings management is a topic extensively discussed using the analytical method and modified jones accruals model. in banking sector, the topic on bank performance was the most common topic discussed in various research studies using the analytical research methods, while the variable widely used in measuring performance was return on assets (suryaputra et al., 2017). however, no research has been found discussing the development of accounting education research in indonesia. in fact, many related researches have been conducted by various researchers in america and turkey (acar & aktaş, 2018; b. apostolou, dorminey, hassell, & hickey, 2019). in addition, there were only 3 indonesian journals focusing on accounting education covering journal of accounting and finance education, assets: journal of accounting and education, and journal of accounting and business education. (sinta ristekdikti, 2019). thus, this research analyzed the existing studies on accounting education in indonesia by understanding the research trends to figure out the implementation of accounting education in the last two decades as well as opportunities or future research gaps. in addition, an analysis focusing on one topic was greatly important in evaluating the accounting academicians’ performance (bonner et al., 2006). i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 34 methods this research was a literature review using a systematic literature review, with a bibliometric analysis approach and content analysis. this research was different from the traditional literature reviews since the systematic literature reviews emphasized more on a systematic, transparent way to collect, synthesize, and assess the research findings (sweet & moynihan, 2007). the bibliometric analysis was greatly beneficial to determine the research trends using databases (kalantari et al., 2017; kurtz & bollen, 2012). content analysis was used to examine the research findings obtained from the accounting education trends in indonesia. meanwhile, content analysis used a coding process or organized many texts into smaller categories (weber, 1990). figure 1 shows the research designs used. figure 1. research design (adapted from apostolou et al., 2019 and hoque, 2014) starting from a general topic review objectives:  determining and evaluating the previous research  identifying or building gaps in the existing research  formulating research questions  discussing the directions of future research selecting search engines (electronic online): sinta ristekdikti identifying the review sources: journal articles classifying the previous research through: topic curriculum and teaching content areas educational technology students theory research methods data analysis techniqu es results critically evaluating the previous research identifying knowledge from the reviewed research identifying scientific gaps and future research concluding and describing the discussion limitations n = 428 n = 428 n = 428 n = 428 n = 428 i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 35 this study used the secondary data from the database of science and technology index (sinta). sinta is used as the basis for the first data selection because 1) sinta is a portal to measure the performance of science and technology developed by the ministry of research, technology, and higher education (known as kemenristekdikti), 2) sinta leads to global (international) indexing portals, such as scopus, google scholar, indonesia science, and technology index (inasti) as well as indonesian publication index (ipi), 3) researchers registered in sinta cover almost all educational institutions in indonesia, 4) articles in the portal are the results of credible and accountable reviews. thus, the data used in this study were valid and reliable. the article searching was focused on journals discussing the accounting education using the keywords of "pendidikan akuntansi (accounting education)", "pendidikan (education)", "akuntansi (accounting)", "accounting education" and "accounting". table 1. was briefly used in the literature searching as follows. table 1. article searching criteria criteria description period 1997-2019 23 observation years language indonesia most articles were published in indonesian language publication type journal articles only the empirical articles were discussed in this research geographical location indonesia all accounting educational research in indonesia article searching limits 4 january 2020 the data collection processes were performed in several stages. first, the authors selected journals providing the open-source articles consisting of articles which are free from access restrictions, such as fees and use restrictions (suber, 2015). the article searching was started by searching the journals registered in sinta using the keywords of “pendidikan akuntansi (accounting education)” (n=1), “pendidikan (education)” (n=37), and “akuntansi (accounting)” and “accounting” (n=71). the authors then opened the webpages of these 109 journals. in the next process, the authors read each article title in each journal to filter the relevant accounting education articles. the criteria for articles to be saved from the educational journals were those with titles having the accounting elements. in the accounting journals, the selected articles were those having the elements related to pedagogy, curriculum, and educational technology, teaching staff, and learning evaluation. the downloaded articles were then classified into four article types consisting of empirical articles (n=428, which conclusions were drawn from the data analysis; descriptive articles (n=132, which discussed strategies, described innovations, reported the student perceptions without statistical analysis); instructional resource articles (n=83, which discussed pedagogy to facilitate teaching and promote learning for students) and case study articles (n=37, which discussed actual or hypothetical situations requiring analysis on students). in this study, the authors focused on the empirical articles because this type of articles were conducted using a scientific method involving the empirical data analyzed through data analysis techniques prioritizing facts occurring in the field. in addition, the information contained in the empirical articles is easy to observe because the research results were based on experiences, experiments, and observations made by the researchers. third, the researchers who were considered as the references for this research used empirical articles as the review sources (apostolou et al. 2017b). the last step was summarizing the contents of empirical articles assisted by microsoft excel which used content analysis to examine each classification determined using the filter feature and then discussed those research findings. the research aspects described in this mapping process were in accordance with what the authors found unique to discuss (richter et al., 2020, 16). the complete article searching results can be seen in table 2 as follows. i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 36 table 2. searching results of education and accounting journal articles no criteria number of articles panel a. accounting education journals 1 articles in “education” journals 6.592 2 after-reading relevant articles 136 3 the empirical article classifications used 84 panel b. accounting journals 1 articles in “accounting” journals 11.719 2 after-reading relevant articles 544 3 the empirical article classifications used 344 results and discussion the research results showed that the accounting education articles on market share were respectively 2% in "education" journals and 5% in "accounting" journals throughout indonesia for 23 years. the low publication number of accounting education articles may be due to the lack of or some research conducted on accounting education, yet not published in journals. this could be seen from sinta databases showing that there were only 3 (three) accounting education journals and 69 accounting journals. this finding was a great opportunity for the accounting researchers to develop research related to accounting education and publish theirs in the nationally accredited journals. in addition, the accounting education study program could also create and manage journals related to the accounting education topics to ease researchers to find and publish their research in the field of education as well as competition with the overseas journals. figure 1 shows that the article publications have significantly increased starting in 2013 due to the obligation of s1/s2/s3 students and graduates to publish their articles (dikti, 2012; permenristekdikti, 2015). in 2017, the graph showed that scientific publications had experienced a significant increase when compared to those in the previous years. this was related to the higher education national standard (known as sn dikti) in master, doctoral and applied doctoral programs (see the circular letter number 444/b/se/2016). the efforts made to increase the scientific publications were intended to communicate the research results to the wider communities, become the bases for future research, improve the quality and quantity of national and international publications, and provide contributions to the development of science and technology to improve the competitiveness of the nation. figure 1. trend of empirical article development within two decades the empirical articles contained in the accounting education journals were mostly written by two authors (47%), followed by one author (28%), three authors (24%), and more than three authors (1%). 1 1 1 2 1 3 4 8 6 7 9 6 12 20 38 39 39 40 74 58 59 0 10 20 30 40 50 60 70 80 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9 n u m b e r o f a rt ic le s publication year empirical articles based on publication year i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 37 these results were relevant to the findings of research conducted by some previous researchers (ameen & guffey, 2017; apostolou et al., 2019; carnegie & potter, 2000; lukka & kasanen, 1996), while the number of researchers in the accounting field mostly consisted of two authors and rarely consisted of three authors. it means that the level of collaboration between the accounting education researchers at different universities was still minimum supported by the research conducted by lindsey and brown (in garfield, 1979) mentioning that collaboration in economics, social, and sociology ranged from 17-25%, while in gerontology, psychiatry, psychology, and biochemistry, it reached 48-81%. in addition, the accounting article publications in the highly reputable journals tended to be lack of collaboration as the objective was to improve the quality of authors’ reputation (rutledge & karim, 2009). however, basically there are many advantages that can be obtained from research collaboration, such as creating opportunities to share knowledge, expertise, and certain techniques in a particular science (katz & martin, 1997). in addition, collaboration between researchers increases the research competitiveness through collaboration between universities and foreign researchers (ristekdikti, 2018; wisnubro, 2019). it means that the more often researchers make collaboration, the quality and quantity of the published scientific papers may increase due to the encouragement or motivation to exchange ideas and interactions between researchers and other scientists in adding new insights and perspectives. collaboration may not only encourage creativity from the researchers to become more creative in conducting the linear or cross-disciplinary research to continuously develop the topic on accounting education. theories table 4 shows the classification of articles in accordance with the theories used. data analysis shows that of 428 empirical articles, only 20% used the related theories. in fact, the high quality research comes from that connected with the theories (neuman, 2014, 88). theories provide the basic concepts in logical frameworks, connecting research with knowledge (knowledge-based research) contributed by the other researchers, deepening the discussion, enriching analysis, and increasing the researchers’ awareness related to the importance of broader data (neuman, 2014, 55). therefore, future research should consider the use of theories to result in stronger studies enriched with the existing literatures. table 4. classifications based on the theories used no theory article (n) article % 1 planned behavior, reasoned action, technology acceptance model (tam), expectation, social cognitive career, perception, holland, hygiene 43 49% 2 motivation, maslow human basic needs, humanistic psychology 14 16% 3 fraud triangle, fraud diamond 12 14% 4 constructivism, morality development theory 4 5% 5 contingency theory 3 3% 6 attribution theory 2 2% 7 gone theory 2 2% 8 others 7 7% 9 number of articles 87 100% 10 empirical articles percentage using theories (87/428) 20% the theories which were more frequently used in the accounting education research were respectively behavioral theory (n=43), motivational theory (n=14), and fraud theory (n=12). this was because the accounting education research tended to use the students as the research samples and many researchers were interested in examining the students’ behavioral patterns. therefore, the findings related to the accounting education research trends were mostly on research utilizing the behavioral theories i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 38 which were actually derived from the field of psychology and rarely used the learning theories. in addition, there were two authors using gone theory in accordance with the citations used by many authors in indonesia revealing that this theory was developed by g. jack bologna in his book entitled the accountant handbook of fraud and commercial crime adapted by bpkp12 in the national corruption eradication strategy book 1999 (tirto, 2011). thus, many citations only included g. jack bologna, yet in facts the complete book was compiled by g. jack bologna, robert j. lindquist, and joseph t. wells. based on these findings, many authors explained that factors causing fraud in performing the collusion and corruption include greeds, opportunities, needs, and exposures. however, after searching further using the google scholar search engine, the authors did not find any data supporting the truth obtained from this theory. the fraud auditing and forensic accounting edition 13 written by tommie singleton, aaron singleton, jack bologna, and robert lindquist had no discussion related to gone theory, but fraud taxonomy, that is, fraud coming from both internal and external companies (singleton et al., 2007, 29). therefore, the relevance of this theory still needs to be further investigated to ensure whether or not this theory is true. methods the research findings show that survey has become the most popular empirical research approach (n=356, 83.2%) and then followed by experimental (n=41, 9.6%). meanwhile, the other types of approaches were presented in table . this is due to easier and cheaper access to the data sources. in addition, survey was frequently used since flexible to measure attitudes, knowledge, preferences, and interests in certain social groups; had the characteristics with certain standards so that the error diversity levels in providing opinions can be avoided; easy to run; in accordance with the phenomena intended by the authors to study (yuliansyah, 2016). experimental methods were frequently used as the research results provided were more precise and relatively unambiguous evidence for the causal relationships, easier to perform, as well as inexpensive and took less time than the other research methods (neuman, 2014). from time to time, the types of approaches used by the accounting education researchers are increasingly various. it means that there is an increasing quality and ability of researchers in developing their research in accordance with time. this is supported by the government programs which continuously encourage educators to improve their bachelor (s1), magister (s2), and doctoral (s3) education as well as professors. in addition, the government also awarded some appreciations in the form of research funding subsidies to maximize the educators’ capacity. table 5. research methods used no approach type total articles article (n) article % curriculum & teaching topicbased teaching educational technology students teaching staff (faculty) 1 survey 356 49 94 19 154 40 83.2% 2 experiment 41 21 11 7 1 1 9.6% 3 descriptive 13 4 4 0 5 0 3.0% 4 explanatory 7 2 1 1 2 1 1.6% 5 others 11 5 3 0 3 0 2.5% number of articles 428 81 113 27 165 42 100% regarding the data collection techniques, documentation was the most frequently used method (n=283, 66.1%), questionnaire (15.7%), test (1.9%), and combined method (see table 66). the use of documentation and questionnaire for data collection techniques generally does not require expensive costs in contrast to interview which requires the relatively expensive costs. in addition, the problems related to i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 39 time are sometimes difficult to match the interviewers’ schedules to interview the informants. thus, interview actually takes a longer time when applied to a wider range of certain area. table 6. data collection techniques used no data collection technique total articles article (n) article % curriculum & teaching topicbased teaching educational technology students teaching staff (faculty) 1 documentation 83 23 80 17 133 30 66.1% 2 questionnaire 67 12 21 3 22 9 15.7% 3 test 8 5 2 1 0 0 1.9% 4 two methods 18 8 4 2 3 1 4.2% 5 more than two methods 52 33 6 4 7 2 12.1% total articles 428 81 113 27 165 42 100% data analysis techniques based on the classification of data analysis techniques, the most frequently used analysis technique was respectively regression (n=226, 52.8%), discriminant test (n=79, 18.5%), path analysis (n=53, 12.4 %), non parametric (n=16, 3.7%), descriptive (n=10, 2.3%), and correlation (n=8, 1.9%) (see table ). regression is a statistical analysis instrument which was frequently used by the researchers (kurniawan, 2016). these results were consistent with the research conducted by apostolou et al. (2017b) mentioning that regression, discrimintion test, and path analysis were more frequently used in the accounting education research than those performed in the past decades. when compared to the first decade, the analysis techniques used by the accounting education researchers tended to be various from time to time along with the continuously increasing scientific article publications made by the researchers. this is due to the continuously increasing quality and ability of researchers to develop their research in meeting the demands of the present era. the government also supported and encouraged educators through various programs to improve education and appreciation programs in the form of research funding subsidies (simlitabmas ristekdikti, 2017) aiming to increase the capacity of educators to to compete with foreign researchers. table 7. data analysis techniques used in the empirical articles no data analysis techniques total articles number of articles article % curriculum & teaching topicbased teaching educational technology students teaching staff (faculty) 1 regression and its derivations 226 36 49 10 111 20 52.8% 2 discrimination test 79 19 30 10 15 5 18.5% 3 path analysis (pls, sem) 53 10 9 4 20 10 12.4% 4 non parametric 16 1 10 1 3 1 3.7% 5 descriptive 10 4 3 2 1 0 2.3% 6 correlation 8 2 0 0 5 1 1.9% 7 factor analysis 3 0 0 0 3 0 0.7% 8 more than two methods 33 8 13 0 7 5 7.7% total articles 428 80 114 27 165 42 100% topics in accounting education the contributions in empirical articles were mostly dominated by the topic on curriculum and teaching (19%, n=81), content-based teaching (26%, n=113), educational technology (6%, n=27), students (39%, n=165), and teaching staff (faculty) (10%, n=42). the empirical articles in the second i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 40 decade were greater than those in the first decade. this finding was consistent with that of research conducted by apostolou et al. (2017b), mentioning that the most contributing topic was student followed by curriculum and teaching, teaching staff, content-based teaching, and educational technology. these phenomena occurred as the accounting education research reviewed many articles with the topics on pedagogy, curriculum, and educational evaluation at universities and schools by involving academicians as the research subjects. trend analysis documented the continuously increasing number of articles over the past two decades (1999-2019). the proportion of the analyzed articles with all topic classifications had a difference in number within a period of two decades, and the variation related to the number of articles was very large. it shows that the accounting researchers were already involved in various topics. therefore, the analysis on each topic was conducted by examining the variables constructing the accounting education research for two decades. curriculum and teaching during the processes of exploring the empirical articles on the topic of curriculum and teaching (n=81), learning assurance and score were the most topic frequently studied (n=37, 46%), followed by core competency (n=15, 19%), curricular problem (n=17, 25%), and instructional approach (n=12, 15%). meanwhile, the percentage change in the publication of curriculum and teaching articles for two decades was 575%, in which the average articles published annually in the first and second decade were respectively 1.2 and 6.8. these results indicate that the proportion of curriculum and teaching articles in the first and second decade were different. the knowledge bases developed by those 37 empirical articles which were on the subtopics of learning assurance and assessment tended to focus on classroom assessment and factors ensuring the learning objectives had been well fulfilled. this assessment could be seen on how to manage the classrooms (arumsari, 2017; gunawan & herawati, 2018; handayani, 2015), experiments on learning media (anisa & yulianti, 2013; fauziah et al., 2018; herawan & rahayu, 2016; kurniawan, 2017; wulansari, 2012; yulizah & yuliyanti, 2015), additional learning hours (febriyanti et al., 2014), and teachers’ teaching quality (alamsyah, 2013; riddiniyah, 2013; utami, 2015), in which the research objects were dominated by the high school and vocational school students. higher education did not only emphasize the students' understanding on technical but also on conceptual competence when performing practices in the field (suryarini, 2009). therefore, the values of individuality, social, critical thinking, and financial management abilities were an individual’s core competencies (anggon et al., 2006; laksmi & febrian, 2018; merdekawaty & fatmawati, 2019; suryaningsum et al., 2005; suryarini, 2009). in addition, many researchers in the field of accounting education focused on discussing approaches in teaching using the classroom action research, such as the use of learning models covering deep dialogue-critical thinking (dd-ct), modules, offline and online games, cases, peer approaches, and quantum teaching (a'yuni & wibowo, 2014; luhsasi, 2017; mutmainah, 2008; purnamasari et al., 2014; suratno, 2009; tanuadmodjo & samlawi, 2014; yana & novitasari, 2015). the results of this study also show that only a few researchers discussed the topic on accounting curriculum which was not in accordance with the needs of business world in it relationship with skills or statements of financial accounting standards (known as psak/ pernyataan standar akuntansi keuangan) (afriyenti & misra, 2019; estiningsih, 2014). the results of comparison between research in indonesia and that conducted by apostolou et al. (2017b) for two decades in international journals show that indonesian researchers tended to have various learning approaches. however, when compared to the research on accounting education at the international level, there was still minimal research emphasizing on curriculum integrated with technology. therefore, research on accounting education provided broader opportunities to empirically explore the interrelationships between learning styles, students’ characteristics, and cultures in improving the learning outcomes in accordance with the demands of the recent development. i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 41 content-based teaching content-based teaching is a topic classification discussing teaching on accounting science, such as professional ethics, auditing, financial accounting, and sharia accounting. exploration related to contentbased teaching shows that the most frequently studied topics were respectively ethics (n=67, 59%), financial accounting (n=14, 12%), auditing (n=12, 11%), managerial accounting (n= 2, 2%), investment management (n=10, 9%), tax (n=1, 1%), public sector (n=1, 1%), accounting theory (n=1, 1%), accounting information systems (3%), and sharia accounting (2%). some researchers on ethics found that the better the ethical education, the better their moral development (hermawan & kokthunarina, 2018; laily & anantika, 2018), while anastasyah & hidayat (2017) and mukhibad (2014) found that students taking business ethical course had different ethical perceptions when compared to those never taking the course. this is because the provision of ethical content in accounting education had a significant influence on students' ethical perceptions (sari et al., 2012). many researchers found that ethical behavior was influenced by gender, such as that mentioned by ernawati & kuncoro (2016), himmah (2013), yovita & rahmawaty (2016), yet some other researchers argued that gender did not influence an indivudual’s ethical behaviors (lestari & ramantha, 2019; murtanto & marini, 2003; pohan, 2012; riasmini et al., 2018; triani, 2011; vitriyani & yanto, 2014). in addition, the existence of sharia accounting education and character education made students tend to ethically behave (mukhibad, 2014; subowo, 2009). the intellectual levels for both emotional and spiritual also influenced an individual’s ethical actions (agustini & herawati, 2013; kurniasari & budiasih, 2018; nofianti, 2011; pratama & astika, 2019; riasning et al., 2017). in fact, when someone has a high religiosity level, he/she tended to develop their positive activities by considering and first thinking if they were intended to act unethically (nikara & mimba, 2019; prabandari & damayanthi, 2019; wiguna & suryanawa, 2019). regarding the financial accounting, wijaya (2016) has examined the learning frequency and question form to the vocational high school students. the results show that test frequency had a significant influence on learning outcome because the classes conducted with more tests had higher scores than those with fewer tests. in terms of test format, essay influenced the students’ learning achievements better than multiple choice questions. the other study on financial accounting found a significant relationship between accounting learning based on international financial reporting standards (ifrs) on students’ readiness to become educators (raeni & purnami, 2013) and the level of knowledge belonging to the students (dewi & dewi, 2019; putri & ariyanto, 2019). in auditing, dalam & sinarti (2019) discussed intelligence level and learning behavior which influenced audit understanding level. meanwhile, marisan et al. (2014) did not find differences in the ethical decision made by the students who have and have not taken the auditing courses. only few researchers have discussed teaching on managerial accounting, tax, public sector, accounting information system, sharia, and accounting theory. when compared to the previous research, the findings of this study wre different from those of research conducted by apostolou et al. (2017b) because the content-based teaching included the sharia accounting and religiousity aspects. however, the research trends having similar focus were mostly on financial accounting, ethics, and auditing. further research can develop studies with topics adapting to the needs of accounting professions and business complexity, for example by empirically examining the teaching model for each learning subtopics in accordance with the needs of the world recent businesses and industries (known as dudi/dunia usaha and dunia industri). educational technology the articles summarized in this section focused on the technologies used to support the teaching and learning processes, for example suhendro & chomsatu (2014) have implemented the online trading simulations to conduct the capital market learning. the results showed that learning using networks, the virtual trading known as the indonesia stock exchange (idx), was easier, more beneficial and interesting. this learning facilitated the students to better understand the real accounting in the context of real businesses. in addition, several researchers have also discussed the use of internet-based learning i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 42 media (dewi & astika, 2017; mahmudah et al., 2019), the use of information technology (hasan et al., 2019; herawati, 2017), edmodo (rohmatillah & achadiyah, 2015), and myob accounting (mudmainnah et al., 2017) in evaluating the learning outcomes. the results of this study show that there were two researchers empirically discussed the enterprise resource planning (erp) with system application and product (sap). the erp with sap learning did not influence emotional intelligence and case-based learning (harris & mardiyati, 2013). however, hakim (2019) found several results in which education and training influenced the perceived ease of use and usefulness of erp with sap information system, perceived ease of effect on perceived usefulness and behavioral intention to use the erp with sap information system, while the perceived usefulness did not influence the usefulness sap with erp information system. the non-influencing variables were probably due to the fact that students did not know how the usefulness of sap with erp in the working world. other researchers also found that some authors have discussed problems related to anxiety using a computer technology (dewi & juliarsa, 2017; fadilah & ali, 2013; khristy & baridwan, 2011; rustiana, 2004; yudha & ramantha, 2014). the discussion patterns on technology for learning was basically still limited (n=27, 6%). the proportions of each subcategory were technology and curricular problems (n=15, 56%), technology-based learning and evaluation (n=12, 44%). however, the existing research trends on technology illustrated that there was an increase starting from the first decade to the second decade. this supported the opinion that research related to educational technology was greatly required to support the students’ learning processes (apostolou et al., 2017a; apostolou et al., 2019; apostolou et al., 2016). however, the findings of accounting education research in indonesia and overseas show that research on technology was the least discussed. even though today the students are highly capable of using technology, this opportunity should be maximally utilized to boost higher quality of accounting education. further research is expected to examine the accounting education using the latest technological devices in accordance with the business developments. for example, studies related to knowledge and management skills on big data, analysis on business data, and blockchain technology for business decision making. students there were 165 empirical articles published over the last two decades discussed approaches on students when learning. the topic on students was the most frequently studied and it was in accordance with the research conducted by apostolou et al. (2017b). this was probably due to the easy and inexpensive research access in obtaining information. the topic classifications on student were categorized into four covering majors and careers (n=92, 56%), skills (n=43, 26%), learning and assessment approaches (n=8.5%), and academic dishonesty (n =22, 13%). the proportion of articles throughout the topic categories on was different within the first decade and second decade. the articles published in the first period had the reviews focusing on the identification of skills and careers on accounting selected by the students, such as learning styles, motivation in a career as an accountant and interest in pursuing the accounting profession education (bawono et al., 2006; hanifah & abdullah, 2001; kustiawan & jaemah, 2009; nazaruddin, 2008; rahayuningsih, 2002; sudaryono et al., 2005; suryaningsum et al., 2004). the other example of research in the first decade, such as hanifah & abdullah (2001), found that there was a close relationship between students’ learning styles and learning models using textbooks, visits to the library, frequently practices on questions telated to their academic achievements, while in the next decade, learning has begun using the network (online) facilities (wulandari et al., 2017). the results of this study also found that in the second decade, the researchers began to be interested in academic fraud cases. many reviews on academic fraud in indonesia connected them with the fraud theory, such as using pressure, opportunity, rationalization and ability variables (budiman, 2018; fitriana & baridwan, 2012; isgiyarta et al., 2019; melati et al., 2018; widianto & sari, 2017). individual backgrounds such as behavior, religiosity, and spirituality apparently influenced the students’ behaviors in doing academic fraud (herlyana et al., 2017; ikbal, 2014; winardi et al., 2017). i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 43 discussion with the topic on students in major and career categories has become more dominant in the second decade, such as studying the relationship between motivation (economic motivation, quality, social, and personality) with career selection process (asmoro et al., 2015; dyastari & yadnyana, 2016; januarti & chariri, 2019; lestari & yadnyana, 2013; vesperalis & muliartha, 2017). some authors found a close relationship between gender and career selection (andini, 2015; saputra, 2018; setyorini & dewi, 2015), while the cultures studied through lifestyles also influenced the career processes (andini, 2015). this increasing research related to majors and careers may be due to the indonesian people’s low interest, especially in accounting graduates to be involved in the accounting profession (mahayani et al., 2017; paramita & sari, 2019; suryani et al., 2018). in fact, the data obtained from the indonesian institute of accountants in 2015 show that the growth related to the number of public accountants in indonesia in terms of quantity was relatively low when compared to the other asean countries (iai, 2015). basically, the accounting education system still experienced various problems due to the difficulties in adapting to the environmental changes (pathways commission, 2015). to deal with these problems, it was necessary to develop skills by strengthening the basic literacy in terms of language, competence, character quality and skills through digital technology (suryani et al., 2018, pysarevskyi, 2019; world economic forum, 2016), which currently has been widely studied by the foreign scientists. however, the empirical research in indonesia was still highly limited and needed further development. this was because many researchers replicated the previous research, for example the research results on classifications of skills, levels of emotional intelligence, intellectual (knowledge) and spiritual which were widely used by the accounting education researchers to see the students’ learning outcomes (agustin & sujana, 2018; ariantini et al., 2017; artana et al., 2014; febriastuti, 2013; gayatri & wirawati, 2019; hetika et al., 2016; sari & prastiti, 2012; wahyuni & mulyadi, 2015). however, only few researchers conducted research related to the students’ skills in using computer (harimurti & astuti, 2016), students’ personality types (hamzah & yanto, 2015; ristadewi et al., 2017; sari, 2019) or analysis on environmental factors influencing the students’ learning activities (anggraini & sulastri, 2012; dhamayanti, 2013; kusmaeni & sulistyowati, 2017; putriana & moeslihat, 2015). when compared with the research conducted overseas, the results of this study were similar with those of the research trends on accounting education conducted by apostolou et al (2017b). the topic classification on students has been the most popular one discussed, in which the students’ learning varied over time and the researchers began discussing the topic on academic fraud. each generation has different characteristics. thus, educators must adapt to the existing circumstances. it is necessary to increase the educators’ motivation to effectively provide qualified education in preparing the accounting careers and professions in the future. teaching staff (faculty) the fifth topic classification is related to teaching staff (faculty), in which this topic discusses the accounting educators in both secondary schools and higher education institutions. the tabulation of topic on teaching staff (n=42) shows the distribution of subcategories on academic staff reflection (n=29, 69%), teaching (n=10, 24%), other faculty issues (n=2, 5%), and research (n=1, 2%). the proportion of articles in the categories of research, teaching, and other faculty issues between those in the first decade and second decade did not significantly change. the research results show that only few authors discussed the research of academic staff. ruswidiono (2008) examined the academic culture related to the research on lecturers, in which academic culture in the forms of regulations, norms, and scientific values at universities influenced the productivity of lecturers in conducting the research. in terms of empirical research, the topic on teaching was discussed through the relationship of educators’ performance and competence with motivation, field practice programs, and pedagogic competencies (abidin, 2018; hapsari & widhianningrum, 2014; nugraha et al., 2014; samlawi & yuliyanti, 2014). in addition, many researchers have discussed the academic staff reflections, such as teaching professionalism (abiana & rasmini, 2019; machfoedz, 1999; rahayu & aryani, 2015), discipline (supeni, 2014), and performance (ardiana, 2016; engko, 2008; sofyani & nazaruddin, 2019; trisnaningsih, 2011). i. rahmawati, a. w. suryani/journal of accounting and business education, 6 (1), september 2021 44 when compared to the findings of research conducted by apostolou et al. (2017b), the indonesian researchers still rarely discussed research productivity empirically. this was probably due to the publication obligation which was only introduced in 2012 and renewed in 2017 (kemendikbud, 2012; kemenristek, 2019). therefore, further research is required to identify the implications of accounting education research so that the quality of education will be better in the future. in addition, referring to the research conducted by apostolou et al. (2019), the suggestions should be provided in the further research conducted on teaching staff problems are exploring factors or obstacles influencing the teaching staff when teaching accounting, for example a deeper understanding related to the workloads of teaching staff or factors in delivering materials either face-to-face in the classroom or through online platforms. thus, the existing problems need to be further discussed so that the pedagogical approach used can build an inclusive learning environment, apart from the arising problems faced by the teaching staff. conclusion this study aimed at determining the trends of accounting education research in indonesia. the results indicated that there was an increase in publications in the field of accounting education. the topic on students was the most frequently discussed with the domination of quantitative research methods. when compared to the research conducted by apostolou et al. (2019), the research performed in indonesia was more various, but the discussions were more monotonous since following the previous research. some results, such as data analytical methods and techniques were similarities. however, different from the previous research, this research has developed its focus with the most dominantly used theory of behavioral theory. in addition, the topic related to the content-based teaching also found the sharia accounting aspects. over time, both local and international research has begun following the changes in the world of finance and business. nowadays, we are considered in a very complex state of changes, thus, innovations related to the accounting education research are greatly needed to keep up with the rapid global development throughout the world. the future research is expected to analyze and review more in the field of accounting education research by utilizing the data processing devices, such as nvivo. it is intended that the conducted 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of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 6, issue 2, march 2022 previously known as:jurnal pendidikan akuntansi (2012-2015) currently known as:journal of accounting and business education (2016 – current) journal of accounting and business education is a fully peer-reviewed and open access journal published twice a year (march and september). journal of accounting and business education has an objective to help researchers publish their work for a wider audience and discover new connections. journal of accounting and business education considers original research articles and review articles in in any research areas of accounting and business education. editor-in-chief nurika restuningdiah, [scopus id: 57188957915] universitas negeri malang, indonesia editorial boards essia ries ahmed, [scopus id: 56275650900] university of nizwa, oman tariq tawfeeq yousif alabdullah, [scopus id: 56275199100] university of basrah, iraq dinh tran ngoc huy, [scopus id: 36951633200] banking university, ho chi minh city, viet nam thomas soseco, [scopus id: 57194284145] the waikato university, new zealand ranu jain, sydenham institute of management studies, research and entrepreneurship education, india mohd rizal palil, [scopus id: 51663834200] universiti kebangsaan malaysia, malaysia diana tien irafahmi, [scopus id: 57188958626] curtin university, australia liem gai sin, [scopus id: 57160832600] association of international business and professional management (aibpm), indonesia satia nur maharani, [scopus id: 57216887292] universitas negeri malang, indonesia roymon panjaitan, [scopus id: 57218950196] universitas sains dan teknologi komputer semarang, indonesia agung yulianto, [shinta id: 5984223] universitas swadaya gunung jati, indonesia dyah nirmala arum janie, [scopus id: 57194281680] universitas semarang, indonesia cipto wardoyo, [scopus id: 57194279103] universitas negeri malang, indonesia amelia amelia, [scopus id: 56996051000] universitas pelita harapan, indonesia nujmatul laily, [sinta id: 52354] universitas negeri malang, indonesia arta moro sundjaja, [scopus id: 55858212100] bina nusantara university, indonesia sulikah sulikah, [sinta id: 6026817] universitas negeri malang, indonesia primasa minerva nagari, [sinta id: 6026761] universitas negeri malang, indonesia aulia herdiani, [scopus id: 57215585392] universitas negeri malang, indonesia judi suharsono, [scopus id: 57214913379] universitas panca marga, indonesia arif widyatama, [scopus id: 57214510720] stie pancabakti palu, indonesia eka ananta sidharta, [scopus id: 57188958537] universitas negeri malang, indonesia bambang sugeng, [scopus id: 57193795732] universitas negeri malang, indonesia endang sri andayani, [sinta id: 6696175] universitas negeri malang, indonesia mohamad arief rafsanjani, [scopus id: 57198441635] universitas negeri surabaya sriyani mentari, [sinta id: 6698536] 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57131827400] universiti malaysia sabah, malaysia jati kasuma ali, [scopus id: 57190291965] universiti teknologi mara, malaysia nur adiana hiau abdullah, [scopus id: 57202626302] universiti utara malaysia, malaysia graham brendon dellar, curtin university of technology, australia yuan teng hsu, [scopus id: 56518883500] yuan ze university taiwan md mahfuzur rahman, university of malaya lee hsuan lin, [scopus id: 25121290400] yuan ze university taiwan tulus suryanto, [scopus id: 57191504347] iain raden intan lampung ari kamayanti, [scopus id: 57202217496] universitas brawijaya yuliansyah yuliansyah, [scopus id: 56685690500] universitas lampung sutrisno sutrisno, [scopus id: 57204889243] universitas islam indonesia, indonesia ceacilia srimindarti, [scopus id: 57210888518] universitas stikubank, indonesia sigit hermawan, [scopus id: 5720794070] universitas muhammadiyah sidoarjo, indonesia pancawati hardiningsih, [scopus id: 57210888228] universitas stikubank, indonesia agus zainul arifin, [scopus id: 57188962176] universitas tarumanegara jakarta ronald ronald, [scopus id: 57203370917] universitas pelita harapan, indonesia a.a. gde satia utama, (scopus id: 57190400910), universitas airlangga, indonesia negina kencono putri, [scopus id: 55806508000] universitas jenderal soedirman, indonesia faidul adzim musa, [scopus id: 57203746748] universitas muhammadiyah makassar, indonesia nurjannah rahayu kistanti, [scopus id: 57215215364] universitas negeri semarang, indonesia masripah masripah, [scopus id: 57202385712] upn veteran jakarta, indonesia dwi ermayanti susilo, [scopus id: 57205064630] stie pgri dewantara, indonesia victor pattiasina, [scopus id: 57207245058] univeristas yapis papua, indonesia rony wardhana, [scopus id: 57209295642] universitas narotama, indonesia sri utami ady, [scopus id: 57204906656] universitas dr. soetomo, indonesia eka handriani, [scopus id: 57190022037] universitas darul ulum islamic centre sudirman, indonesia wiwit apit sulistyowati, [sinta id: 5988478] universitas swadaya gunung jati, indonesia yananto mihadi putra, [sinta id: 6111125] universitas mercu buana, indonesia mr. syakhrial syakhrial, [sinta id: 6725831] universitas pamulang, indonesia muhammad ikbal, universitas mulawarman javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/149996') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/832618') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/465790') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/818519') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8663') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8665') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/8662') 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javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/349485') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/340479') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/4266') journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id , http://journal2.um.ac.id/index.php/jabe volume 6, issue 2, march 2022 table of contents essenso: meaning of profit oriented in pharmacist’s perspective yohan bakhtiar, fitria nur hamidah pdf 1-9 the influence of industrial specialization auditor on audit report lag angelia monique, iman harymawan pdf 10-21 factors affecting internal audit reporting on public sector in sri lanka vickneswaran anojan pdf 22-33 does corporate governance matter in decision making of stock repurchases? aulia herdiani pdf 34-40 factors affecting internal auditor performance: the moderation role of papuan culture-based development yohanes cores seralurin, paulus k. allolayuk, muhamad yamin noch, victor pattiasina, eduard yahannis tamaela pdf 41-53 http://journal2.um.ac.id/index.php/jabe/article/view/10217 http://journal2.um.ac.id/index.php/jabe/article/view/10217/9451 http://journal2.um.ac.id/index.php/jabe/article/view/16888 http://journal2.um.ac.id/index.php/jabe/article/view/16888/9452 http://journal2.um.ac.id/index.php/jabe/article/view/21265 http://journal2.um.ac.id/index.php/jabe/article/view/21265/9547 http://journal2.um.ac.id/index.php/jabe/article/view/24116 http://journal2.um.ac.id/index.php/jabe/article/view/24116/9549 http://journal2.um.ac.id/index.php/jabe/article/view/16681 http://journal2.um.ac.id/index.php/jabe/article/view/16681 http://journal2.um.ac.id/index.php/jabe/article/view/16681/9548 f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 79 the use of outsourced accounting service and its impact on smes performance fadilla cahyaningtyas 1 mega noerman ningtyas 2 1,2 accounting department, sekolah tinggi ilmu ekonomi asia malang, indonesia e-mail: fadilla_cahyaningtyas@yahoo.co.id doi: http://dx.doi.org/10.26675/jabe.v4i2.8641 abstract: this research was about the important contribution of smes to indonesian economy in reality and their weak management accounting functions. this research aimed to find out the factors influencing smes’ decision to use outsourced accounting advisory services and the effect of such use towards smes’ performance as from transaction cost economics (tce) and resource based view (rbv) perspectives. in this research, the population was comprised of manufacturing smes ini malang. the researchers then took the sample using purposive sampling method. meanwhile, the criteria to determine the sample were based on the definition of sme in indonesia. furthermore, the researchers conducted survey by distributing 270 questionnaires to collect the data. using sem (amos) analysis, the researchers successfully figured out that asset specification, environment uncertainty, technical competence, and competition level acted as major factors that affected smes’ decision to use outsourced accounting services. meanwhile, the researchers found that behavior uncertainty and trust in accountants did not have significant impact on such smes’ decision. the result of sem analysis showed that outsourced accounting advisory services significantly provided positive effect on smes’ performance. keywords: smes, outsourced accounting, transaction cost economics (tce), resource based view (rbv), performance introduction company performance has been one of the most-studied topics, be it private or state-owned enterprises, in which it consists of two components, namely financial and non-financial performances (tazilah, majid, & suffari, 2019). even in indonesia studies on a company’s performance analysis have been massively done in accounting field. however, most of these studies on performance analysis focus on major companies when in reality, looking at it a little bit closer, the existence of and roles played by small and medium enterprises (smes) are dominant in the economy than major companies. for five years in a row (2013 2017), the domination of smes are shown by the percentage of sme existence which reaches 99.99 % each year, and major businesses (ub) only 0.01% (kemenkop, 2017). the smes’ contribution to the absorption of manpower is also far greater than major businesses, i.e. at 97% of the total manpower. likewise, smes could significantly contribute to gross domestic product (pdb) over 55% each year (kemenkop, 2017). this smes’ contribution helps increase the country’s economic development and growth significantly (mwangi, mutiso, & mungai, 2018). as the importance of smes’ role grows in the economic growth and development, many challenges should be dealt with by smes. one of them is the unstable and journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ mailto:fadilla_cahyaningtyas@yahoo.co.id http://dx.doi.org/10.26675/jabe.v4i2.8641 f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 80 unpredictable business environment as a result of technology changes, increased customer’s demand, and tight competition (kamyabi & devi, 2011b). furthermore, in such a business environment, smes’ continuance is under a threat and smes have been continuously forced to face these significant challenges (ganesan, haron, amran, & pitchay, 2018; kamyabi & devi, 2011a). even in indonesia, smes still find it difficult to deal with this business environment challenge. one of the difficultires is the involvement in performing an accounting cycle, ranging from recording to measuring or assessing the activities taking place in their businesses, to preparing financial statements. this is consistent with the result of a previous study which finds that smes are likely to find it difficult to manage and control their internal system well in order to prepare sound financial statements (tazilah et al., 2019). many factors contribute to this smes’ difficulty in preparing financial statements, including their lack of adequate resources, both financial and non-financial ones (hidayati, 2013). if this continues, it is not impossible that smes might fail to keep their businesses going in this increasingly more competitive business environment. to overcome this issue, some studies suggest that sme needs to use outsourced accounting service to perform its accounting function (carey, 2015; ganesan et al., 2018; husin & ibrahim, 2014; jayabalan, dorasamy, ramlan, & ching, 2009; kamyabi & devi, 2011d; kotabe & mol, 2009). previous studies recommend sme to use outsourcing services to change its traditional activities, particularly in its accounting function (cullinan & zheng, 2017; kotabe & mol, 2009). outsourced accounting service is an option for smes to maintain its competitive advantage and in a competitive environment (jayabalan et al., 2009; kipsang & mwangi, 2017). smes need the consultation and expertise related to accounting practice to improve its performance (husin & ibrahim, 2014). outsourced service can benefit smes’ competence, enabling them to save their costs more effectively and efficiently (agburu, anza, & iyortsuun, 2017; rodriguez & fierro, 2016), improve their responsiveness to business environment changes, and lower the risks posed by technology change (agburu et al., 2017). for these reasons, outsourced accounting service is used extensively and it is believed these outsourced accountants can be professional advisors among smes (blackburn, carey, & tanewski, 2018). however, the awareness of using external accounting services to deal with their accounting system implementation issues still low. this is disclosed by a previous study which finds that the bookkeeping in kenyan smes is inadequate and these smes rarely use high-quality outsourced accounting services (kipsang & mwangi, 2017). the same phenomenon is also found in indonesia. a previous study finds that out of 70 smes which are taken as respondents, 50 want to have bookkeeping, yet only 18 respondents wish to use consultant service for their accounting issues (hidayati, 2013). based on the phenomenon above, the researchers are urged to conduct research on such topic as the use of outsourced accounting service and its impact on smes' performance since not many studies have been carried on this topic in indonesia. this research is a replication of a previous study in a different country (kamyabi & devi, 2011d, 2011b), in which the previous uses transaction economis cost (tce) and resource based view (rbv) theories to test the factors which affect the smes’ tendency to use external accounting service to help their accounting function. this research also tests the influence of asset specific factors, environment uncertainty, behavior uncertainty, trust in accounting, technical competence, and competition level on smes’ decision to use outsourced accounting service. furthermore, this research also serves as a development of the research conducted by kamyabi & devi (2011d), i.e. in addition to testing the influence of those factors above on the use of outsourced accounting service, it also investigates the impact of this outsourcing service use on smes’ performance ((hafeez, 2013; kamyabi & devi, 2011b). secondly, what makes this research different from the previous one is that it is conducted in a different place, i.e. indonesia, and thus it is possible that the criteria of smes to be included as its sample are different since each country has their own varied definitions of smes. this research aims at explaining the factors which affect smes’ decision to use outsourced accounting service and the impact of such use of outsourced accounting service on its performance by applying a combined tce and rbv theories. in tce perspective, it is believed that a company will try to keep their transaction and production costs in balance through their decisions to use internal or external resources in performing a function (kamyabi & devi, 2011d). furthermore, rbv theory suggests that f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 81 when a company has no valuable, unique, inimitable and organized resources and capability, it ought to use outsourcing to deal with these weaknesses (mcivor, 2009). moreover, rbv theory shows that it is possible smes to obtain access and availability of both tangible and intangible resources which will have positive impacts on its performance (jeronimo, lopez, & pinzon, 2019). also, it is expected that this research could give practical contributions. firstly, this research is expected to give a new insight for sme owners and managers alike into the benefits of using outsourced accounting services in both performing the accounting function and improving company’s performance. secondly, this research result is expected to motivate kantor jasa akuntansi (kja) or accounting service office to play its role more actively to help the implementation of accounting function based on smes’ needs. thirdly, this research result is expected to be a reference for the government to make policies aiming at facilitating the application of accounting function within smes. finally, this research result is expected to trigger more cooperations between the government and kja to disseminate and provide accountant services in smes. literature review and hypotheses smes (small and medium enterprises) the definition of smes is different from one country to another, based on their relevant economic size, corporate sector structure, and policy framework (haselip, desgain, & mackenzie, 2014). in indonesia, there are many definitions of sme, including the one based on the presidential decree of indonesia no. 99/1998 (indonesia, 1998), badan pusat statistik (bps) or statistics indonesia, and law (2008). based on the presidential decree of indonesia no. 99/1998 (indonesia, 1998), small enterprises are people’s small-scale economic activities with a field/type of business being mostly classified as small business activities and needing protection to prevent business competition. bps (statistics indonesia) defines sme based on its number of manpower, in which, according to bps, small enterprises are business entities with 5 to 19 workers, and medium enterprises are the ones with 20 to 99 workers (anggadwita & mustafid, 2014). under the law of 2008, smes are independently-established productive economic businesses, run by persons or business entitties, with such criteria as: a) micro business: net assets range rp50,000,000.00 rp500,000,000.00 excluding business premises such as land and place of business or a sum of annual sales at a maximum of rp300,000,000.00 b) small business: net assets range rp50,000,000.00 rp500,000,000.00 excluding business premises such as land and place of business or a sum of annual sales from rp300,000,000.00 to rp2.500.000.000,00; and c) medium business: net assets over rp500,000,000.00 to rp10,000,000,000.00 excluding business premises such as land and place of business or a sum of annual sales of more than rp2,500,000,000.00 to rp50,000,000,000.00 (law, 2008). accounting function in smes accounting is a process of measuring, communicating, and interpreting financial activities (jayabalan et al., 2009). in general, accounting can be classified into financial accounting and management accounting information, where the financial accounting information is intended for external reporting requirement, and the management accounting is used for the purpose of making internal management decisions (kamyabi & devi, 2011b). the management accounting plays a significant potential role for smes (nandan, 2010). smes need to obtain accurate and reliable management accounting information from their accountants (kamyabi & devi, 2011d). considerinug the importance of smes in every economy, and given the fact that they represent a reform and major companies can grow, it is assumed that smes needs timely, accurate, reliable, and readily comprehensible management accounting information (nandan, 2010). f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 82 concept of outsourcing the concept of outsourcing was introduced for the first time around 1980s (hafeez, 2013; kamyabi & devi, 2011b). in this research, outsourcing refers to companies providing external accounting services (everaert, sarens, & rommel, 2006; hafeez, 2013; kamyabi & devi, 2011b). furthermore, it can be seen that in accounting, outsourcing is a process which involve external accountants and pprofessional accountant firm (everaert et al., 2006; hafeez, 2013; kamyabi & devi, 2011b). some studies draw a conclusion that the use of outsourcing services by smes in performing their accounting function is a good option. previous research concludes that the function of outsourced accounting is an option for smes to maintain their competitive advantage in their business environment since outsourcing can lower the burdens borne by smes (jayabalan et al., 2009). outsourcing offers a benefit to increase flexibility, thus smes are protected from unstable workload (everaert et al., 2006). a company's performance could increase directly when it involves external accountants as its advisors (kamyabi & devi, 2011c). a previous study concludes, upon using a survey with 658 questionnaires, that the function of outsourced accounting in smes supports the tce prediction and rbv consideration, i.e. for asset specificity, accountant confidence, competition pressure and company’s strategy (kamyabi & devi, 2011a). tce (transaction cost economics) tce theory was introduced by coase (hafeez, 2013; kamyabi & devi, 2011d, 2011b) in which he explains that a company’s costs are used to provide an internal activity known as production costs, meanwhile the cost to purchase this activity is called transaction cost (thouin, hoffman, & ford, 2009). tce is believed effective in increasing the company’s understanding, whether they need to use outsourcing services or not (tazilah et al., 2019). marshall, mcivor and lamming (2007) suggest that transaction cost consists of direct and indirect costs from negotiation, monitoring, explicit execution, and implicit contracts between companies and service providers (kamyabi & devi, 2011d). in tce perspective, basically a company strives to keep their transaction and production costs in balance by making decisions on whether or not it should use internal or external resources in performing its functions (dibbern & heinzl, 2009; kamyabi & devi, 2011d). the approach identifies the envrionmental and human factors related to how companies can reduce the costs for their transactions (agburu et al., 2017). meanwhile, the key factors which influence transaction cost of accounting function outsourcing include asset specification, environment uncertainty, behavior uncertainty (dibbern & heinzl, 2009; everaert et al., 2006; hafeez, 2013; kamyabi & devi, 2011d), and trust in accountants (everaert et al., 2006; hafeez, 2013; kamyabi & devi, 2011d, 2011a, 2011b). rbv (resource based view) rbv or resource-based theory came from penrose, 1959 (hafeez, 2013; kamyabi & devi, 2011d, 2011b). rbv could defined as the complete ability of assets, organizational process, resources, company atttibute information, and knowledge collected by the company to design and apply strategies (hafeez, 2013). barney (1991) classifies resources into three, namely physical, human dan organizational resources (hafeez, 2013). rbv has been used by companies to make outsourcing decisions, where it turns transaction and opportunity costs into competitive advantage (kamyabi & devi, 2011d, 2011b). rbv also allows smes to obtain access to and availability of resources, be it tangible or intangible, which will have positive impact on performance (jeronimo et al., 2019). basically, the main principle of rbv is that companies have a set of unique assets and resources, in which if they are capable of utilizing them, then they will obtain competitive advantage (tazilah et al., 2019). moreover, rbv serves as a framework which is helpful for outsourced accounting function when smes have to deal with competitive pressure (kamyabi & devi, 2011a). finally, rbv explains that technical competence (hafeez, 2013; kamyabi & devi, 2011d, 2011c) and competition level (hafeez, 2013; kamyabi & devi, 2011d) are the vital factors which influence a company’s decision to use outsourcing in performing its accounting function. f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 83 asset specification on company’s decision to use outsourced accounting service there are two general types of asset specification, namely physical assets (land, equipment, machinery, and so on) and human assets (expertise, ability, knowledge, and so forth). a high asset specification shows that the costs invested in physical facilities, human capital, and specific knowledge (zhang, ma, & qu, 2018). based on the previous literature, it is said that asset specification is one of important factors which determine the motivation to use outsourcing in tce perspective (altin, uysal, & schwartz, 2018; reza et al., 2017). previous studies also suggest that asset specification is the most important controller in outsourcing, such as financial accounting function, internal audit, and information technology (kamyabi & devi, 2011a, 2011b, 2011d). previous studies also find that asset specification has a negative correlation with outsourcing (altin et al., 2018), where the higher the asset specification level of accounting activity the lower the intensity of accounting outsourcing activity (hafeez, 2013; kamyabi & devi, 2011b). a previous study also finds that asset specification is a significant determinant in the decision to use outsourcing (everaert et al., 2006). h1: asset specification has a negative significant influence on a company’s decision to use outsourced accounting service. environment uncertainty on a company’s decision to use outsourced accounting service environment uncertainty is another significant factor which influence the decision of outsourcing in smes (hafeez, 2013). examples of the uncertainties in this case include the difficulty in predicting future and technology development and inability to correctly evaluate the needed competences and activities (altin et al., 2018). this is supported by a previous study which suggests that the scope of uncertainty such as uncertain demands and technology development (reza et al., 2017). tce assets that if a company can predict and manage the workload related to the right management accounting practices, then the transaction cost should be low and the company will outsource their accounting activity (ellram, tate, & billington, 2008; everaert et al., 2006). on the contrary, high uncertainty will create highly pricey costs to enter into a contract with an external accounting firm (everaert et al., 2006). therefore, high environment uncertainty makes outsourcing less interesting than insourcing (reza et al., 2017). the statement above is supported by another study which finds that environment uncertainty has a significant negative correlation with accounting outsourcing (hafeez, 2013). h2: environment uncertainty has a negative influence on a company’s decision to use outsourced accounting service behavior uncertainty on a company’s decision to use outsourced accounting service uncertainty refers to transaction risks which may occur before and after a contract agreement (zhang et al., 2018). a study indicates that behavior uncertainty is important in terms of performing an outsourced accounting function (hafeez, 2013). the term behavior uncertainty can be defined as the difficulty to evaluate whether (internal or external) accountants performs their job accurately and whether they have done their best with the ability they have (everaert et al., 2006). under an uncertainty, one depends on several heuristic principles to simplify the complex tasks of evaluating probability and values from alternatives (chae, lawson, kull, & choi, 2019). tce predicts that the higher the behavior uncertainty in management accounting function the higher the transaction costs would be and the accounting function would be performed internally (everaert et al., 2006; kamyabi & devi, 2011d). results of a previous study show that high behavior uncertainty makes a company prefer using their internal resources (reza et al., 2017). this statement is supported by previous studies which find that behavior uncertainty has a significant negative influence on accounting outsourcing (hafeez, 2013; kamyabi & devi, 2011d). h3: behavior uncertainty has a negative significant influence on a company’s decision to use outsourced accounting service f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 84 trust in accountants on a company’s decision to use outsourced accounting service trust in this research means the trust put in the provider of outsouced accounting services, where the trust in this case requires the owner/manager to expect that the outsourced accountant service providers (1) have the expertise and ability, (2) are reliable to fulfill their legal obligations, (3) have consistent attitude, (4) and will charge a cost which matches the accounting activities they provide (everaert et al., 2006; kamyabi & devi, 2011d, 2011b). tce theory supports the view that when there is trust, it is possible to lessen the formal control mechanism and the company is more likely to outsource their accounting function to make it run (kamyabi & devi, 2011d, 2011b). a previous study also supports this, finding that when trust is present between companies, it can reduce the transaction cost since it can limit uncertainty and opportunism, reduce business risks, and be a source of competitive advantage (blackburn et al., 2018). this statement implies that the higher the trust in outsourced accountant service provider, the more likely the sme owners/managers to prefer using outsourced accounting service to perform their accounting function. this is supported by previous studies which find that trust has a significant positive correlation with outsourced management accounting (blackburn et al., 2018; hafeez, 2013; kamyabi & devi, 2011a, 2011b). h4: trust in accountants has a significant positive influence on a company’s decision to use outsourced accounting service technical competence on company’s decision to use outsourced accounting service studies show that technical competence, in this case the accounting competence, is one of the factors which significantly attract smes to outsource their accounting function (hafeez, 2013). the competence of outsourced accounting service shows their excellence as business advisors so that a competent outsourced accountant can determine their clients needs (blackburn et al., 2018). rbv theory suggests that technical competence has a significant influence on outsourcing decision (kamyabi & devi, 2011d). rbv theory argues that a professional external accountant is good to be placed to give comperative advantage over internal accountants since they have the appropriate qualification, experience, specific skills, industrial specialization, and the latest technology resources (kamyabi & devi, 2011d, 2011c). in line with rbv theory, a previous study shows that competence has an influence on the use of accounting service by smes (kipsang & mwangi, 2017). furthermore, previous studies indicate that technical competence has a positive correlation with management accounting outsourcing (hafeez, 2013; kamyabi & devi, 2011d, 2011c). h5: technical competence has a significant positive influence on a company’s decision to use outsourced accounting service competition level on a company’s decision to use outsourced accounting service rbv theory suggests that under a competitive circumstance, companies should be able to learn how to exploit the resources available outside the business to help them become more competitive (kamyabi & devi, 2011b). thus, outsourcing service of management accounting function serves as a preferable strategy for most smes to survive in the increasingly competitive market (kamyabi & devi, 2011d). competition has an influence on the use of accounting service by smes (kipsang & mwangi, 2017). this is sypported by previous studies which find that competition level has a positive influence on outsourcing intensity (hafeez, 2013; kamyabi & devi, 2011d, 2011a, 2011b, 2011c). h6: competition level has a significant positive influence on a company’s decision to use outsourced accounting service. impact of the use of outsourced accounting service on sme’s performance rbv perspective provides a set of resources, expertise and ability to study the strength of competitive advantage, where it eventually influences performance (hafeez, 2013). meanwhile, the main principle of tce is related to the influence of options in organizational management to minimize f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 85 transaction costs, so that the company’s performance increases (hafeez, 2013; kamyabi & devi, 2011b). outsourcing will improve a company’s performance for three reasons, namely (1) outsourcing have the potential of reducing the company’s bureaucracy complexity; (2) outsourcing allows smes to meet its production needs and mechanism to manage their economic scales with service provider specialists beyond the company, risk transfer, and lower uncertainty; and (3) when outsourcing is more efficient, smes are more likely to integrate and use its specific resources and capacity (kamyabi & devi, 2011b). kamyabi & devi (2011c) study the correlation between the use of consultation service and smes’ performance and find that a company’s performance may increase directly as long it makes a contract with external accountant as its consultant. previous studies also conclude that outsourced accounting has a significant positive correlation with a company’s performance (ganesan et al., 2018; hafeez, 2013; mwangi et al., 2018). h7: a company’s decision to use outsourced accounting service has a positive influence on smes’ performance based on this hypothesis development, the conceptual framework in this research is as follows: figure 1. conceptual framework methods since there are some hypotheses the researchers have formulated and want to test, this research can therefore be classified as explanatory research. the population used in this research is manufacturing smes located in malang municipality. these smes from manufacturing sectors were chosen since, in the researchers’ opinion, the application of management accounting in a manufacturing company is more complicated and difficult than both services and trading companies. the exact number of manufacturing smes in malang municipality is unknown since the data on the number of smes in malang municipality was obtained as a whole, rather than classified based on their sector. the sample was taken using purposive sampling method, i.e. a sampling technique which is adjusted to the research objective and done using certain considerations (sekaran and bougie, 2010: 276-277) . the criteria for sampling in this research asset specification (x1) environment uncertainty(x2) behavior uncertainty(x3) trust in accountants (x4) technical competence (x5) competition level (x6) outsourced accounting service (y1) sme’s performance (y2) f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 86 were based on the definition of smes in indonesia based on statistics indonesia (bps) and the businesses which match the criteria under the applicable regulations, i.e. law no. 20 year 2008. 270 respondents were needed, in which the number of indicators was multiplied by 5 (hair, jr, 2015). the data used in this research were the primary ones. the term primary data mean the answers from the respondents, in which these respondents were owners/managers/employees working for the smes located in malang municipality. the data in this research were collected using a survey. the survey was carried out by distributing questionnaire to the respondents who were also the research sample. the questionnaire was adapted from previous studies (hafeez, 2013; kamyabi & devi, 2011d, 2011b), consisting of 54 question instruments (appendix 1). the researchers opted to personally bring the questionnaire to the research location to the improve the respond rate. this research have eight latent variables or constructs. the endogenous variables in this research were smes’ performance and outsourced accounting service. the term smes’ performance had the same meaning as the research conducted by hafeez (2013), in which he classified company’s performance into three categories, namely (1) financial performance, (2) non-financial performance, and (3) company’s performance after using outsourced accounting service. financial performance is shown by such indicators as profitability, sales growth, return on asset, and cash flow, and non-financial performance will be shown by lifestyle, independence, and job security. outsourced accounting service played the role of a mediating or interverning variable. the term outsourced accounting service provider here means a company providing consultation services from their external or professional accountants which cooperate with smes to perform these smes' management accounting function. furthermore, there were six exogenous variables, namely asset specification, environment uncertainty, behavior uncertainty, trust in accountants, technical competence, and competition level. the term asset specification here means the characteristics of assets owned by a company as a requirement to use outsourced accounting service, be it physical or human assets. environment uncertainty means unstability and unpredictable changes in relation with the accounting workload as a result of business process changes (hafeez, 2013), and the term behavior uncertainty means the difficulty to measure accountant’s performance in terms of their workloads based on the obligations assigned in smes (hafeez, 2013). the term trust in accountants here means the trust that smes put in the provider of outsourced accountant services (kamyabi & devi, 2011b, 2011d). technical competence here is defined as external accountants which have better specific skills, competence, market knowledge, qualification, and industry experience than the internal accountant (hafeez, 2013). finally, competition level here means the competition faced by sme actors in their business environment. the constructs in this research were measured using 7-point likert scale, where 1 was the lowest and 7 was the highest scores (appendix 1). the data in this research were analyzed using path analysis with sem. the data collected from the questionnaire were saved in excel format for processing and analysis using amos software. results respondent profile the questionnaire were distributed personally to the respondents’ places. the questionnaire was distributed in two occassions. firstly, the researchers personally visited the respondents' places of business, where the researchers provided some instructions and directives until the respondents finished completing the research questionnaire. secondly, the researchers came to the meetings organized by sme community in malang and distributed the questionnaire there. the questionnaire respond rate was 91.5 %, where out of 270 distributed questionnaires, 247 questionnaires were returned to the researchers. from these 247 questionnaires, 222 (90%) were processable, and the remaining 25 (10%) questionnaires could not be processed. the number of samples had met the sem analysis requirements, where it was effective when it ranged from 150 to 400 samples (haryono, 2017). the data on respondent profile in this research were f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 87 classified based on age, education level, position in smes, number of workers, and sales revenue in one year. the detail of this respondent profile can be seen in the following table. table 1. respondent profile respondent classification number percentage sex: male 88 39.64% female 134 60.36% total 222 100% education level: elementary 5 2.25% junior high 19 8.56% senior high 86 38.74% diploma 36 16.22% undergraduate 70 31.53% graduate 6 2.7% total 222 100% position in sme: owner 190 85.59% manager 8 3.60% employees 24 10.81% total 222 100% from 222 collected research data, it could be seen that most respondents were female sme actors (60.36%), and only 39.64% were male sme actors. moreover, most respondents graduated from senior high schools at 38.74%, and were followed by undergraduate education level (31.53%). most respondents were the sme owners themselves, hence they should have owned a sound understanding of their management accounting function as per their business needs. furthermore, the level of use of outsourcing for management accounting function by respondents could be seen from their answers in outsourced accounting service construct. this construct was measured using 7-point likert scale (appendix 1). the results of respondents’ answers in this construct could be seen in table 2. table 2. use of outsourced accounting service by respondents (in percentage) function likert scale accounting 1 2 3 4 5 6 7 bookkeeping 82.4 1.8 2.7 1.4 3.2 5.4 3.2 financial statement preparation 81.1 2.7 2.3 2.3 2.7 5.4 3.6 payroll 80.6 2.7 3.6 2.3 5.0 4.5 1.3 company budget 80.6 2.3 2.7 1.4 3.6 6.8 2.7 customer profit analysis 82.0 1.4 2.3 3.2 2.7 6.3 2.3 product costs 80.6 2.7 0.9 4.1 3.2 6.8 1.8 financial planning 80.6 1.8 2.7 2.7 1.4 7.7 3.2 financial management 81.1 1.4 4.1 2.3 1.4 7.7 2.3 design/ review of spi 79.7 2.7 3.6 2.3 1.8 8.6 1.4 based on the table above, it could be seen that most actors of smes in malang municipality opted to use outsourcing in performing all of their management accounting functions. this was shown by fact that most respondents’ answers were placed on likert scale 1, where this likert scale 1 showed that the smes in manufacturing sector in malang municipality did not use outsourced accounting service at all. meanwhile, those using outsourced accounting service ranged only from 5.4% to 8.6% for each accounting function. this showed that most actors of manufacturing sector smes in malang municipality lacked f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 88 awareness of utilizing outsourced accounting service to perform the management accounting function in their businesses. validity and reliability tests every indicator which had met the validity assumption was convergent if cr > 2 x s.e and if its probability value > 0.05 then it could be said as valid (waluyo, 2016). upon validity test, indicators y2.1, y2.2, y2.4, y2.5, and y2.7 were found invalid (appendix 2), hence these indicators were excluded. meanwhile, the other indicators were declared as valid, thus they could be used to measure the research variables. furthermore, the researchers carried out the reliability test. the reliability was tested using construct reablity (cr) test, where it showed the reliability and consistency of the data. a variable was said to be reliable if it had cr value > 0.7 (waluyo, 2016). furthermore, reliability was also measured based on ave value, in which the criterion was for the variable to have ave value > 0.5 to be reliable. after excluding the invalid indicators of smes’ performance, the calculation results (see appendix 3) showed that all research variables could be said as reliable. model goodness of fit test the model goodness of fit was evaluated using criteria goodness of fit indices. the model criteria and its critical values which had data goodness of fit were presented in the following table. table 3. result of model goodness of fit test goodness of fit indices cut of value* analysis result** model evaluation chi square expected to be small 585.10 good probablity ≥ 0.05 0.279 good cmin/df ≤ 2.00 1.278 good rmsea ≤ 0.08 0.035 good gfi ≥ 0.90 0.952 good agfi ≥ 0.90 0.919 good tli ≥ 0.95 0.960 good cfi ≥ 0.95 0.924 good based on the table above, it could be seen that all indices met the criteria of goodness of fit indices, hence it was safe to say that the model fulfilled the goodness of fit with the data above. hypothesis testing the hypotheses in this research aimed at discovering the influence of asset specification, environment uncertainty, behavior uncertainty, trust in accountants, technical competence, and competition level on the use of outsourced accounting service in smes. furthermore, they also aimed at finding out the impact of such use of outsourced accounting service on smes’ performance. to test these hypotheses in this research, sem analysis with amos software was used. a hypothesis would be accepted if the values of cr > 1.96 and p < 0.05 and it would be rejected if the values of cr < 1.96 and p > 0.05. meanwhile, the result of hypothesis testing calculation was as follows. table 4. result of hypothesis testing variable estimate s.e. c.r. p label y1 <--x1 -.364 .185 -1.971 .049 negative, significant y1 <--x2 .559 .286 1.956 .050 positive, significant y1 <--x3 .240 .215 1.115 .265 positive, insignificant y1 <--x4 -.060 .188 -.320 .749 negative, insignificant y1 <--x5 .476 .156 3.053 .002 positive, significant y1 <--x6 -.648 .254 -2.548 .011 negative, significant y2 <--y1 1.072 .065 16.601 *** positive, significant f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 89 based on the table above, the calculation of x1 on y1 showed that the values of cr (1.971) > 1.96 and p (0.049) < 0.05. in addition, the estimate value (-0.364) indicated that the influence tended to be negative one, hence hypothesis 1 was accepted. the calculation of influence of x2 on y2 showed values of cr (1,956) < 1.96; p (0.05); and estimate value 0.559, meaning that it had a positive and significant value. this meant the second hypothesis was rejected. the behavior uncertainty variable showed insignificant value, where p (0.265) > 0.05 and cr value (1.115) < 1.96; and the estimate value showed a positive direction (0.240), thus the third hypothesis was rejected. likewise, the trust in accountants variable had insignificant value as shown by p value (0.749) > 0.05 and cr value (-0.320) < 1.96. meanwhile, the estimate value showed a negative estimate direction (0.060), therefore the fourth hypothesis was rejected. the calculation in table 4 above showed that the technical competence variable had values of cr (3.053) > 1.96 and p (0.002) < 0.05. additionally, the estimate value also indicated a positive value. based on this calculation, it could be said that the fifth hypothesis was accepted. also, based the calculation in table 4 it was found that the competition level variable had values of cr (2.548) > 1.96 and p (0.011) < 0.05; yet its estimate value showed a negative direction (-0.648), thus the sixth hypothesis was rejected. moreover, the hypothesis test was also carried out to figure out the effect of use of outsourced accounting service (intervening variable) on smes’ performance. based on the calculation in table 4 above, it could be seen that the values of cr (16.601) > 1.96; p (0.000) < 0.05; and its estimate value was positive (1.072), meaning that the seventh hypothesis was accepted. discussion asset specification on a company’s decision to use outsourced accounting service based on the hypothesis testing above, the first hypothesis was accepted, where the asset specification had a negative significant influence on a company’s decision to use outsourced accounting service. this finding was consistent with the research conducted by everaert et al. (2006), hafeez (2013), and kamyabi & devi (2011b, 2011d, 2011a). this meant that the higher the asset specification owned by smes, the more likely for sme actors in malang municipality to decide to not use outsourced accounting service. furthermore, this finding was also consistent with tce theory which suggested that due to the high asset specification, smes preferred performing their accounting activities internally to outsourcing their accounting activities (everaert et al., 2006). tce model showed that when the management accounting function contained high asset specification, the search for a professional accountant would take longer time and harder contract negotiation (kamyabi & devi, 2011b). environment uncertainty on a company’s decision to use outsourced accounting service the research result indicated that the second hypothesis was rejected. this research did not support tce theory which stated that the higher the environment uncertainty level, the more pricey the outsourced accounting service costs would be, leading smes to preferred not using outsourced accounting service. this research result showed that the environment uncertainty variable had a significant positive influence on a company’s decision to use outsourced accounting service. this research result supported the research conducted by altin et al. (2018), everaert et al. (2006), and kamyabi & devi (2011d). this showed that when smes were less capable of predicting their accounting function, then it was more likely for these smes to opt for intensely using outsourced accounting service (everaert et al., 2006). this was because using outsourced accounting service could help smes minimize the business risks they had to face, such as having no adequate internal accountant resources when demands were high and on the other hand when demands were low, this internal accountant tended to had nothing to do. outsourcing their accounting function to an accounting service provider who had expertise in their field, talent and superior resourcers helped smes to get more prepared in the face of environment uncertainty in their business environment. f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 90 behavior uncertainty on a company’s decision to use outsourced accounting service the hypothesis testing above showed that the behavior uncertainty variable had a positive insignificant on smes’ decision to use outsourced accounting service. hence, the third hypothesis was rejected. this research finding supported the research previously conducted by everaert et al. (2006), where behavior uncertainty was not a significant driver of smes’ decision to use outsourced accounting service. this research finding contradicted the tce theory and the studies carried out by hafeez (2013) and kamyabi & devi (2011d). in the researchers’ humble opinion, this difference in this research result might be due to the different characteristics of smes in malang municipality and those in the place of previous studies. one of them was the fact that not all sme actors in malang municipality could apply well the applicable regulations. this made sme actors have to face high behavior uncertainty situation and therefore the decision to use outsourced accounting service was the right one, even if its influence was insignificant. trust in accountants on a company’s decision to use outsourced accounting service based on the calculation of hypothesis testing above, the fourth hypothesis was rejected, in which the trust in accountants did not serve as a significant driver to use outsourced accounting service. the research result showed that trust in accountants had a negative, yet insignificant influence on smes’ decision to use outsourced accounting service. this research result did not support some previous studies (kamyabi & devi, 2011d, 2011b), yet it supported another previous study (everaert et al., 2006). this research finding contradicted the view of tce theory which suggested that when there was trust, companies were more likely to outsource their accounting function (kamyabi & devi, 2011d, 2011b). from this finding, it could be seen that trust was not a main factor for smes in deciding to whether use outsourced accounting service or not. it was possible that this different research result was due to the different characteristics of sme actors in malang municipality and those in the previous study locations, where sme actors lacked care and awareness to apply the accounting function in running their businesses. andriani et al, (2014) suggest that it is more important for smes to earn more profits without having to implement accounting (cahyaningtyas, 2017). this lack of care might be because sme actors thought they had not met the legal requirements to apply the accounting function. this was supported by kipsang & mwangi's (2017) study who found that 86% of sme actors in kenya disagreed with the statement that sme actors had met the legal requirements to prepare the appropriate bookkeeping. meanwhile, a previous study found that the trust between external accountants and a company came from the development of an existing relationship (blackburn et al., 2018). technical competence on a company’s decision to use outsourced accounting service judging from the hypothesis testing above, it was clear that the fifth hypothesis was accepted, where it said that technical competence gave a positive siginificant influence on smes’ decision to use outsourced accounting service. this research result was consisted with what blackburn et al. (2018), hafeez (2013), and kamyabi & devi (2011d, 2011c) found. one of the top factors which influenced smes to use external accountants was the technical competence superiority (ganesan et al., 2018). the previous study in kenya also noted that many respondents indicated that qualification in accounting practice influenced the decision to use outsourced accounting service (mwangi et al., 2018) this research finding was also consistent with rbv theory which argued that professional external accountants were good to be placed to give comparative advantage for the appropriate qualification, experience, specific skills, industry specialization, and latest technology resources they had (kamyabi & devi, 2011d, 2011c; nandan, 2010). accountants and sme actors believed that the competence of external accountants included various business advices, such sme actors’ compliance with the applicable regulations and so on (blackburn et al., 2018). based on the explanation above, it could be seen that technical competence was an important factor which affected the decision to use outsourced accounting service by sme actors (hafeez, 2013). f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 91 competition level on a company’s decision to use outsourced accounting service furthermore, the sixth hypothesis was rejected, where the hypothesis testing result showed that competition level had a negative significant influence on the use of outsourced accounting service by smes. this research finding contradicted rbv theory, in which this theory argued that under a competitive circumstance, companies should be capable of learning how to exploid the resources available beyond their business to help make them more competitive (kamyabi & devi, 2011b). this research result did not support the previous studies (hafeez, 2013; kamyabi & devi, 2011d, 2011b, 2011c). in the researchers’ opinion, there were some causes to this, including the facts that: (1) the research was conducted in a different location and scope. the previous studies were conducted to cover countries, namely iran and pakistan, and this research was conducted to cover much smaller location, namely malang municipality; (2) sme actors in malang municipality lacked the awareness of how important it was to implement management accounting practices in running their business, hence when these sme actors had to face a high competition level, they focused more on its product innovation or marketing activities. impact of use of outsourced accounting service on smes’ performance considering the fact that the seventh hypothesis was accepted, this research supported the findings of previous studies (ganesan et al., 2018; hafeez, 2013; kamyabi & devi, 2011b, 2011c; kotabe & mol, 2009; mwangi et al., 2018). based on this research result, it could be seen that the decision to use outsourced accounting service was an important factor in improving smes’ performance. previous research also suggested that external accountant (non-audit service) became their first choice for sme actors to improve their business performance and maintain their business in a long run (ganesan et al., 2018). this was because using outsourced accounting service could minimize risks, lowered bureaucracy complexity, reduced overhead costs and uncertainty; allowed smes to achieve an economic scale in their business production and operation as a whole, which in turn improved smes’ performance (hafeez, 2013). even more than this, back (1978, 1981 and 1985) found that minor companies which used accountant service could minimize the possibility of liquidation, failure, business stagnation, and lacking access to credits than those which did not use any accounting service (kipsang & mwangi, 2017). conclusion results of this research indicated that asset specification, environment uncertainty, technical competence, and competition level were important factors which influenced smes’ decision to use outsourced accounting service. meanwhile, behavior uncertainty and trust in accountant had some influence, yet it was insignificant on smes’ decision to use outsourced accounting service. in addition, this research’s findings showed that the use of outsourced accounting service influenced smes' performance, where smes’ performance could increase when smes decided to use outsourced accounting service. the recommendations for further research include: (1) to expand the research area, not limited only to malang municipality; (2) to involve smes in other sectors, and (3) to use perspectives other than tce and rbv. references agburu, j. i., anza, n. c., & iyortsuun, a. s. 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(2018). transaction cost and resources based views on hotels’ outsourcing mechanism: an empirical study in china. journal of hospitality marketing and management, 27(5), 583–600. https://doi.org/10.1080/19368623.2018.1406834 f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 95 appendix appendix 1. instrument and construct measurement no construct and its measurement instrument source 1 performance (y2) 1= highly unimportant to 7 = highly important 1. profitability 2. sales growth 3. return on asset 4. cash flow 5. lifestyle 6. independence 7. job security (hafeez, 2013; kamyabi & devi, 2011b) performance (y2): after using outsourced accounting service 1 = highly dissatisfied to 7 = highly satisfied 1. profitability 2. sales growth 3. return on asset 4. cash flow 5. lifestyle 6. independence 7. job security 8. outsourcing can give contribution to competence and competitive advantage 9. outsourcing can make smes aware of the goals to be achieved 10. companies are satisfied with the performance of outsourced accounting service provider (hafeez, 2013; kamyabi & devi, 2011b) 2 outsourced accounting service (y1) 1 = not using outsourced accounting service at all to 7= totally using outsourced accounting service 1. bookkeeping 2. financial statement preparation 3. accounting payroll 4. budget/forecasting 5. customer profitability analysis 6. product costs 7. financial planning 8. financial management service 9. design/review of spi (hafeez, 2013; kamyabi & devi, 2011d, 2011b) 3 asset specification (x1) 1 = strongly disagree to 7 = strongly agree 1. performing regular accounting tasks 2. performing non-regular accounting tasks 3. the way the consultants perform the accounting tasks 4. costs 5. accounting application (hafeez, 2013; kamyabi & devi, 2011b, 2011d) 4 environment uncertainty (x2) 1 = strongly disagree to 7 = strongly agree 1. regular accounting task variation (previous year) 2. non-regular accounting task variation (previous year) 3. relevant changes in business (hafeez, 2013; kamyabi & devi, 2011d) 5 behavior uncertainty (x3) 1 = strongly disagree to 7 = strongly agree 1. product cost calculation 2. making budget/ forecast 3. calculation of profit analysis 4. business strategy planning (kamyabi & devi, 2011d) 6 trust in accountants (x4) 1 = strongly disagree to 7 = strongly agree a. outsourced accountant service provider has the expertise and ability, b. reliable to meet the legal obligations, c. owns consistent attitude, (hafeez, 2013; kamyabi & devi, 2011b, 2011d) f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 96 d. charged appropriately according to the accounting activities provided 7 technical competence (x5) 1= highly incompetent -7= highly competent 1. specific industry with vast knowledge 2. expert in internal control 3. experienced and qualified 4. capable of understanding your company extensively 5. expert in accounting computer information system (cis) 6. expert in risk management (hafeez, 2013; kamyabi & devi, 2011d) 8 competition level (x6) 1 = very weak competition7 = highly competitive competition. 1. product characteristic 2. promotional strategy among competitors 3. access to distribution channels 4. service strategy to customers 5. product types (hafeez, 2013; kamyabi & devi, 2011d) appendix 2. table of construct validity test variable indicator estimate s.e. c.r. p asset specification (x1) x1.5 1.000 x1.4 .926 .113 8.203 *** x1.3 .739 .080 9.245 *** x1.2 1.036 .077 13.410 *** x1.1 1.047 .075 13.992 *** environment uncertainty (x2) x2.3 1.000 x2.2 1.119 .067 16.791 *** x2.1 .969 .071 13.560 *** behavior uncertainty (x3) x3.4 1.000 x3.3 .977 .031 31.654 *** x3.2 .901 .037 24.401 *** x3.1 .845 .044 19.204 *** trust in accountants (x4) x4.4 1.000 x4.3 1.188 .059 20.239 *** x4.2 1.174 .062 19.082 *** x4.1 1.162 .062 18.706 *** technical competence (x5) x5.6 1.000 x5.5 .991 .054 18.351 *** x5.4 .929 .055 16.859 *** x5.3 1.025 .051 20.236 *** x5.2 1.001 .052 19.254 *** x5.1 .995 .051 19.491 *** competition level (x6) x6.5 1.000 x6.4 .789 .076 10.334 *** x6.3 .841 .088 9.544 *** x6.2 .672 .081 8.300 *** x6.1 .937 .089 10.509 *** outsourced accounting service (y1) y1.9 1.000 y1.8 1.074 .033 32.281 *** y1.7 1.107 .036 30.492 *** y1.6 1.067 .032 32.955 *** y1.5 1.066 .032 33.505 *** y1.4 1.088 .035 30.723 *** y1.3 .966 .032 29.818 *** y1.2 1.040 .039 26.542 *** y1.1 1.008 .040 25.465 *** f. cahyaningtyas, m. n. ningtyas /journal of accounting and business education, 4 (2), maret 2020 97 sme performance (y2) y2.17 1.000 y2.16 1.053 .021 49.446 *** y2.15 1.031 .022 47.224 *** y2.14 .990 .022 44.532 *** y2.13 .935 .029 32.528 *** y2.12 1.058 .022 47.109 *** y2.11 1.044 .022 48.058 *** y2.10 .964 .021 46.669 *** y2.9 .983 .022 45.266 *** y2.8 1.003 .023 44.469 *** y2.7 -.030 .027 -1.138 .255 y2.6 .314 .074 4.255 *** y2.5 -.060 .043 -1.386 .166 y2.4 -.037 .030 -1.236 .217 y2.3 .004 .031 .119 .906 y2.2 -.036 .019 -1.870 .062 y2.1 -.065 .022 -2.908 .004 note: *** p = 0.001 appendix 3. table hasil reliability test variable cr ave asset specification (x1) 0.981415301 0.9146204 environment uncertainty (x2) 1.02045262 1.063707333 ketdakpastian perilaku (x3) 0.963864292 0.87008875 trust in accountants (x4) 1.058978682 1.284966 technical competence (x5) 0.996830436 0.9812955 competition level (x6) 0.93057166 0.731871 accounting outsourcing (y1) 1.009890729 1.096481556 sme performance (y2) 0.991352168 0.923347 i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 123 turnover intention in public accounting firms in east java i putu hendra setiawan 1 nurkholis 2 bambang hariadi 3 1,2,3accounting department, faculty of economic, universitas brawijaya, indonesia email: hsetiawan229@gmail.com doi: http://dx.doi.org/10.26675/jabe.v3i2.4735 abstract: this research aims to investigate empirically the influence of pay satisfaction, role conflict and role ambiguity on auditor turnover intention, which are mediated by job satisfaction. a number of 168 auditors who work for public accounting firms in east java participated in this research. the data is analyzed using pls (partial least squares). the result shows that pay satisfaction positively influences job satisfaction and negatively influences auditors’ turnover intention. role conflict does not have any direct influence to job satisfaction but has a direct positive influence toward turnover intention. role ambiguity positively influences job satisfaction and negatively influences auditors’ turnover intention. besides, this research also reveals that job satisfaction has a partial mediation effect between pay satisfaction and auditors’ turnover intention and has a full mediation effect between role ambiguity and auditors’ turnover intention, but it has no mediation effect between role conflict an d auditors’ turnover intention. keywords: turnover intention, pay satisfaction, role conflict, role ambiguity & job satisfaction. introduction at present indonesia is still falling behind with the number of public accountants (pas) comparing to those of other asean countries. this statement is supported by data published by the 2014 financial professional development center ministry of finance (pppk) presented in table 1.1. table 1.1 public accountants in asean countries year 2014 no country number of public accountants 1 thailand 6000 2 filiphina 4941 3 malaysia 2500 4 indonesia 1053 (source: amirsyah, kompasiana, 2015) journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v3i2.4735 i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 124 this phenomenon arises concern that pas 1 in indonesia will not be able to compete with pas entering from other asean countries in the current mea era. in addition, the uneven distribution of age composition of pas and the unstable labor growth in pafs (public accounting firms) may cause other problems that hinder the competitiveness and regeneration of pa in indonesia. center for financial professional development, 2014 said that out of a total of 1,053 pas, 273 pas are between 50-59 years of age and 333 pas are over 59 years old. second, there was a turnover of 554 paf employees in 2012-2013. from these two conditions, there will be a problem of pa shortages which is mainly caused by turnover. high turnover rate will clog pa regeneration and lead to a pa shortage. paf turnover data for the following years cannot be precisely stated, but from some previous studies conducted by sasongko (2017), pradana and salehudin (2015), setiawan and ghozali (2013) it was found that 50% of paf employees with work periods <1 -3 years stated their desire to move from paf. therefore, the phenomenon of this turnover rate is an important thing that needs to be considered. the view that working in paf is only a "stepping stone" to get the desired job is one of the causes of turnover 23 (mustofa, 2014: 197). auditors no longer see paf as the place for their future career but only a place to get work experience. hollenbeck & williams (1986) stated that in certain circumstances, turnover is also needed by companies for example for employees with low performance, but not in a big number so that the organization still benefits from the increasing performance of its employees compared to the costs incurred to recruit them (toly, 2001). the turnover phenomenon is not only important, but is a serious problem for pafs. this statement was reinforced by toly (2001) that turnover behavior can directly as well as indirectly blemish the organization performance. this phenomenon can lead to leaving employees. based on theory of reasoned action (tra), voluntary turnover behavior is predicted by intention (jannah, 2015). tra explains that intention is the best predictor of behavior, meaning that the best way to understand an individual's voluntary behavior is by examining the underlying basic motivation to perform an action (ajzen & fishbein, 1980; 41). steel & ovalle (1984) stated that the results of the meta-analysis conducted between intention and turnover resulting in intention to behave which are the antecedent of turnover. therefore in this study turnover behavior will be predicted by examining the auditors’ intention to leave. the reason for someone to look for employment alternatives is because of pay dissatisfaction. the high living cost forces someone to get payment comparable to what they have performed. studies by hersusdadikawati (2005) and andini (2006) stated that there is a negative direct influence between pay satisfaction and the intention to leave the job. this means that the higher pay satisfaction, the lower the intention of employees to leave. this result is contrary to the research conducted by susanti (2013) which stated that the intention of employees to change jobs is not only influenced by pay satisfaction, but a nonconducive work environment can also be another influencing factor. another reason for someone to leave a job is due to conflict and role ambiguitys perceived. the profession of public accountants has the potential for conflict and role ambiguity (sorensen & sorensen, 1974). role conflict occurs because someone has several conflicting roles or a single position with conflicting potential expectations (cahyono, 2008). whereas role ambiguity arises because of the lack of information needed by employees to complete work. the results of the study by (jannah, 2015; viator, 2001; gregson et al., 1994; rizzo et al., 1970) found that role conflict has a positive effect on the auditors’ intention to leave the paf. in addition to the results of the study conducted by jannah (2015) on the ambiguity of roles giving a positive influence as well as role conflict on the auditors’ intention to leave the paf. this result is different from the research conducted by senatra (1980) which stated that i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 125 senior auditors have realized that conflict and role ambiguity are inherent parts of their work as an auditor. poznanski & bline (1997) and gregson (1992) stated that to understand the auditors’ intention to leave, it is better to include job satisfaction in the research model to predict the auditors’ intent ion to leave. job satisfaction is important because it has an impact on the intention of employees to leave the organization. lum et al (1998) stated that job satisfaction mediates the relationship between pay satisfaction and intention to leave. jackson & schuler (1985) in their meta-analysis stated that role ambiguity and role conflict are the causes of job dissatisfaction and increased auditors’ intention to leave. job satisfaction is increasingly important for employees because before deciding to leave their workplace the first thing they feel is job satisfaction (mobley, 1977). based on the study, job satisfaction is used as a mediating variable. other study results conducted by awalina (2015); setiawan and ghozali (2013); sijabat (2011); fitriany et al (2011); muliawan et al (2009); latifah (2008); kalbers and cenker (2007) examining the direct effect of job satisfaction on turnover intention (intention to leave) stated that, job satisfaction has a negative effect on the intention of employees to leave the organization. this means that the higher job satisfaction is felt, the lower the intention of employees to leave their organization. however, it is different from the results of the study conducted by jannah (2015); parker and kohlmayer iii (2005); toly (2001) which stated that job satisfaction is not related to the intention to leave the organization. jannah (2015) argued that increasing age increases the perceived job satisfaction, while in her research most of the respondents were 21-30 years old. according to her, such age range has not yet put the fulfillment and self-actualization into consideration. the turnover phenomenon in the paf work environment is still interesting for further studies. the assumption that working in a public accountant office is a good place to get experience or a "stepping stone" to get a job that suits their expectations is one of the causes of turnover intention. to be able to predict this phenomenon, researchers use pay satisfaction, conflict and role ambiguity and mediating variables of job satisfaction. it is expected that by using these variables it is able to find out the cause of the auditors’ intention to leave and answer the phenomena raised in this study. this research contributes to increasing knowledge related to behavioral relevance and theory of reasoned action, non-conformity theory, role theory and equity theory in quantitative approaches, and the results of this study can give inputs to consider for paf owners to reduce auditors’ intention to leave. this article is described in the systematic writing starting from preliminary writing, literature review and development of hypotheses, research methods, results, discussion and conclusions section which consists of research implications and suggestions for further research. literature review and hypotheses theory of reasoned action theory of reasoned action (tra) is a theory that was first conceived by ajzen & fishbein in 1980. this theory assumes that humans behave consciously and consider all available information (ajzen & fishbein 1980: 5). tra states that individuals always consider all actions before they decide to do or not do a certain behavior. the intention of someone to do certain behavior is influenced by two basic determinants, namely attitudes (attitude toward the behavior) and the other is related to social influences, namely subjective norms. attitudes come from beliefs in behavior (behavioral beliefs), a person's beliefs about certain behaviors, beneficial or detrimental and consider the effects that will arise if he does these behaviors. subjective norms come from normative beliefs, referring to a person's beliefs about how and what people think are considered important (referent persons) and motivate someone to follow these behaviors. tra is used because this theory is able to explain intention as the best predictor of behavior that someone will do. as this study examines the turnover behavior carried out by auditors. i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 126 h6 h3 nonconformity theory this theory simply measures one's job satisfaction by calculating the difference between what someone expects and what they should get wexley & yukl (1992: 130). satisfaction or dissatisfaction depends on the difference in a number of aspects of the work between those that have been deemed acquired and what is desired. the desired amount of some form of work is explained as the minimum amount needed to meet existing needs. a person will be satisfied if there is no any difference between the expected conditions and the actual conditions. the greater the expected difference and the more expected important things the greater their dissatisfaction. nonconformity theory explains that job satisfaction perceived by an individual comes from things that are considered important and the extent to which whether or not they can be fulfilled. role theory as social beings, human beings are in a social order or certain social structure related to social rights and obligations according to their role in society. role according to robbins (2003: 313) is a set of behavioral patterns that are expected to be owned by someone who occupies a certain position in a particular social unit. in this case the role and status is a culture that defines related expectations and is connected to the formation of social structures. the fact is that each individual has a variety of status and each status has an interrelated role (merton, 1957). this is based on the premise that each social status is not related to only one role, but an arrangement of roles. many roles are called role-set. the role-set is the completeness of the relationships for the role that is owned by someone because they occupy a special social status. in a job, someone gets a certain position and performs his role as expected by the job. however, sometimes each individual has more than one role in the same function. role theory states that when the behavior expected by an individual is incompatible with the reality, such as a role conflict, he will experience stress, dissatisfaction and lack of work effectiveness (rizzo et al., 1970). equity theory this theory was put forward by adam (1965) which was created specifically to predict the effect of rewards on human behavior. adam (1965) stated that individuals will make certain comparisons of their work. robbin (2006: 234), stated that the theory of equity is a comparison made by individuals between input and output of their work with the input or output of others and then responds to eliminate any inequity. comparisons made in the form of work input such as; business, experience, education, ability, with work output such as; pay level, pay increase and recognition, then compare input-output with those of other relevant people. based on the theory of equity, if an employee perceives inequity it can be predicted that he would take one of six choices namely leaving the organization (robbin, 2006: 235). figure 1 research model pay satisfactio n(x1) role conflict (x2) job satisfactio n (m role ambiguity (x3) intention do leave(y) i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 127 pay satisfaction, job satisfaction and intention to leave the concept of equity theory emphasizes that everyone has the right to get equity for the pay received (lum et al., 1998). this sense of equity is felt through a comparison of the ratio of inputs (what has been done) with output (pay, pay level, bonus). then the ratio of input and output compared to that of other relevant people. if the ratio is appropriate, they will feel fair and satisfied with the pay. if the pay received is lower than the others, then he will feel the inequity of paying lower salaries. lawler (1971) in lum et al (1998) stated that pay satisfaction or dissatisfaction is a function of the mismatch between the amount a person assumes should be receive and how much real pay is received. the incompatibility that someone feels arises due to expectations or unfulfilled things that are considered important such as expected pay levels. lawler (1990) in lum et al (1998) stated that pay dissatisfaction in general will reduce job satisfaction perceived by employees. this argument is supported by studies conducted by muliawan et al (2009) and permatasari (2013) stated that pay satisfaction has a significant positive effect on job satisfaction. this means that when someone feels fair or satisfied with the pay received, the perceived level of job satisfaction will increase, and vice versa. luthan (2006) in susanti (2013) stated that pay satisfaction is part of job satisfaction, so that if an individual feels equity in salary payment, he will feel job satisfaction. the perceived pay dissatisfaction will cause someone to choose one of the six alternative actions, namely leaving the organization robinns (2006: 235). this statement is reinforced by weiner’s argument (1980) in lum et al (1998) that pay satisfaction predicts significantly the absenteeism and intention to leave of employees in a public organization environment. in addition, several studies such as motowidlo (1983) in lum et al (1998), hersusdadikawati (2005) and andini (2006) found that pay satisfaction has a negative effect on the intention to leave the oranization. this means that the higher the level of satisfaction someone has on the pay it will reduce the intention of someone to leave the organization. the results of lum et al (1998) study found that the effect of pay satisfaction on the intention to leave is mediated by job satisfaction, then pay satisfaction and job satisfaction are positively correlated. susanti (2013) also found the same thing that the effect of pay satisfaction on intention to leave is indirectly mediated by job satisfaction. this shows that when a person feels equity or satisfaction with the pay received, their level of job satisfaction will increase and then reduce the level of intention to leave. based on the explanation and results of previous research, the following hypotheses can be formulated: h1: payoffs negatively affect the auditors’ intention to leave from paf h4: pay satisfaction has a positive effect on auditor job satisfaction h8: pay satisfaction does not directly affect the auditors’ intention to leave from public accountant firm (paf) which is mediated by job satisfaction. role conflict, job satisfaction and intention to change work upon entering an organization someone will get a certain position or position and perform its role as expected by the organization. however, not all roles expected by the organization are in line with individuals. this is because each individual does not only have one role but a set of roles (role sets) that are sometimes conflicting between one another. (merton, 1950). for example, as a supervisor at paf someone is a subordinate of a partner as well as a boss of senior auditors and junior auditors. the existence of two different functions in one position may cause conflict. role theory states that when the behavior expected by an individual is not in accordance with reality, such as the existence of conflict, he will experience stress, dissatisfaction and a decrease in work effectiveness (rizzo et al., 1970). jackson & schuler (1985) conducted a meta-analysis of role ambiguity and role conflict. the results of his research show that role ambiguity and role conflict have a negative influence on work outcomes, including decreased job satisfaction, high tension and anxiety in the workplace, decreased commitment and participation in the organization and increased intention to leave the organization. this was confirmed by mobley's (1977) research, stating that before a person made the decision to go the first thing to do was evaluate the job and whether or not he feels satisfaction or dissatisfaction with the work. i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 128 the nonconformity theory states that employees assume job expectations and evaluations are more important than what they have in the real world (celik, 2011). this means that expectations and job evaluation is an obligation for each employee to evaluate whether or not the expectations for their work have been fulfilled and feel the work done gives satisfaction. the results of the study (rizzo et al., 1970; senatra, 1980; gregson & wendell 1994; jaramilo et al., 2006) found that role conflict has a negative effect on job satisfaction, which also tends to positively influence the intention to leave the organization (gregson et al., 1994; viator, 2001; jannah, 2015). this means that the higher the perceived role conflict, the lower job satisfaction and the higher the intention to leave the organization. based on the explanation and results of previous research, the following research hypotheses can be formulated: h2: role conflict has a positive effect on the auditors’ intention to leave the paf h5: role conflict has a negative effect on auditor job satisfaction h9: role conflict indirectly influences auditor intention to leave the paf which is mediated by job satisfaction role ambiguitys, job satisfaction, and intention to leave someone who works from a public accountant firm will certainly experience role ambiguity. the structure of paf which is private ownership and consists of several partners will be more susceptible to role ambiguity and role conflict. the partner as the highest position in paf sometimes acts according to his wishes, such as taking a role in the field as an audit manager. thus, the audit manager on duty sometimes wonders what their actual authority and responsibilities are (jannah, 2015). furthermore, each partner has a different working group and communication method for his working group, so that if the tasks, authorities and responsibilities cannot be clearly identified by paf management, role ambiguity and role conflict will arise. role theory states that a person who feels ambiguity will constantly experience dissatisfaction with his role, feel anxious, distort reality and will show poor performance (rizzo et al., 1970). dissatisfaction arises as a result of unclear information on the duties, authorities and responsibilities conveyed by superiors or coworkers. the theory of nonconformity states that work expectations and evaluations are more important than what they have in the real world (celik, 2011). this means that an employee expects things that are considered important and to what extent they have been fulfilled. suppose the audit manager considers that the authority and responsibility for completing an audit report is something that gives satisfaction, this satisfaction can occur if there is no intervention from other parties including partners who can simultaneously take their jobs. jackson & schuler (1985) conducted a meta-analysis of role ambiguity and role conflict. the results of his research stated that role ambiguity and role conflict have a negative influence on work outcomes, including decreased job satisfaction, high tension and anxiety in the workplace, decreased commitment and participation in the organization and increased intention to leave the organization. this result was confirmed by mobley's (1977) study which raised the theme of the relationship between job satisfaction and employee turnover. mobley (1977) stated that the first thing to do before an employee determines to move to work is to evaluate his work and whether or not he feels satisfaction or dissatisfaction with his work. if the employee feels dissatisfied, there will be an intention from the employee to leave. a person who has a role ambiguity will feel dissatisfaction, so that the dissatisfaction of the role that is felt continuously encourages him to leave the organization. rizzo et al (1970); gregson & wendell (1994); jaramilo et al (2006); kalbers & canker (2007), stated that role ambiguity has a negative influence on job satisfaction and has a positive effect on auditors’ intention leave gregson et al (1994); viator (2001); jaramillo et al (2006); rizzo et al (1970); jackson & schuler (1985); cahyono (2006). this condition shows that the higher the ambiguity of the role felt by someone the lower the job satisfaction and the higher the person's intention to leave the organization. based on the explanation and results of the previous research, the following hypotheses can be formulated: i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 129 h3: role ambiguity has a positive effect on the auditors’ intention to leave the paf h6: role ambiguity has a negative effect on auditor job satisfaction h10: role ambiguity has an indirect effect on the auditors’ intention to leave the paf which is initiated by job satisfaction. job satisfaction and intention to leave everyone has experienced satisfaction and dissatisfaction. satisfaction is felt when an expectation is in accordance with the reality and the opposite takes place when the expectations are not in accordance with the reality, the dissatisfaction will be felt. the theory of nonconformity focuses on what is expected and what is obtained by employees. this theory explains that job satisfaction perceived by an employee comes from things that are considered important and the extent to which they can be fulfilled (celik, 2011). if that expectation is fulfilled, the employee will feel satisfied. wanous & lawler iii (1972) stated that employee attitudes depend on perceived mismatches. this means that employees whose expectations are fulfilled will feel satisfied, and the other way around if the expectations are not fulfilled, he will feel dissatisfaction. continuous dissatisfaction will cause someone to take action, one of them according to robbin (2006: 108) is to leave the organization. mobley (1977) in his research that raised the theme of the relationship between job satisfaction and employee turnover found that a person would actually leave the organization when he first felt dissatisfaction with his work. the next stage is that employees will think of leaving the organization due to perceived dissatisfaction. employees will consider the advantages and disadvantages when he plans to leave the organization, but even though he has seen the benefits are better when leaving the organization, this does not guarantee that he will realize the action leave. this happens because the decision to leave the organization involves intention. intention according to ajzen & fishbein (1980: 41) is influenced by attitudes and subjective norms. attitudes originate from beliefs about certain behaviors that are beneficial or not if they are done, while subjective norms refer to what people think are important (referent persons) so as to convince individuals to follow these behaviors. this means that the employee will consider all the consequences and inputs from other people who are in his environment. if it the consequences are met, he then will realize his actions. auditors who feel satisfied with the results of their work will not be depressed and they will feel comfortable in their current work environment. further feeling of comfort will encourage them to stay longer and allow them not to leave the environment. the research by kalbers & cenker (2007) which examined organizational commitment with the context of variables, relationships and consequences of the auditors’ work environment in paf found that job satisfaction has a significant negative effect on the auditors’ intention to leave the paf. muliawan et al (2009) conducted a study on the work environment of information system auditors to find something similar that job satisfaction has a significant negative effect on the auditors’ intention leave the paf. other research conducted by awalina (2015); setiawan & ghozali (2013); sijabat (2011); fitriany et al (2011); latifah (2008) stated that job satisfaction has a significant negative effect on the auditors’ intention to leave the paf. this means that the higher the level of job satisfaction felt by the auditor, the lower the auditors’ intention to leave the paf. based on the explanation and results of previous research, the following hypotheses can be formulated: h7: job satisfaction has a negative effect on the auditors’ intention to leave the paf. methods this study uses a quantitative approach that explains causal relationships between variables through testing hypotheses. the population of this research is all professional staff working in pafs in east java. in east java there are 56 pafs spread in 4 regions, namely surabaya, sidoarjo, pasuruan and malang. the samples in this study are auditors and non-auditors (consultants) who work in the east java region. the unit of analysis in this study is auditors and consultants who work for pafs. the number of samples i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 130 in this study is not included because of the lack of available information regarding the number of auditors and consultants working in pafs in east java region. the sample selection method is convenience sampling method. the sample is chosen based on the willingness of auditors and consultants to complete the questionnaire. the data collection technique used is a survey of respondents using questionnaires. the research questionnaires are divided into 2 forms: hard copy and soft copy (online) because there were several samples who were on duty outside the pafs. the distribution of the questionnaire is divided into 2 stages the first was conducted in malang area from september 13 to october 4, 2017 for the deadline of returning. the second stage was carried out in the pasuruan, sidoarjo and surabaya regions since september 28, 2017 and ended on october 25, 2017 for the returning deadline. before distributing the questionnaire a pilot test was conducted. the questionnaire was sent to the respondent in 2 ways: directly to the pafs and via the link https://goo.gl/forms/fr3xvaswb3qtpegi2. the construct of pay satisfaction was measured by using an instrument adapted from the research of muliawan et al., (2009). the construct of conflict and role ambiguity was measured by using instruments adapted from viator's research (2001). 2 instruments combined and adapted from the research conducted by muliawan et al., (2009) and kalbers & forgaty (1995) were used to measure the construct of intention to leave. the last construct of job satisfaction was measured by using an instrument adapted from the research of kalbers & forgaty (1995). all constructs in this study were measured using a likert scale of 7 points (1-7) from 1 = strongly disagree to 7 = strongly agree while 4 = neutral. scale 7 is used to sharpen differentiation (sekaran 2007: 31). this study conducted partial least square (pls) with the help of the smartpls 3.0 program to process data. the data analysis consisted of two stages: (1) the first stage is evaluating the outer model to test the convergent, discriminant and reliability validity. the parameter to measure convergent validity is the value of loading factor ≥ 0.7 for each indicator and the average variance extracted (ave) value ≥ 0.5 for each construct. if the value of the loading factor is 0.5-0.7 the researcher retains the indicator along the ave value ≥ 0.5 (hartono and abdillah 2009: 80). for the test parameters the discriminant validity is cross loading factor ≥ 0.7. in testing the reliability, the parameters used is the cronbach alpha value and composite reliability ≥ 0.7; (2) the second stage is the evaluation of inner models that aim to predict the relationship of latent variables. the parameters of the inner model are evaluated by using r 2 , q 2 (predictive relevance) and goodness of fit (gof) scores. hypothesis testing was conducted by ha criteria = accepted if t-statistic displayed in the bootstrapping output of smartpls 3.0 program is ≥1.64 (one tailed) and the direction of the coefficient is in accordance with the direction specified in the previous hypothesis. according to ghozali & latan (2015: 149) testing of mediation effects followed the rules of baron and kenney (1986), in which testing the influence of mediation could be carried out if the main influence (direct relationship of independent and dependent variables) is significant. based on this, the testing of this study was carried out in two stages, namely direct / main influence testing and mediation influence testing. results respondents characteristics the questionnaires were sent to 30 pafs spread in malang, sidoarjo and surabaya. the total number of questionnaires sent was 280 questionnaires and were returned as many as 198 questionnaires. of these there were 30 questionnaires did not meet the requirements so there were 168 questionnaires available to process. characteristics of respondents based on gender were 45.83% men and 52.38% women. based on age criteria, there were 130 respondents equivalent to 77.38% were in 21 – 30 years of age. characteristics of respondents based on education were dominated by s1 graduates, as many as 131 respondents or 77.98%. most of the respondents, 118 or 70.24%, were junior staffs based on their position in the pafs. the characteristics of the respondents based on ≤ 1-2 years of the length of service were 100 respondents or 59.52%. the last respondent characteristic based on work concentration was dominated by auditors as many as 141 respondents or 83.93%. i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 131 outer model evaluation table 1. evaluation of convergent validity and reliability outer model evaluation source: primary data (processed) (2017) latent construct convergen validity reliability test indicator loading factor ave result cronbach alpha composite reliability result salary satisfaction (x1) kg1 0.916*** 0.869*** valid 0.950*** 0.964*** reliable kg2 0.940*** kg3 0.938*** kg4 0.936*** konflik peran (x2) kp2 0.662* 0.546* valid 0.812*** 0.855*** reliable kp3 0.629* kp4 0.664* kp5 0.883*** kp6 0.823*** ketidakjelasan peran (x3) ktp1 0.827*** 0.564* valid 0.846*** 0.885*** reliable ktp2 0.816*** ktp3 0.748** ktp4 0.728** ktp5 0.717** ktp6 0.654* niat berpindah kerja (y) nb1 0.908*** 0.679* valid 0.7919** 0.936*** reliable nb2 0.899*** nb3 0.899*** nb5 0.820*** nb6 0.666*** nb7 0.692* nb8 0.849*** kepuasan kerja (m) kk3 0.610* 0.542* valid 0.787** 0.854*** reliable kk4 0.645* kk5 0.863*** kk6 0.731** kk7 0.796** table 2. evaluation of cross loading factor outer model kg kk kp ktp nb kg1 0.916*** 0.309 -0.111 0.415 -0.429 kg2 0.940*** 0.350 -0.117 0.355 -0.431 kg3 0.938*** 0.357 -0.006 0.365 -0.371 kg4 0.936*** 0.337 -0.037 0.367 -0.377 kk3 0.205 0.610* -0.254 0.362 -0.397 kk4 0.258 0.654* 0.115 0.348 -0.109 kk5 0.353 0.863*** -0.009 0.456 -0.317 kk6 0.142 0.731** 0.175 0.269 -0.124 kk7 0.318 0.796** 0.040 0.388 -0.273 kp2 -0.162 -0.102 0.662* -0.086 0.144 kp3 0.103 -0.078 0.629* -0.142 -0.014 kp4 -0.015 0.112 0.664* -0.029 0.072 kp5 -0.111 -0.035 0.883*** -0.141 0.231 i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 132 source: primary data (processed) (2017) based on tables 1 and 2, it is obvious that all test results of the outer model in each construct have met the parameters of convergent and discriminant validity and reliability. so it can be concluded that the instruments used in this study are valid and reliable. the instrument is considered valid if it is able to measure the criteria to be measured and is considered reliable as the instrument used for this study are consistent in the measurements. therefore, it can be proceeded with inner model testing. inner model evaluation inner model evaluation uses r 2 (r-square), q 2 (predictive relevance) and gof (goodness of fit) values. the results of the evaluation of the inner research model are presented in table 3. table 3. results of the inner model r-square evaluation 1. the r2 value of the job satisfaction variable (kk) is explained by the variables of pay satisfaction, role conflict and role ambiguity which is 29.2% while 71.8% is explained by other variables outside the model. 2. value of r2 variable intention to change work (nb) is explained by the variables of pay satisfaction, role conflict and role ambiguity which is 27.7% while 73.3% is explained by other variables outside the model. next, the results of q 2 and gof will be presented as follows: kp6 0.075 0.053 0.823*** -0.056 0.198 ktp1 0.391 0.413 -0.136 0.827*** -0.230 ktp2 0.336 0.434 -0.195 0.816*** -0.332 ktp3 0.363 0.371 -0.094 0.748** -0.334 ktp4 0.215 0.407 -0.009 0.728** -0.128 ktp5 0.258 0.298 -0.016 0.717** -0.096 ktp6 0.207 0.346 0.013 0.654* -0.084 nb1 -0.402 -0.365 0.226 -0.295 0.905*** nb2 -0.367 -0.361 0.248 -0.295 0.899*** nb3 -0.413 -0.334 0.181 -0.263 0.899*** nb5 -0.262 -0.247 0.241 -0.162 0.820*** nb6 -0.207 -0.248 0.137 -0.181 0.666* nb7 -0.387 -0.170 0.162 -0.132 0.692* nb8 -0.406 -0.296 0.157 -0.295 0.849*** nb8 -0.406 -0.296 0.157 -0.295 0.847*** variable r square kk 0.292* nb 0.277* i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 133 from the above calculations it can be seen that the scores of q 2 and gof indicate the value of 0.488 * and 0.427 * which means that the model used is quite good, so it can be continued on testing the hypothesis. hypothesis testing the results of hypothesis testing in this study are shown in table 4: table 4 hypothesis testing results notation line path t decision coefficient statistic h1 kg -> nb -0.374 5.363*** accepted h2 kp -> nb 0.198 2.807* accepted h3 ktp -> nb -0.116 1.697* rejected h4 kg -> kk 0.192 2.394* accepted h5 kp -> kk 0.091 1.031 rejected h6 ktp -> kk 0.434 5.410** rejected h7 kk -> nb -0.227 2.498* accepted h8 kg -> kk -> nb -0.043 1.656* accepted h9 kp -> kk -> nb -0.012 0.581 rejected h10 ktp -> kk -> nb -0.100 2.048* accepted source: primary data (processed) (2017) description: kg: pay satisfaction, kp: role conflict, ktp: role ambiguity, nb: intention to leave, kk: job satisfaction. discussion hypothesis 1 stated that pay satisfaction has a negative effect on the auditors’ intention to leave is accepted. this means that the higher the pay satisfaction perceived by the auditor, the lower the auditors’ intention to leave the paf. the results of this study are in line with several studies that have been carried out previously, namely lum et al. (1998); hersusdadikawati (2005); andini (2006) which provided empirical evidence that pay satisfaction had a significant and negative direction effect on the intention of employees to leave the organization. the results of this study also support the theory of equity which stated that individuals would make certain comparisons of their work (adam 1965). robbin (2006: 234), stated that the theory of equity is a comparison by individuals between the input and output of their work with the input or output of others and then responds to correct any inequity. this means that auditors working in pafs will compare the efforts they have made in pafs with the results they receive in the form of pay levels and pay increases with fellow colleagues in pafs or other pafs. if the auditor feels inequity or is not comparable between the input and output, then they will act to eliminate the inequity in the form of protest such as high absenteeism and finally leave the work. this situation will form a sense of satisfaction or dissatisfaction with the pay received by the auditor. hypothesis 2 stated that role conflict has a positive effect on the auditors’ intention to leave the pafs is accepted. this means that the higher the role conflict perceived by an auditor, the higher the auditors’ intention to leave the pafs. the results of this study are in line with several studies that have been done before, namely, first jannah (2015); cahyono (2008); jaramillo et al., (2006); viator (2001) gregson et al., (1994), jackson and schuler (1985), rizzo et al., (1970) who proved that high role conflict tends to increase auditors’ intention to leave the pafs. the findings of this study support the theory the role that everyone has a variety of roles and status related to one another. each role refers to an identity that defines who and how someone must act. the existence of several roles in a function or position that are conflicting between one and another causes discomfort, conflict and pressure in the individuals. furthermore, if role conflict is felt continuously, there will be an intention to leave the organization. i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 134 hypothesis 3 stated that the ambiguity of the role has a positive effect on the intention of the auditor to leave pafs is rejected. this is because the direction of the hypothesis is different from the test results which show negative results. the results of this study do not support several studies that have been carried out previously namely cahyono (2008), jaramillo et al., (2006), viator (2001), gregson et al., (1994), jackson and schuler (1985) and rizzo et al. ., (1970) stated that the ambiguity of the role has a positive effect on the auditors’ intention to leave the pafs. the findings in this study do not support the role theory which stated that ambiguity of role occurs because of the lack of availability of information needed for a particular position, so that the auditor does not have information dealing with the duties, authority and responsibility for his work. if someone experiences continuous role ambiguity, he will experience dissatisfaction with his role, feel anxious, distort reality and show poor performance (rizzo et al., 1970). cahyono (2008) further explained that role ambiguity can increase pressure in the implementation of tasks and increase the intention to leave the organization. the results of this study differ among the studies that have been done previously. therefore the researcher compiled several assumptions that came from descriptive analysis and previous research to explain. first, the auditor now understands that working for the pafs has a high risk of role ambiguity. so that the higher the level of ambiguity of the role felt by the auditor, the lower the auditors’ intention to leave the organization. the second is that many young auditors now have the view that working in a public accountant firm is only a "stepping stone" for getting a better job. this statement is proven by almost 50% of junior auditors who have just worked in the pafs for less than 3 years who wished to leave (sasongko, 2017; pradana and salehudin, 2015; setiawan and ghozali, 2013). this is what also influences why the ambiguity of the role negatively influences the auditors’ intention to leave. junior auditors are aware of role ambiguity as the risk of working as an auditor. however, current junior auditors will not be affected by role ambiguity and choose to stay in the pafs for a while to get as much work experience as possible. so that the experience they get will be used as an advantage to be able to join the organization they want. third is the statement of cahyono (2008) who cited the statement of pasewark & strawser (1996) in his research, further he stated that conflict and role ambiguity can negatively affect the intention to leave only through job satisfaction. this is considered important because in this study the job satisfaction variable is included as an intervening variable of indirect relationship of pay satisfaction, conflict and role ambiguity. hypothesis 4 stated that pay satisfaction has a positive effect on auditor job satisfaction is accepted. this means that the higher the pay satisfaction perceived by the auditor, the higher the job satisfaction obtained by the auditor. the results of this study support a number of previous studies that have found a positive influence between pay satisfaction on job satisfaction lum et al (1998), mulliawan et al (2009) and permatasari (2013). the findings in this study support the theory of equity and the nonconformity theory. the theory of equity states that perceptions of fairness and inequity arise when feeling conformity to the work ratio of the rewards given. the nonconformity theory according to lawler (1971) in lum et al (1998) explained that satisfaction or dissatisfaction with pay is a function of nonconformity between what someone must accept and how much pay is received. pay satisfaction is part of job satisfaction, so when an individual feels equity and conformity he will feel satisfied with the job. hypothesis 5 stated that role conflict negatively affects auditor job satisfaction is rejected. this means that role conflict does not affect the job satisfaction of auditors working in pafs. the results of this study are not consistent with several previous studies that have found a negative influence between role conflict on auditor job satisfaction, namely jaramillo et al (2006), gregson & wendell (1994), jackson & schuler (1985) and rizzo et al (1970). the results of this study also do not support the role theory which states that the role conflict that is felt continuously by someone will cause stress, reduce job satisfaction and lack of work effectiveness (rizzo el al., 1970). basically role theory explains that when individuals have multiple conflicted roles or accept various expectations for conflicting roles in certain positions and this continues to contradict, one of the consequences that arises is job dissatisfaction. the results of this study indicate that role conflict does not affect auditors’ job satisfaction. senatera (1980) and cahyono (2008) proved the same matter in their respective studies. however, their research was conducted on a big pafs with senior auditors as dominant respondents. in addition, the big paf causes of job dissatisfaction are influenced by other things besides role conflict such as pay satisfaction, satisfaction i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 135 with promotion of career paths, satisfaction with coworkers and satisfaction with supervisors. research currently uses auditors working in small and medium-sized accounting firms in the east java region as respondents. with a total of 168 respondents, nearly 70% are junior auditors. based on the descriptive data the researcher built the assumption that in general, junior auditors cannot find job satisfaction if it is associated with role conflict because at the junior level the auditor of a paf the job is not too complex. the role of the junior can still be classified into two, namely as a professional and a member of the organization, in this case is the paf. if both of these roles conflict with each other, junior auditors will feel role conflict and will choose to directly leave the paf because they do not understand that conflict is part of working as an auditor. whereas for a senior auditor, manager, supervisor and partner in the paf, the role has become more and more complex, but someone who has been in that position understands that role conflict is a part of working as a professional such as an auditor. so that at this level what happens is when someone feels role conflict is too high it will interfere the work they do. hypothesis 6 stated that role ambiguity negatively affects auditor job satisfaction is rejected. this is due to the direction of the hypothesis that is not in accordance with the test results which express a positive direction. the results of this study do not support previous studies that have managed to find a negative influence between the role ambiguity of job satisfaction, namely kalbers & cenker (2007), jaramillo et al (2006), gregson & wendell (1994), jackson & schuler (1985), sumatra (1980 ) and rizzo et al (1970). this study also does not support role theory which states that a person who experiences role ambiguity will continue to experience dissatisfaction with his role, feel anxious, distort reality and will show poor performance (rizzo et al., 1970). the findings of this study differ among the studies that have been done before. the difference lies on the ambiguity that has a significant effect on job satisfaction but the direction of the relationship is positive. therefore the researcher compiled a number of assumptions derived from descriptive statistics and the results of previous studies to explain. first, auditors now understand that working for the pafs has a high risk of role ambiguity. so that the higher the level of uncertainty of the role perceived by the auditor will not affect the job dissatisfaction because they have understood the risk. however, this will cause the opposite in that of the increasing job satisfaction as long as they still enjoy satisfaction with their work. second, junior auditors consciously stay longer in the public accountant firms despite the ambiguity of the role he feels to gain more experience in the pafs. with his experience, it will be an added value for them to find work outside the independent auditor with the hope that the benefits obtained will be better. therefore, although the ambiguity of the role is high and coupled with the understanding they have about the risks of working in a public accounting firms will not reduce job satisfaction. on the contrary if they feel satisfied with their work, even though the ambiguity of the role is very high, the job satisfaction is also high. hypothesis 7 stated that job satisfaction has a negative effect on the auditors’ intention to change work from an accepted paf. this means that the higher the job satisfaction perceived by the auditor, the lower the auditors’ intention to move from paf to work. the results of this study are consistent with several previous studies that have found a negative influence between the relationship of job satisfaction to auditor intentions shifting work from paf namely awalina (2015), setiawan & ghozali (2013), sijabat (2011), fitriany et al (2011), mulliawan et al (2009), latifah (2008), kalbers & cenker (2007). this study also supports the theory of nonconformity which states that job satisfaction perceived by an employee comes from things that are considered important and the extent to which they can be fulfilled (celik, 2011). the focus of this theory is on what is expected and what is obtained by employees. if the expectation is fulfilled, the employee will feel satisfied. these expectations can be in the forms of salaries, career promotions, partners and work environment and good relationships with supervisors. this finding proves that in the field, job satisfaction is one of the factors that influence the intention to move the auditors’ work. the more satisfied the auditor for his work, the lower the auditors’ intention to leave the pafs. furthermore these findings support a model of the relationship between job satisfaction and employee turnover found by mobley (1977). mobley (1997) explained that before deciding to really leave the organization there are several stages generally carried out by employees, but the most important stage is when he feels satisfaction or job dissatisfaction. thus job satisfaction is one of the important factors that influence the auditors’ intention to leave the pafs. i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 136 hypothesis 8 stated that pay satisfaction has an indirect effect on auditors’ intention to leave the pafs which is mediated by accepted job satisfaction. however, the influence of mediation provided by job satisfaction is partial because there is still a direct relationship between pay satisfaction and auditors’ intentions to leave. this means that pay satisfaction to influence the auditors’ intention to leave can be through job satisfaction as a mediating variable or directly influences the auditors’ intention to leave. this finding is in line with the research conducted by lum et al (1998) that pay satisfaction has a direct or indirect effect on employees' intention to leave the hospital mediated by job satisfaction. however, the influence given to this study is not full but partial. the results of this study prove that in the field, pay satisfaction and job satisfaction are important factors for predicting intention to leave. however, pay satisfaction is the most important factor in testing hypothesis 8. this is caused by the effect of greater pay satisfaction directly on the auditors’ intention to change work compared to using job satisfaction as a mediating variable. hypothesis 9 stated that role conflict indirectly affects the auditors’ intention to leave which is mediated by work discontent denied. this means that job satisfaction does not mediate the relationship between conflict roles and auditor intentions to leave the pafs. this finding cannot support hypotheses that are formed based on role theory, incompatibility theory, phenomena and previous research conducted by jackson & schuler (1985), mobley (1977), poznanski & bline (1997) which stated that role conflict indirectly affects auditors’ intention to leave which is mediated by job satisfaction. this inappropriate result is caused by role conflict testing on job satisfaction that has no significant effect. this means that when an auditor feels role conflict, it will not have an effect on job satisfaction, but if the perceived role conflict is getting higher, the auditor will choose to leave the pafs directly. furthermore, the results of this study prove that in the field when the auditor experiences role conflict continuously, it will cause the auditor leave the public accounting firms without evaluating the satisfaction or dissatisfaction that the auditor feels before. hypothesis 10 stated that the ambiguity of the role has an indirect effect on auditors’ intention to leave through job satisfaction is accepted. this means that job satisfaction mediates the relationship between the role ambiguity of the auditors’ intention to leave in full or the role ambiguity to influence the auditors’ intention to leave must be through job satisfaction. this finding supports hypotheses that are formed based on role theory, incompatibility theory, phenomena and previous research conducted by jackson & schuler (1985), mobley (1977), poznanski & bline (1997) which states that the ambiguity of roles influences the auditors’ intention to leave that is mediated by job satisfaction. the results of this study indicate that job satisfaction fully mediates the relationship between the ambiguity of the role and the intention to leave. this means that the ambiguity of the role to influence auditors’ intention to leave must be through job satisfaction. job satisfaction is an expression of employees' feelings about whether or not their work is fun based on perceptions that have been experienced. job satisfaction is related to an expectation of what is desired what is expected and what is received. if this is not fulfilled, a sense of disappointment will arise which will lead to leaving the organization. furthermore, the findings in this study prove that in the field the ambiguity of the role perceived by the auditor cannot directly influence the auditors’ intention to leave, but must be through job satisfaction in order to influence the auditors’ intention to leave. in addition, based on the statement of cahyono (2008) who is positive from pasewark & strawser (1996) which states that conflict and role ambiguity negatively affect auditor job satisfaction through job satisfaction. this assumption is evident that role ambiguity is only able to influence the auditors’ intention to leave through job satisfaction reinforced by evidence of the path coefficient showing a negative direction (-0,100). so, it is a common thing when the auditor does not feel job satisfaction will choose to leave the pafs because the auditor is a profession that demands professionalism, independence, has a high risk and spends more time on his work. i.p.h.setiawan,nurkholis,b.hariadi/journal of accounting and business education, 3 (2), march 2019 137 conclusion the results of this study provide empirical evidence that the intention to leave the pafs is determined by pay satisfaction, role conflict, role ambiguity and job satisfaction. the results of this study also provide additional contributions to theory of reasoned action, theory of nonconformity, role |theory and theory of equity in predicting auditors’ intentions to leave. in addition, this research can also be used as source of information for the management of the pafs specifically in the east java region to pay more attention to the formulation of better payroll policies, quality control systems and recruitment systems for junior staff. this study has several limitations that need to be improved. the first limitation found in this study is that the number of samples used in this study cannot be determined, so the sample was determined based on the number of lines in this study as standard. the next study is expected to be able to find out the number of auditor population working in the east java pafs so the number of sample can be determined for a study with similar characteristics. time limitation is another constraint faced in this study. the pafs throughout the east 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(1998). emotional exhaustion as a predictor of job performance and voluntary turnover. journal of applied psychology, 83(3), 486–493. https://doi.org/10.1037/00219010.83.3.486 m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 14 indonesian government's budgeting responses during the covid-19 pandemic: multi-level governance and actor-network theory perspectives muliadi 1 aji sofyan effendi 2 muhammad ikbal 3 1,2 department of economics, faculty of economics and business, mulawarman university, indonesia 3 department of accounting, faculty of economics and business, mulawarman university, indonesia email: muhammad.ikbal@feb.unmul.ac.id doi: http://dx.doi.org/10.26675/jabe.v6i1.16517 abstract: indonesia is one country affected by covid-19. the indonesian government has responded this outbreak by implementing an open policy, not a total lockdown as implemented in several countries in asia and europe. our study aims at exploring the budget policy response to the crisis conditions caused by the covid19. this study focuses on three main issues related to how the central government budget policy responds to the local government level, how the government policies provide a stimulus for the private sectors and msmes, and the concrete steps in handling the education aspect. a qualitative paradigm through a netnographic approach was used to analyze these three issues. the data were collected using both mass media content and document analysis within a period of 1 april -31 august 2020. the analysis instruments consisted of a multi-level governance and actor-network theory. the research findings show that technology as a non-human actor plays an important role in building humans in solving problems existing in the multi-level governance involving central government, local governments, msmes, and education sectors. this study may provide some contributions on how to deal with the state crises due to the pandemic and other consequences. article history received: 21 october 2020 revised: 10 february 2021 accepted: 14 august 2021 keywords netnography, actornetwork theory, multilevel governance, budget, crisis management, covid-19 citation: muliadi, effendi, a. s., & ikbal, m. (2021). indonesian government's budgeting responses during the covid-19 pandemic: multi-level governance and actor-network theory perspectives. journal of accounting and business education, 6(1), 14-31 introduction coronaviruses are a large family of viruses causing diseases in both humans and animals. in humans, the coronaviruses generally cause respiratory infections, from the common cold to serious illnesses, such as middle east respiratory syndrome (mers) and severe acute respiratory syndrome (sars). a new type of coronavirus was discovered in humans since december 2019 due to the outbreak in wuhan china later known as severe acute respiratory syndrome coronavirus 2 (sars-cov2) and resulted in coronavirus disease-2019 (covid-19). because it is considered as a new disease, no immunity journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v6i1.16517 m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 15 has developed in humans and eventually resulted in hospital treatments (fakari & simbar, 2020). covid19 is transmitted through both direct and indirect contact with humans and other materials. when viewed from the materials, the viruses have different survival rates. the quarantine period for covid-19 is 14 days. it means that it will take 14 days from the infected person to show the symptoms. due to the current pandemic conditions, indonesia has a unique case in response to the spread of covid-19. while the other countries responded the pandemic by implementing a total lockdown, indonesia chose to implement an open policy or large-scale social restrictions (known as psbb/pembatasan sosial berskala besar). the open policy allow the country to continue its economy and result in less damage compared to others because the citizens continued working as usual that the businesses were less affected (lau et al., 2020; mahato et al., 2020). one reason why indonesia moderately responded to the pandemic since the government wanted to soften the blow of covid-19 pandemic on its economy (fakari & simbar, 2020). the effect of closing businesses could result in the decreasing total output of 15% or more in both developing and developed economies. the outputs could even fall up to 25% for the medium economy (nicola et al., 2020; becker et al., 2016). the indonesian government has eventually realized that covid-19 has huge impacts, both on health and socio-economy. to reduce the impacts, the government then issued a series of extraordinary policies to prioritize the state budgets on public health and safety as well as the business world protectionto save humans from various life aspects (eri kurniawansyah hs*, amrullah, m. salahuddin, muslim, 2020;silalahi & ginting, 2020). to save the economy during this pandemic, the government has announced several policies (silalahi & ginting, 2020). first, the president of the republic of indonesia has ordered all ministers, governors, and mayors to cut their non-priority expenditures in the state budget (known as apbn/anggaran pendapatan dan belanja negara) and regional budget (known as apbd/anggaran pendapatan dan belanja daerah). second, the president has asked both central and local governments to reallocate their budgets to accelerate the eradication of covid-19 impacts from both health and economic perspectives through the instruction of president number 4 year 2020 on refocusing activities, budget reallocation, and procurement of goods and services to accelerate the covid-19 handling. third, the president has asked both central and regional governments to guarantee and maintain the availability of basic commodities by ensuring that the purchasing power of people, especially the lower class. fourth, the president has asked the cash for intensive work program to be reproduced and multiplied, with a condition that the program must comply the coronavirus prevention protocol, such as maintaining a safe physical distancing. the government has specifically focused on the cash for intensive work programs in several ministries, such as ministry of public works and public housing, ministry of transportation, ministry of agriculture, and ministry of maritime affairs and fisheries. fifth, the government has given an additional cash of idr 50,000 per week per family to the cheap grocery card-holders for six months. thus, they will receive idr 200,000 per month. to implement the additional cash allocation on the cheap grocery cards, the government has provided the budget of idr 4.56 trillion. since considered as a national disaster, the role of government is greatly needed. according to taekratok et al., (2018), a disaster is described as a natural or human-induced emergency that suddenly results in broad negative economic and social consequences for the affected population. one of the main consequences is the influence of state budget and allocation of funds. when a disaster occurs, it is expected that the government makes some efforts to minimize the consequences. putra & matsuyuki (2019) stated that when a natural disaster strikes, some people ask whether or not the government have made some efforts. conversely, the citizens tend to automatically see the situation as a serious public problem urgently requiring the government actions. thus, when a crisis occurs, it becomes the government’s challenge to immediately respond to the citizens’ demands. the affected community is eagerly awaiting the need for a quick response, while the available response options are limited (avery et al., 2016). this is because decision-making and service delivery systems are not adequately effective and, in this situation, decisions need to be made immediately and outside the existing jurisdiction. the actions made to deal with the crises and consequences may become complex and uncertain. moreover, general guidelines for crisis management did not exist (bundy et al., 2017). according to asatryan et al., (2017), m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 16 the government’s administrative capacity and resources will be overwhelmed by the people’s demands in crises. when demands exceed the government’s jurisdiction, higher jurisdiction levels will assist the lower ones by supporting or replacing the existing activities. this is determined by the budget and how to allocate funds. taekratok et al., (2018) explained that there are many areas of budget looking at various political-economic structures and how to deal with passivity, policy, power, governance, and other selective matters. the main purpose of this research is to explore the government's budget in response to the covid19 pandemic in indonesia. to meet the research objectives, this study will focus on the governance relationships at various levels of national and regional actors in indonesia. in this study, budget crisis management will focus on the covid-19 pandemic widely spread throughout the world in 2020. it is important to investigate the government's budget in response to the covid-19 pandemic through the views of actor-network theory (ant) because many actors are involved in the budget policy determination, including human actors, such as politicians, state officials, as well as central and local governments. these actors are responsible for allocating the resources equally for different purposes, such as schools and health cares as well as both non-profit and profit organizations. due to the explained backgrounds above, this study will present the related actor-network theory (ant), a research approach in the form of qualitative research using a netnographic approach, results and discussion, and finally, conclusions and limitations of this study. literature review the theoretical framework will present a literature review on crisis management, budgeting, and multi-level governance in the hierarchy of government in indonesia. this is followed by the explanations of the selected theories, actor-network theory (ant), and why the theories are relevant. crisis management the spread of coronavirus or covid-19 is a crisis experienced by every organization, both corporate and non-corporate organizations (burgner et al., 2020). therefore, companies must prepare methods and strategies to prevent from the crisis which may become the obstacles for the companies running their businesses, or commonly known as crisis management (gill et al., 2020). before understanding the crisis management, it is necessary to figure out what a crisis is and how it can happen. crisis is a very dangerous situation which can cause a big impact on everyone (bundy et al., 2017). crises can be in the form of outbreaks, natural disasters, technology, poor management, terrorism, warfare, scarcity, etc. meanwhile, crisis management can be defined as a process discussing an organization with a major event which threatens to harm the organization, stakeholders, or general public (liff & erickson, 2017). there are three most common elements used in defining a crisis: threat to organization, surprise, and short time decision. crisis management also contains crisis communication. crisis communication is the crisis management key success. crisis conditions must be conveyed to all elements, consisting of society, company customers, and employees (vardarlıer, 2016). budgeting in crisis during the crisis, especially during the outbreak of disease pandemic, the resources related to the public budget are insufficient and uncertain. in such conditions, the government must manage the tradeoffs, cutbacks, reallocations, program terminations, organizational corrections, changes of rights, and non-negotiable contracts (becker et al., 2016). thus, the government and agency responses to the budget uncertainty affect many aspects, purchasing process, time of expenditure, and budget realization. according to the agency managers of government accountability office (gao) in 2017, the united states tried to be flexible in running the budgets, while the government agencies follow the controls made by the congress to ensure the financial control and accountability. due to several obstacles, such as the m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 17 purpose of using funds and the number of funds, these will affect the distribution of funds during the budget period of one year. furthermore, the meaning of crisis management in an organization is that the organization properly responds the unexpected environmental changes, natural disasters, major accidents, or emergency events such as wars, terrorisms, earthquakes, nuclear plant accidents, tsunamis, and volcanic eruptions considered exceptions to the normal insurance claims. it means that the insurance premium will not be compensated for these events. therefore, there is no risk management topic since originated from the insurance management, but a crisis management topic. an organizational crisis management is different from a national or administrative crisis management, because in the worst-case scenario, if something goes wrong, it can lead to bankruptcy and the organization will be destroyed (khodarahmi, 2009). actor-network theory actor-network theory (ant) is a theory often used as an approach or methodology for social studies (shim & shin, 2016). in social theory, nature and social world exist in a constantly-changing interconnected network(dedeke, 2017). the theory shows that all factors involved in a social situation are at the same level. therefore, external social factors are not in the network. first, the term 'network' is used by latour (2005: 131) ( in burga & rezania, 2017) to describe the implicit boundary between characters which try to deal with a rule and how actors distribute and define roles and organize others to play those roles. second, the term 'actor' indicates that something is acting or that an individual's activities are acceptable to others (latour, 1996: 373 in (hoffmann et al., 2017)). roles can be characterized as technical, political, social, or bureaucratic matters and can also be organizations, people, or machines. thus, the term 'actor-network' means that actors are networks and their actions and characters are transformed by human and non-human actors (burga & rezania, 2017). the budget preparation process, especially during emergencies, certainly has a special strategy and involves many parties, so to examine the government's budget in response to the covid-19 pandemic by focusing on the mlg (multi-level governance) relationship between various national and local actors in indonesia, the actor-network theory (ant) is used as human and non-human actors involved in the budget process. mlg focuses on the relationship between different levels of government where responsibilities for policy and implementation overlap (zapata-barrero et al., 2017). moreover, this concept focuses on the vertical and horizontal relationships between different levels and at which nongovernment actors fit in the governance process (hoffmann et al., 2017). in general, ant is more properly presented in the empirical studies involving the accounting and state finance since focusing on various actors in the actor-network system (modell et al., 2017). in the process of government budgeting, there is a power relationship through the ant perspective to explain how the power mechanism is created in an organization. the process is a collaboration between various actors which try to gather resources (luscombe & walby, 2017). the budget in indonesia has changed due to the covid-19 pandemic in terms of allocation of funds and additional expenses related to the emergency budgets. the budget geographically allocates resources to the more affected areas, such as dki jakarta, east java, central java, west java, and several regions in kalimantan and sulawesi. these conditions can also affect many sectors in indonesia such as smes, education, health care, as well as large and medium scale businesses. through the ant perspective, this study aims at examining the budget response to the covid-19 pandemic by focusing on the mlg relationship between various central and local government actors in indonesia. methods the main paradigm of this research is qualitative. according to graneheim et al. (2017) the research approach, it can be either deductive, inductive, or abductive approach. inductive approach is more appropriate than deductive approach when using a qualitative paradigm (cho & lee, 2014) because the study is based on an empirical collection of the indonesian government's budget response, which is then analyzed through the lens of actor-network theory. according to bitektine (2008), qualitative m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 18 methods are characterized by complexity due to the differences in readers' views. because the results can be manipulated by the researchers' interpretation, the results obtained are not objective (moretti et al., 2011). to obtain higher validity and reliability in qualitative research results, it can create in-depth knowledge of the research area (noble & smith, 2015). this research would like to conduct an in-depth analysis to the government's responses in the form of budget policies during the covid-19 pandemic situations and conditions, focusing on the multilevel governance (mlg) relationships between various national and regional actors in indonesia. meanwhile, the empirical data were collected between 1 april 2020 and 31 august 2020. the research data were collected from various media contents by considering the pure truth based on information from the other similar media. the media are selected based on reputation and independence of various media over the past 10 years. interpretations were the made based on the results of media contents to have a broad narrative and easy to understand in both academic and public domain. netnographic approach kozinets, (2015) defines netnography as an extension of ethnographic approach. "netnography, or ethnography on the internet, is a qualitative research methodology adapting the ethnographic research techniques to study the emerging cultures and communities through the computer-mediated communication". in 2000, hine published a book entitled virtual ethnography which introduced the idea of using internet as a research area in which the researchers can use the traditional ethnographic approaches in virtual spaces (sandlin, 2007). using an internet-based approach is very effective because the covid-19 pandemic has prevented using the primary data, for example through interviews. the information obtained from internet is constantly updated and allows researchers to obtain the relevant data. however, netnography has its challenges. the virtual world consists of large number of data, which can lead to the excessive information for the researchers. thus, the researchers should carefully select and evaluate relevant data for the research questions. one recommendation from kozinets, (2015) is to first look for an overview on the related data, before deciding which data to use. however, netnography, in this case, provides a good access to both primary and secondary data resulting in a rich understanding of public accounting sector (aleksandrov et al., 2018), especially during the pandemic in which most information is internet-based and can be seen in the press releases. mass media analysis mass media plays an important role in the development of a country. political parties and governments see mass media as a powerful and influencing source. the businessmen even recognize the importance of media not only as advertising but also content-influencing channels (feezell, 2018). news provided in media can affect the stock prices, cause the sales to fall, cause the companies to fall, etc. (strycharz et al., 2018). besides, media also provide the latest information about changes in budgeting policies in indonesia during the covid-19 pandemic. mass media analysis is a part of content analysis widely using the research methodology. content analysis is a research method used to study a broad range of narratives, which can be documented from various organizations as well as contents from newspapers and magazines (lytvynenko et al., 2017). a mass media analysis is an "objective" research method (jones et al., 2016). mass media can provide information related to areas affected by the covid-19 pandemic and resource allocations to those areas. however, according to vladimirova et al., (2019), it is impossible to produce the completely objective outcomes, especially when it comes to media because media are open to different interpretations and not completely objective. a mass media analysis can provide insights to the popular cultures represented in the related media and allow researchers to explore how the contents of media describe the society and potential effects by identifying trends and having a thorough competitor analysis (sheng & lan, 2019). m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 19 document analysis one way to collect the data in content analysis using the netnography approach is through document analysis (tavakoli & wijesinghe, 2019). document analysis is a procedure to evaluate or review documents, not only in the electronic forms, such as materials transmitted through internet but also in printed versions. document analysis involves data interpreted and examined to gain understanding and develop empirical knowledge (whalen, 2018). document analysis is applied to understand government reports, especially those related to budgeting. document analysis largely serves as a complement to diverse research methods (whalen, 2018) and will be the case in this study. document analysis will complement a mass media analysis to follow up on various government programs related to the handling of covid-19 pandemic in indonesia. results the outbreak of covid-19 pandemic in indonesia based on the explanations above, the early emergence series of covid-19 pandemic outbreak are highly familiar to the world community. china is listed as the country first reporting the covid-19 cases in the world. as quoted from the kompas online mass media (https://bebas.kompas.co.id) which reviewed the first phase, china reported the existence of this new disease on december 31, 2019. at the end of 2019, the world health organization (who) office in china received a notification related to a form of the unknown-cause pneumonia. the acute respiratory infection which attacks lungs was detected in the city of wuhan, hubei province, china. according to the authorities, some patients were traders operating at the huanan fish market. this kompas online media page (https://bebas.kompas.co.id) reviewed that the president of the republic of indonesia, joko widodo, officially announced the first case of covid-19 in indonesia at the state palace on march 2, 2020. two indonesian citizens who had the positive covid-19 made a contact with some japanese citizens coming to indonesia. an indonesian citizen first died caused by the covid-19 was in solo on march 11, 2020 at the age of59-year-old man, after attending a seminar in bogor of west java on february 25-28, 2020. in the same week, patient # 01 and patient # 03 were declared cured. on march 13, 2020, they were officially declared cured and allowed to leave the hospitals the first person infected by the covid-19 was cured in indonesia. patient # 02, an elderly aged 64 years old, has also managed to overcome the covid-19. a month after the emergence of covid-19 in indonesia, for the first time, it was recorded that the cure rate for people with covid-19 was greater than the number of people who died from the virus. kompas online mass media (https://bebas.kompas.co.id) wrote that on april 16, 2020, the data from the task force for accelerating the handling of covid-19 showed that 548 patients recovered, while 496 patients died. however, data on the patients recovered from covid-19 exceeding the number of died patients was not a sign that the outbreak of covid-19 will be over soon in indonesia. so far, the number of covid-19 cases in indonesia continuously increases. in few months after the first officially declared, that the number of covid-19 cases in indonesia has reached more 5,500 cases. m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 20 figure 1. movement and addition of positive covid-19 cases in indonesia (source: covid-19.go.id) government policy: large-scale social restrictions the results of mass media analysis in april 2020 showed that the covid-19 cases have continuously increased in various regions and urged the local governments to take specific actions, such as implementing the large-scale social restrictions in various regions. the large-scale social restrictions are listed in the minister of health regulation no. 9 year 2020, on the guidelines for largescale social restrictions in the context of accelerating the covid-19 handling. this minister of health regulation is derived from the government regulation no. 21 year 2020 on the large-scale social restrictions in the framework of accelerating the covid-19 handling. based on the detik online media page (https://news.detik.com: april 20, 2020), there are six core psbb activities in article 13 of the minister of health regulation no. 9 year 2020: 1) school and working activities 2) restrictions on religious activities 3) restrictions on activities in public places or facilities 4) limitations of social and cultural activities 5) limited transportation modes 6) restrictions on other activities specifically related to the defense and security aspects this regulation does not contain sanctions for people who violate the large-scale social restrictions. however, the implementation of large-scale social restrictions through the governor, mayor, and regent regulations contains sanctions for communities and business entities if not complying the social restrictions. some areas with a very high growth of positive covid-19 patients will apply the m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 21 large-scale social restrictions. the implementation of large-scale social restrictions in indonesia is based on the following reviews made by detikcom media (https://news.detik.com: 20 april 2020): 1) the large-scale social restrictions implemented in jakarta. effective date: 10-23 april 2020, possibly extended sanctions: one year in prison and a fine of idr 100 million. 2) the large-scale social restrictions implemented in bandung. effective date: 22 april-5 may 2020. sanctions: verbal warning, warning, police records against violators, detention of identity cards, restrictions/termination/dissolution of activities, temporary closure, suspension, and license revocation. 3) the large-scale social restrictions implemented in surabaya. effective date: the governor of east java has sent a request to implement the large-scale social restrictions to the minister of health. terawan sanctions: still learning from the other local police department. 4) the large-scale social restrictions implemented in tangerang. effective date: 18 april-3 may 2020. sanctions: verbal warning, written warning, temporarily forced confiscation of goods or tools having a potential to cause violations, temporary forced suspension of activities, suspension of permits to revocation of permits. 5) the large-scale social restrictions implemented in makassar. effective date: 24 april-7 may 2020. sanctions: penalties according to statutory provisions including the administrative and criminal sanctions. government policy (again): new normal after seeing the decline in economic conditions since the implementation of large-scale social restrictions in early april 2020 until june 2020, the indonesian government issued a new policy, namely the adaptation of a new life (new normal). new normal can be considered necessary because people need to continue their activities even with different cultures and behaviors from the previous period. the government also states that this policy is not arbitrary, because there are some underlying scientific factors. the plan to implement the new normal in indonesia, of course, will have an impact on then previously stopped or limited several activities and will reopen several regulations. these activities include economic activities, such as in shopping centers up to the worship places. even though until now there is still no vaccine to deal with covid-19, the government considers that the implementation of this new normal can still make people productive. as reviewed from kumparan online mass media (https://kumparan.com/), achmad yurianto as the spokesman for the covid-19 handling in indonesia, a new order (new normal) needs to be implemented so that people do not give up on the covid-19 pandemic. "now the only way to do is not giving up doing nothing, but we have to maintain our productivity in this situation. to be still productive but safe from the covid-19, a new order is greatly required," said achmad yurianto (https://kumparan.com/). reporting from the official website from the ministry of health (https://www.kemkes.go.id/), achmad yurianto said that the meaning of new normal is new habits and behaviors based on the adaptation to civilize a clean and healthy lifestyle. this is the meaning of new normal in indonesia. keep your health and don't forget to wear your mask when traveling. economic consequences on wednesday, august 5, 2020, the statistics indonesia (https:/bps.go.id) released the indonesian economic growth figures for the second quarter of 2020. as predicted, the indonesian economy has decreased by -5.32 percent (year by year). the decrease was more than the previous prediction made by the minister of finance. the minister has predicted that the indonesian economic growth in the second quarter will experience a decrease ranging between -3.5 and -5.1 percent. the negative figure in this quarter had added to the poor economic growth records in 2020. in the first quarter, the indonesian economic growth has been recorded at 2.97 percent. this achievement was lower than the previous prediction by 5 percent. the economic growth in the first and second quarters, which tends to decline, cannot be separated from the influence of covid-19 pandemic lasted more than four months. since first announced on march 2, 2020, to august 6, 2020, the number of positive covid-19 cases in indonesia has m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 22 reached 118,753 people. what are the details of covid-19 impact on the indonesian economic movements? figure 2. indonesian economic changes in quarter i and quarter ii of 2018-2020 based on the previously normal and recent conditions of covid-19 pandemic (source: statistics indonesia, 2020) the indonesian economic growth in the first and second quarters of 2018-2019 was around 5 percent. the decline started when the pandemic began in 2020. growth in the first quarter of 2020 was recorded at 2.97 percent. if recalculated, at same quarter of 2019, the growth was recorded5.07 percent. it means that there is a difference of -2.1 percent. meanwhile, the difference in the second quarter was larger. if calculated between the first quarter of 2020 (-5.32 percent) and the second quarter of 2019 (5.05), there was a difference of -10.37 percent. the record figures were different when compared to the "normal" or pre-covid-19 conditions. when comparing the first and second quarters of 2019 with those of 2018, the figures tend to be stable with a fairly small difference (https://tirto.id/: 11 august 2020). discussion by using the ant and mlg theoretical perspectives, the indonesian government's budget policies in response to the covid-19 pandemic spread throughout indonesia were explored using in-depth analysis and obtained the empirical results from various sources in various national mass media. this analysis includes the budgeting responses during the pandemic, budget allocations to local governments, how the budget interventions supported the financially-affected private companies, and how the budgetary measures are anticipated in education sectors. budgeting responses to the occurring pandemic the ministry of finance has prepared the budget to handle the outbreak of covid-19 until 2021. meanwhile, the government has opened opportunities to allocate funds to handle the covid-19 pandemic until 2022. in august 2020, the government has prepared the 2021 state budget draft (known as rapbn/rancangan anggaran pendapatan dan belanja negara). the government has also designed one supporting package to handle the continuing covid-19 pandemic in the following year. the 2021 state budget draft is planned submitted to the house of representatives (known as dpr/dewan perwakilan rakyat) in september 2020. the government hoped that this draft budget could be the right step for the government in supporting the business world and communities affected by the covid-19 pandemic. as reviewed in katadata online media (https://katadata.co.id/ 21 april 2020), the budget for handling the covid-19 pandemic was likely to increase in the following years due to the widening budget deficit of m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 23 above 3% as regulated in the government regulation in lieu of law (known as perppu/peraturan pemerintah pengganti undang-undang) no. 1 year 2020 on handling the covid-19 pandemic and its impacts on economy. the government regulation in lieu of law will be valid for three years starting from 2020 up to 2022. in 2023, it is expected that the state budget deficit can be controlled below 3%, by law number 17 year 2003 on state finance. budget allocation policies in the affected areas as reviewed in the national media detikcom (https://travel.detik.com/dated 3 august 2020) that the national disaster management agency has released a list of districts/cities with high risk spread of the covid-19 pandemic. until july 26, 2020 there was a positive covid-19 increase from 35 to 53 regencies/cities included in the red zone. "based on the results of 15 public health indicators, 53 municipalities were in high risk of covid-19 classified into 185 moderate zones and 182 low zones. meanwhile, 51 regencies/cities which were classified into the green zone have no new cases for the last 4 weeks and the cure rate of 100 percent. however, there were 43 regencies/cities had no new cases", said a member of covid-19 handling task force expert team, dewi nur aisyah, in a bnpb broadcast. from this news story, it was seen that apart from the capital city of jakarta and several areas in java island, some other areas have also been heavily invected by the covid-19 in most provinces throughout indonesia classified into the red zone due to the rapid spread of covid-19. the government is highly responsive in preparing a budget strategy to handle such conditions. in addition to the state budget allocations, the government also allocates budgets to local governments, through the regional budget transfers. the regional budget reallocation for handling the covid-19 has reached idr 63 trillion. this was based on the data held by the ministry of home affairs. this reallocation was used for three main sectors during the outbreak of covid-19 pandemic, including the capacity building for health sector, social safety, and stimulus dealing with the economic impacts. the total budget used for the development of health sector was approximately idr 25 trillion. meanwhile, the reallocation budget used for social safety was idr 26 trillion, and approximately idr 10 trillion was used for the economic stimulus. as previously mentioned, several regions have received the direct assistance policy packages for the communities. as reviewed in kontan media (https://national.kontan.co.id/6 august 2020), the government ensured to provide the direct cash assistance (known as blt/bantuan langsung tunai) to employees with the salaries of below idr 5 million per month. the direct cash assistance to employees in the form of cash of idr 600,000 was directly transferred to each employee who deserved receiving the assistance. the chief executive committee for handling the covid-19 and economic recovery, also the minister for state-owned enterprises, erick thohir, stated that the direct cash assistance to employees with the salaries of below idr 5 million per month was applicable with certain conditions. the government through the ministry of finance changed the social assistance distribution scheme in the form of direct cash assistance for village funds. this regulation was stated in the minister of finance regulation number 50/pmk.07/2020 concerning the second amendment to 205/pmk.07/2019 on village fund management. through this regulation, the government increased the amount and time frame for providing the direct cash assistance through the village funds to the communities. so, the total direct cash assistance, which was previously idr 1.8 million per beneficiary family (known as kpm/keluarga penerima manfaat), has been increased to idr 2.7 million/beneficiary family. this effort was the initial stage of mlg system made by the indonesian government because the highest level (government) have assisted the lower levels (sectors and regions) (zapata-barrero et al., 2017). these budget measures and policies were intended to reduce the spread of covid-19 and anticipate the vulnerability of life due to the outbreak of covid-19 in this case, to both public actors (laasch, 2019). this is also an example of vertical relationship (zapata-barrero et al., 2017) between different levels as explained by ant, because the ministry was lack of authority over the power, resources, and government structures in responding to the changes in public policy (zapata-barrero et al., 2017). therefore, different actors and levels are required to work together to cope with the changes resulted from this pandemic (shim & shin, 2016). as previously mentioned, indonesia has developed the mlg system at the national, m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 24 provincial, and district/city levels to explore the relationship between different levels of government and interactions with different types of the involved actors (burga & rezania, 2017). for example, the government has abolished the jurisdiction system to create collaboration between individuals and government. in summary, this budget response affected not only districts and cities, but also public and private companies, universities, and other institutions within the central government. support for private sectors and msmes the covid-19 pandemic is not only considered as a health disaster, but also has caused chaos in the economic sector. not only large industries, the covid-19 pandemic has also greatly impacted the smes in indonesia. a recent study said that the covid-19 would cause indonesia to experience a decline of 0.1% in its economic growth in 2020. the real impacts caused by covid-19 on the sme sector in indonesia are as follows. difficulties for private sectors and msmes in facing the covid-19 the impacts of covid-19 pandemic have caused almost 70% of micro, small, and medium enterprises (msmes) out of businesses. this has a potential to continuously increase if the pandemic continues over a long period. some of the real impacts have been felt by the msmes as reviewed from the following detikcom, kompas, and kumparan mass media sources: a) the decrease in buying and selling activities social distancing which was intended for people to avoid a wider spread of covid-19 has more or less contribution to reduce the trading activities in communities, such as warteg entrepreneurs in jakarta. the results of interviews with the head of warteg nusantara community (known as kowantara/komunitas warteg nusantara), mukroni, it was stated that the covid-19 pandemic has made the turnover of warteg entrepreneurs in indonesia, especially in jabodetabek, decreased by 50 percent. fortunately, according to research conducted by the center for economic and social studies (cess) and the center for micro and small enterprise dynamic (cemsed), the smes in indonesia were unique because they could develop and survived during the crisis. this was proven by the initiatives made by the warteg entrepreneurs who preferred to continue operating by changing their selling ways by serving through the packaged (take-home) purchases (take home) instead of on-the-spot serving purchases. b) difficulties in obtaining raw materials the social distancing policy chosen by the indonesian government has disrupted the production activities. some companies have adopted a work from home policy and some others decided to lay off their employees. according to the latest data from the jakarta manpower, transmigration, and energy office, 30,137 workers reported lost their jobs due to the mass layoffs, while 132,279 other workers lost their incomes because they were sent home without wages. the domino effects of the laid-off workers could be seen from the extreme decline of production capacity. this condition has led to the scarcity of raw materials for home industry production and eventually resulted in extreme price increases. for example, the sme sectors for cake and bread makers were confused by the soaring prices of eggs and sugar. as a result, the product selling price also increased. this choice was considered risky as the people's purchasing power was sluggish. c) hampered distribution the government continuously strived to maximize the distribution channels throughout indonesia through a massive infrastructure development in indonesia. the project has even been started since the president, joko widodo, served for the country in his first term. the results were quite significant. the distribution channels were faster, the price gap could be cut, and people's economic pace got faster. however, the covid-19 has "destroyed" them all. according to data from the indonesian toll road association (known as ati/asosiasi jalan tol indonesia), the average daily traffic of all toll roads in indonesia has decreased between 40-60 percent since the beginning of march 2020. the extreme decline occurred in the jabodetabek areas. in february 2020, the number of passing vehicles reached 3.19 million vehicles, while at the end of march; there were only 1.06 million passing vehicles. this condition was expected to continue during the covid-19 pandemic. the cessation of distribution activities was certainly m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 25 detrimental to the sme business actors. they were confused distributing their products, especially for those beginning to expand their markets outside of the regions, or even across islands. d) exposed service providers to the impacts of covid-19 not only smes engaged in home production sectors, but also those engaged in services were reported having a significant turnover decline. for example, many barbers were forced to lose their incomes due to the social distancing policies. those working as casual daily laborers, such as construction workers, make-up artists, wedding organization workers, wedding photographers, and others were reportedly having trouble earning incomes because several projects had to be postponed due to the covid19 pandemic. luckily, the government has recently been braved enough to take a policy of not imposing lockdowns, so that some smes in the regions still have the opportunities to find ways to 'survive'. besides, several other policies were considered quite helpful for the sme actors, for example providing more flexible credits, free and discounted electricity of up to 50 percent, and easy capital injection programs. this can also be seen from the steps taken by the financial services authority to issue a countercyclical policy as stated in press release no. hm.4.6/32/set.m.ekon.2.3/03/2020 by the coordinating ministry for economic affairs of the republic of indonesia. budget response from government the government has launched several assistance programs for people affected by the covid-19 pandemic. the assistances were in various forms, ranging from those in the form of cash, electricity tokens, to telephone credits. some of these assistances are still distributed and ongoing. 6 government assistances for the indonesian people during the covid-19 pandemic are as follows: 1) pre-employment card. the government has provided assistance in the form of pre-employment card, in which the recipient will receive idr 3,550,000 during the program. the pre-employment card is a competency development program for the job seekers and workers or laborers who have been permanently terminated. it is known that the details of the assistance include a training assistance fee of idr 1 million which cannot be disbursed (only for training costs), the incentives to complete the training of idr 600,000 per month for 4 months, and for job survey of idr 150,000. 2) msme working capital assistance. the government has also provided assistances to the msme actors by distributing funds up to idr 2.4 million, given in one transfer through the recorded accounts of msme actors. the banks distributing those assistances are bank rakyat indonesia (bri) and bank negara indonesia (bni). the distributions for the first phase of capital assistances to beneficiaries have been previously made. however, several requirements must be fulfilled by the msmes, namely the business actors must be the indonesian citizens, having a citizen identification card (known as ktp/kartu tanda penduduk), having a micro business proven by a proposal letter and the proposers are not the members of state civil apparatus, indonesia national force/indonesian national police, or the employees of state-owned or regional-owned enterprises /. 3) salary subsidies. the government has assisted the private employees with salaries of less than idr 5 million and active participants in bpjs employment. the distributed assistances were in the form of cash worth idr 600,000 per month. the recipients cumulatively got a total of idr 2.4 million gradually transferred to their accounts. the employees receiving the assistances were not differentiated based on their employment status, whether contract or permanent employees. not only to the private employees, were assistances also given to the honorary employees registered in bpjs employment with the salary of below idr 5 million. 4) cash social assistance. the cash social assistance recipients were in kulonprogo regency. the government through the ministry of social affairs has distributed the assistances to the communities, namely cash social assistance (known as bst/bantuan sosial tunai) worth idr 500,000. the distribution of this assistance was provided to help people affected by the covid-19. the assistances were targeted for the families classified into the beneficiary families (known as kpm/keluarga penerima manfaat) of the non-cash food assistance program (known as bpnt/bantuan pangan non-tunai). m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 26 5) electricity token from the state electricity company. not only social assistance, the government has also provided free electricity subsidies for the 450 va users and 50 percent discount for the 900 va users. the government has also expanded incentives for the electricity bills. the targeted customers were those in social, business, and industrial segments. 6) money credit for the state civil apparatus. the government has also provided various credit allowances aiming at supporting the working activities recently made at home. this idr 400,000 credit assistance was applicable for the state civil apparatus. the accepted amount of assistance for data and communication packages was for the officials at the levels of echelon i and echelon ii equivalent to idr 400,000 per month. meanwhile, the officials at the levels of echelon ii or equivalent and below have received idr 200,000 per month. apart from the state civil apparatus, the students participating in the distance learning activities (known as pjj/pembelajaran jarak jauh) and the communities involved in online activities incidental in nature were also given free data packages. as previously stated, the private companies or msmes are also the components of mlg system functioning through collaboration that all parties are necessarily considered in times of crisis (shim & shin, 2016; zapata-barrero et al., 2017). furthermore, the government has also implemented some regulations covering various discounts for the pertamina fuel purchases for online motorcycle taxis. companies in indonesia have played an important role in terms of actor-network (ant) because they have made various contributions to the indonesian economy in terms of employment (shim & shin, 2016). when viewed from the mlg system, the company is at a local level (zapata-barrero et al., 2017). reviewed from talenta online media (https://www.talenta.co/), several companies have been recommended allowing the workers not to go to the office and stay at home when they are sick until they are fully recovered. even if the employee is found to have new symptoms in the form of coughing and shortness of breath, the company will recommend the employee to stop working and undergo a medical examination at the hospital. thus, companies must have provided the human resources information system (hris) features to help employees' needs. the freedom offered by the self-service mobile employees, such as talenta can meet the needs of employees at these times (https://www.talenta.co/). as mentioned earlier, companies as actors have provided labors and minimize their spending to the state in terms of subsidies (burga & rezania, 2017) and moderated pressures from the government to intervene (zapata-barrero et al., 2017). interventions in education sectors the outbreak of covid-19 has affected almost all countries throughout the world, even in all sectors, including economic, political, and education sectors. in education sectors, for example, all schools in 27 cities and regencies especially in west java were forced to close due to the covid-19 pandemic following all regions in indonesia at the end of march 2020. the face-to-face learning has been turned into distance learning (known as pjj/pembelajaran jarak jauh) both online and offline. how will the education process take place if face-to-face is eliminated? due to these changes, almost all elements were shocked and confused to find the proper methods to perform the learning processes in response to the consequences of this covid-19 pandemic. various problems also arose at the beginning of the changes due to this pandemic, starting from the readiness of education providers to the problems arising in various fields, such as the obstacles to access for students in both online or offline learning processes with the limited existing infrastructure. the government in this case as a policymaker has an important role in overcoming these various problems, namely to protect the rights to learn for the communities, especially for students. the government must also ensure that all regions have a complete and effective infrastructure in facilitating the students’ learning activities, both in central and local governments, and even up to the village administration levels, must be present to face the problems, especially in the education sectors. although the government has made various efforts to deal with the covid-19 pandemic, by issuing several policies related to education starting from issuing regulations so that learning can be more flexible and not stressful for the students, several rules are essentially to help ease the burdens. the indonesian citizens m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 27 were greatly affected by the covid-19 pandemic from the financial side, yet their rights to learn as indonesian citizens should be well protected. however, it is greatly expected that the government will take various other steps which are more effective to support various activities in the education sectors. the president, joko widodo has set the deficit rate in the draft of 2021 state budget posture at 5.2% from the gross domestic product (gdp). the widening deficit resulted in the additional spending on several budget items. this included the allocations for the education and health budget certainly larger than usual. as reviewed from cnbc media (https://www.cnbcindonesia.com/ 28 july 2020), the minister of finance, sri mulyani indrawati, in a press conference after attending the limited meeting has stated "education and health which increased the deficit here is a mandatory budget." thus, there will be an increase in the budget allocation for both education and health sectors in the next fiscal year of 2021. "we use the budget to improve both education and health sectors of respectively more than idr 30 trillion and idr 9 trillion due to this additional deficit". in short, one of the most important actors to invest in education is technology, which has played an important role in the learning processes during the period of covid-19 pandemic. the education sector budget will target various technology platforms, research funding, and locus expansion. the 2020 learning year has provided students with various opportunities to enroll in education in a faster manner and also deepens the students' knowledge in certain fields. due to the layoffs, dismissals, and traveling restrictions, many students have taken the opportunities to conduct their self-study at home. one of the most used platforms during the pandemic was zoom. similar to companies, schools have been operated at the local level. it means that the higher levels, such as different governments and authorities need to financially help lower levels by functioning the mlg system (shim & shin, 2016) in these uncertain times. conclusion as explained earlier, this research focuses on the analysis of budget policy responses made by the indonesian government when facing the covid-19 pandemic widely spread throughout indonesia. the empirical data were initially presented ranging from data on the outbreak of covid-19 starting from early march and continuously developing to august 2020. after the data on the spread of covid-19 suspects have continued to increase, the government began to issue a policy called large-scale social restrictions (known as psbb/pembatasan sosial berskala besar). after several months, it impacted on the weakening economy, until the government issued a new policy called adaptation to new life or (new normal). as previously predicted that there would be an economic impact due to the outbreak of covid-19, the government then released the indonesian economic growth figures in the second quarter of 2020, the indonesian economy has decreased by -5.32 percent (year by year). based on the empirical data and research purpose aiming to analyze the budget policy responses made by the indonesian government in facing the covid19 pandemic, this research focused more on several government responses starting from the affected regencies/cities up to the budgeting responses on private, msme, and education sectors. the regional budget (known as apbd/anggaran pendapatan dan belanja daerah) reallocation for handling the covid-19 has reached idr 63 trillion. this is based on data provided by the ministry of home affairs. the budget reallocation will be used for three main elements during the covid-19 pandemic including the capacity building for health sector, social safety, and stimulus dealing with the economic impacts. the total budget used for the development of health sector is around idr 25 trillion, and some regions have even received the policy packages for direct assistance to the society. the government through the ministry of finance has changed the social assistance distribution schemes (known as bansos/bantuan sosial) into the direct cash assistance (known as blt/bantuan langsung tunai) for the village funds. the government has increased the length and time frame to provide the direct cash assistance as the village funds to the society. m. muliadi, a. s. effendi, m. ikbal/journal of accounting and business education, 6 (1), september 2021 28 in education sector, the government, in this case, the policymaker has an important role in overcoming various problems to protect the people’s rights to learn, especially for students. the present indonesian president, joko widodo, has set the deficit rate in the draft of 2021 state budget posture at 5.2% of gross domestic product (gdp). the widening deficit results in the additional spending on several budget items. this includes the budget allocations for education and health certainly larger than usual. the minister of finance said that there would be some increasing budget allocations for both education and health sectors in the upcoming fiscal year of 2021. thus, this study suggests the government to immediately respond various problems due to the multidimensional crises caused by the outbreak of covid-19 pandemic. there are some limitations in this study, ranging from the limited research time to the difficulties in collecting the data in this limited period. this research has important implications for the government to evaluate the policies for handling the crises happening in indonesia which is recently also hit by the global disasters. references aleksandrov, e., bourmistrov, a., & grossi, g. 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[how will covid-19 change the indonesian & asean economy?] retrieved on 12 august 2020. https://tirto.id/ https://almi.or.id/ https://www.cnbcindonesia.com/ https://news.detik.com/ https://travel.detik.com/ https://katadata.co.id/ https://bebas.kompas.id/ https://money.kompas.com/ https://nasional.kontan.co.id/ https://kumparan.com/ https://www.talenta.co/ https://tirto.id/ h.jauhari,e.dewata/journal of accounting and business education, 3 (2), march 2019 170 the determinant factors of performance of provincial governments in indonesia hadi jauhari 1 evada dewata 2 1management department, faculty of economic, politeknik negeri sriwijaya, indonesia 2accounting department, faculty of economic, politeknik negeri sriwijaya, indonesia email:ha.di@polsri.ac.id doi: http://dx.doi.org/10.26675/jabe.v3i2.5591 abstract: the focus of this research study includes the influence of local government actions, leverage, weaknesses in the internal control system, and audit findings (the audit board of the republic of indonesia) both partially and simultaneously on the performance of provincial governments in indonesia for 2015-2016 period. partially, the size of local government has a positive and significant influence on the performance of local governments. leverage, weaknesses in the internal control system and findings of the audit board of the republic of indonesia do not have a significant effect on the performance of local governments. simultaneously, the size of local government, leverage, weaknesses of the internal control system, and findings of the board of audit of the republic of indonesia have a significant influence on the performance of local governments with a contribution of the r square effect of 21.29%. keywords: local government size, weaknesses of internal control systems, performance of local governments introduction the performance of regional government administration related to the accountability of state financial management must be taken seriously. rather than paying attention merely to input and outcomeissues, the performance and process of organizing the country should be taken into consideration more intensively (saktiawati, 2014). the implementation of the government agency performance accountability system in accordance with the presidential regulation number 29 of 2014 concerning the performance accountability system of government agencies aims at encouraging the performance accountability of government agencies as one of the requirements for the good and reliable governance. however, practically speaking, so far the performance of government administration is still low, as stated by the secretary general of the home ministry hadi prabowobased on the three crucial problems occuring in regional governments in need of serious follow-up, including the low level of integrity of both regional government heads and employees, inadequate quality and financial management planning, and long and expensive licensing processes(http://news.metrotvnews.com/). under government regulation (pp) no. 6 of 2008 concerning guidelines for evaluating the regional government administration, it is stated that one of the evaluations of how regional governmentsare administered takes the form of evaluation of implementation of regional government journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v3i2.5591 http://news.metrotvnews.com/peristiwa/nbw3d9xb-integritas-pemerintah-daerah-mengkhawatirkan h.jauhari,e.dewata/journal of accounting and business education, 3 (2), march 2019 171 operations. in 2016, it was noted that from 34 provinces in indonesia, only 9 had very highperformance scores,with the remaining 24 provinces having “high”scores. how could this happen? this is an interesting topic to discuss. one of the perspectives to view this issue is the characteristics of local governments, such as the size of the local government, because the contents of the regional government implementation reportare highly dependent on the affairs they are in charge of and the characteristics of each local government (mustikarini and fitriasari,2012). quite a number of studies on this topic have revealed different results such as sumarjo (2010), kusumawardani (2012), sari (2016), artha, basuki and alamsyah (2016) where they found that the size of regional government had a positive effect on the performance of regency/municipality governments in indonesia. the greater the size of the regional government, the greater the resources they own to provide services to the community,thus it is expected that it will improve the performance of the regional governments. on the other hand, sudarsana (2013) and dewata, ilmiyyah& sarikadarwati (2017) stated that the size of the regional government did not affect the performance of regional governments. the performance of regional government administration is also influenced by the level of debt/leverage. local governments need sources of funds to finance and implement regional development work programs. one source of funds can be in the form of loan/debt capital from external parties. kusumawardani (2012) stated that leverage was the ratio between debt and capital. leverage is one of the key performance indicators in evaluating the performance of local governments. this is consistent with the results of research conducted by sumarjo (2010) who found that leverage influenced the performance of regional government. meanwhile, the results of kusumawardani (2012), artha, basuki, and alamsyah (2016) and dewata, ilmiyyah& sarikadarwati's (2017) research show that leverage does not have a significant effect on the performance of regional government administration. the weaknessesin the internal control system are of considerable interest in terms of its relationship with the performance of local government administration. these weaknesses include the financial reports which are prepared not in accordance with the standards yet, the inaccurate recording, and the less optimal internal supervisory unit. under pp no. 60 of 2008 concerning government internal control system, it shall consist of five elements, namely the control environment, risk assessment, control activities, information and communication, and internal control monitoring. the significant weakness in internal control systemmight lead to a waste potentially violating the laws and regulations. the findings of non-compliance with statutory regulations consist of findings of state/regional losses or state/regional losses that occur in state/regional-owned companies, groups finding potential state/regional losses or state/regional losses that occur in state/regional-owned companies, groups findings of a lack of state/regional revenues or state/regional-owned companies, administrative findings and criminal indications (republic of indonesia supreme audit agency, 2010).a good compliance (with laws) is part of good management, and it will eventually produce a good performance (vago, 2008). literature review and hypotheses performance of local government administration in government regulation number 6 of 2008, it is stated that the performance of regional government administration is the achievement of regional government affairs management as measured using its inputs, processes, outputs, results, benefits, and/or impacts. measuring the performance of local government is a systematic process of collecting and analyzing data on the regional government administration using a performance measurement system. in accordance with law number 23 of 2014, regional government management is the administration of government affairs by regional governments and regional legislatures according to the principle of autonomy and co-administration with the principle of autonomy to the greatest possible extent in the system and principles of the unitary state of the republic of indonesia as referred to in the 1945 constitution of the republic of indonesia. h.jauhari,e.dewata/journal of accounting and business education, 3 (2), march 2019 172 size of regional government the size of a regional government can be seen from the total assets owned by the regional government. local governments have the authority to manage regional assets to be used for the public interest. local governments with greater assets will certainly receive greater pressure from the public to improve its performance and are obliged to disclose its financial reports transparently to reduce information asymmetry. leverage leverage shows the amount of debt used by external parties compared to the regional government’s own capital. if the amount of debt is greater than the equity, this means that the main source of funding for the entity comes from external parties. the debt or leverage ratio is very important for creditors to measure the ability of local governments to pay their debts. the leverage ratio also shows how much the local government is funded/burdened by debt, if the leverage ratio is high it means the local government has poor performance because its largest funding source is not from its own capital, rather it is from external parties. weakness of the internal control system the government internal control system (spip) according to government regulation number 60 of 2008 is an integral process in actions and activities carried out continuously by the officers and all employees to provide adequate confidence in achieving organizational goals through effective and efficient activities, reliable financial reporting, safeguarding state assets and compliance with laws and regulations. one of the criteria for the bpk in giving opinions is the number of findings on spip weaknesses. the findings of spip weaknesses are classifiedinto three categories, namely: 1. weaknesses in accounting and reporting control system, namely weaknesses in control system related to financial accounting and reporting activities. 2. weaknesses of the control system for the implementation of the revenue and expenditure budget, namely control weaknesses associated with the collection and deposit of state/regional/state-owned companies' revenues and the implementation of programs/activities in the entities being examined. 3. weaknesses of internal control structure, namely weaknesses associated with the presence/absence of internal control structure or the effectiveness of internal control structure. these findings influence the number of findings on spip weakness cases which have an effect on the level of effectiveness of the spip, which in turn is used as the basis for determining the performance of local government operations. findings of the supreme audit agency (bpk) examination the audit findings of bpk as a result of an audit of the local government financial statements contain non-compliance with the statutory provisions. non-compliance with statutory provisions can result in losses to the region, potential regional financial losses, lack of r egional revenues, waste of regional finance or inequality, ineffectiveness, and inefficiency. the increasing number of findings of violations committed by the regional government shows the inefficiency and declining performance of local government. effect of the size of local government on the performance of local government operations the size of a large local government will provide ease of operational implementation and will be required to have better performance than the regional governments that have a small size. this is stated by the results of the research of sumarjo (2010) and budianto (2012) which stated that the greater the size of the local government, the better the financial performance of the local government. local governments that have large sizes will also have great pressure to disclose financial performance. local governments tend to disclose good performance reports only in an attempt to increase its performance score. as sumarjo (2010), kusumawardani (2012), sari (2016) revealed, the size of local government influences the financial performance of local governments. h.jauhari,e.dewata/journal of accounting and business education, 3 (2), march 2019 173 hypothesis 1: the size of local government has a significant effect on the performance of local government operations effect of leverage on the performance of local government operations leverage relates to the use of assets or funds where the use of these assets requires local governments to cover fixed costs or fixed expenses. research conducted by weill (2003) revealed that leverage is a proportion that describes the amount of government debt from external parties compared to own capital. this indicates if the amount of debt is greater than the capital itself, the main source of funding for the entity comes from external parties (perwitasari, 2009). the level of leverage indicates how much the local government is burdened with debt. if this ratio is high, then the local government may have excess debt and a way to reduce debt must be sought (sesotyaningtyas, 2012). perwitasari (2010), revealed that local governments that have high leverage have poor performance because the main funding source comes from external parties. hypothesis 2: leverage has a significant effect on the performance of local government operations influence of weaknesses of the internal control system on the performance of local government operations the effectiveness of the internal control system is indicated by the number of findings in the supreme audit agency examination report (yamin and sutaryo, 2015). weaknesses of the internal control system can be classified into three categories, namely the findings of weaknesses in accounting and reporting control system, findings of weaknesses in internal control structure and findings of weaknesses in the control system of the implementation of the revenue and expenditure budget. an effective internal control system will affect performance (sarita, 2012). the findings of weaknesses in the internal control system make local governments more careful in implementing governance. weakness of internal control system cases generally occur because responsible officers are not careful in planning and carrying out tasks. the implementation of budget evaluations and feedback is expected to be an effective internal control system assessment, so that the more effective the internal control system is, the more performance will be increased (ramandei, 2009). the weakness of internal control system of the local government has a significant negative effect on the performance of local government administration as revealed by vago (2008), saktiawati (2014) who stated that effective internal control system can produce higher performance. hypothesis 3: weaknesses in the internal control system have a significant effect on the performance of local government operations influence of the supreme audit agency’s findings on the local government performance the findings in the local government financial report reveal that non-compliance with laws and regulations has a direct and material effect on the presentation of financial statements. the findings illustrate the deviations that occur during the process of implementing the program/activity, the higher the number of meaningful findings in the implementation of the regional budget indicates there are resources that are used for other purposes besides the goals/targets that have been set (qowi and prabowo, 2017). in other words, the number of bpk audit findings will illustrate how low the performance of local governments is. the greater the number of bpk audit findings, the lower the performance of local governments. a good compliance practice will always support the efficient and effective function of an organization. so that good compliance is part of good management that will produce good performance (vago, 2008). the more bpk audit findings will show the financial management of the local government is considered low, and will ultimately affect the performance of the local government. (mustikarini and debby, 2008; qowi and prabowo, 2017). h.jauhari,e.dewata/journal of accounting and business education, 3 (2), march 2019 174 hypothesis 4: bpk audit findings have a significant effect on the performance of local government operations. hypothesis 5: simultaneously,local government measures, leverage, weaknesses in the internal control system and bpk audit findings have a significant effect on the performance of local government operations. methods the population of this study was 34 indonesian provinces for the period 2015-2016. the sampling criteria of the study were purposive sampling with the provisions of the selected provinces having all the complete data including balance sheet to obtain total assets and total debt, and required local government financial reports for 2015-2016 to obtain the number of audit findings (weakness of internal control systemand bpk audit findings) from the 30 selected provinces which were the unit of analysis of this study. this research is an associative quantitative study using secondary data which consists of the results of the determination of ranking and status of local government implementation performance from 2015 to 2016. reports on examination of lcal government financial statements for the 2015-2016 budget year are obtained from the information and communication center of the supreme audit agency and from the summary of examinations in the first and second semesters of 2015-2016 on the website of the supreme audit ; http://www.bpk.go.id. the performance for local government implementation, measurement using scores based on decree of ministry of home affairs no. 120-251 of 2014 concerning determination of ranking and status of local government implementation performance in 2012. there are 4 performance statuses, namely very high (score ≥3.0), high (score ≥ 2.0), moderate (score ≥ 1, 0), and low (score ≥ 0.0).size of local governmentis measured based on the total assets owned by the local government (kusumawardani,2012; dewata, ilmiyyah & sarikadarwati,2017), the leverage is measured based on proportions that describe the amount of debt from external parties compared to own capital. researchers in this study use debt to equity ratio to measure leverage. the higher the leverage value, the worse the performance. while the lower the leverage, the better the performance.measurement of weakness of internal control systemis based on the number of cases of internal control weakness related to accounting records and financial reporting, collection and depositing of state/regional revenues and the implementation of activity programs, the presence/absence of internal control system in the entity being examined.the measurement of the supreme audit agency’s audit findings is based on the number of findings of violations of the regulatory provisions that result in regional losses in the report on the results of the examination of the financial statements of the local government. results descriptive statistics of this research variable are shown in the following table 1: table 1. descriptive statistics of research variables ekkpd size lev spip kp mean 0.233333 29.80100 0.051167 7.316667 48.90000 median 0.000000 29.73000 0.030000 6.000000 43.00000 maximum 1.000000 33.72000 0.220000 22.00000 144.0000 minimum 0.000000 28.08000 0.000000 1.000000 4.000000 jarque-bera 16.32074 60.09239 36.32162 10.48468 5.320809 probability 0.000286 0.000000 0.000000 0.005288 0.069920 observations 60 60 60 60 60 source: processed data from eviews 6 http://www.bpk.go.id/ h.jauhari,e.dewata/journal of accounting and business education, 3 (2), march 2019 175 from table 1 above, it can be seen that the performance of the implementation of local government is at a high and very high score, there are around 23.33% or 7 provinces got the very high predicate, while the remaining provinces, approximately 76.67% or 23 provinces, have a high predicate. furthermore, the supreme audit agency’s findings found the most findings in north sumatra province as many as 144 cases in 2016, while the fewest findings were obtained in yogyakarta province amounted to 4 cases in 2016. the highest number of weakness of internal control systemwas owned by yogyakarta province as many as 22 cases in 2015 and the lowest, as many as 1 case, is in bangka belitung islands province. the largest size of local government is owned by jakarta province while the smallest is in west sulawesi province. the highest debt level is owned by the province of south sumatra in 2015. before testing the hypothesis, a classic assumption was tested and all tests did not show violations of classical assumptions. the next best model determination on panel data is done using chow test (fixed vs pool effect) and hausman test (random vs fixed). table 2. chow test results effect test statisticstest f p value conclusion cross-section f 3.522574 0.0009 fixed effect model accepted based on table 2, it can be concluded that overall the data is more appropriate to use fixed effect model, which means there is no difference in effect between the time in the panel data. hausman test is then conducted to find out whether the model from panel data follows the fixed effect model or random effect model. table 3. hausman test results effect test statisticstest f p value conclusion cross-section random 6.660386 0.1550 random effect model accepted based on table 3, it can be concluded that the data is more appropriate to use random effect models when compared to the fixed effect model. table 4 shows the estimation results for the random effect model. table 4. estimated random effect model variable coefficient std. error t-statistic prob. c -6.300421 1.682930 -3.743720 0.0004 size 0.222867 0.056259 3.961466 0.0002 leverage -1.587365 1.020092 -1.556100 0.1254 spip 0.002361 0.010309 0.229012 0.8197 kp -0.000899 0.001448 -0.620596 0.5374 r-squared 0.266346 f-statistic 4.991813 adjusted r-squared 0.212990 prob(f-statistic) 0.001665 based on the results of table 4, the results obtained are that in the estimation of the random effect model equation, only the local government size variables that have a significant positive effect on the performance of local government operations. while simultaneously, it is known that the p-value for fstatistics is 0.001665 smaller than the level of significance <0.05 then h0 is rejected (model is missed certified), meaning simultaneously, the size of the local government, leverage, weaknesses of the internal control system, and the supreme audit agency’s findings have a significant effect on the performance of local government operations in indonesia. the coefficient of determination is indicated by the adjusted r square value of 0.2129, which means that the variability of the dependent variable that can be explained by the independent variable is 21.29% and the remaining 78.71% is explained by other variables not included in this research model. h.jauhari,e.dewata/journal of accounting and business education, 3 (2), march 2019 176 discussion relationship of stress exposure in class with work enthusiasm and emotional exhaustion the data analysis results show that there is negative relationship between stress exposure in class and work enthusiasm (b = -0.270; p< .001; see table 1), which means that stress the teachers experience in class has teachers’ work enthusiasm lowered. in addition, the data analysis also show positive relationship between stress exposure in class and emotional exhaustion (b = 0.112; p< 0.001), which means that stress exposure the teachers experience in class raises their emotional exhaustion.the findings of this research also show that stress in class is frequently caused by students’ behavioral and disciplinary problems during class, students’ low learning motivation in class and poor relationship between teacher and students. these have teachers discouraged from going to and teaching in such class in comparison to other classes. besides lowering work enthusiasm, this also raises teachers’ emotional exhaustion. the results of this research support previous findings that stress in class is dominantly caused by poor (interaction) relationship between teacher and students because of students’ disciplinary problem and students’ motivation during class, which eventually have teacher’s work enthusiasm lowered and emotional exhaustion raised (gastaldi et al., 2014; kyriacou, 2001; fernet et al., 2012; skaalvik & skaalvik, 2010; pyhältö et al., 2011). teacher’s lowered work enthusiasm and raised emotional exhaustion are the consequence of poor teacher-students relationship and related to transitional period from student to worker as teacher (beginning teacher). these also conform to the finding of previous researches that transitional period beginning teachers experience is frequently related to their high extent of stress (dicke et al., 2015; smith & ingersoll, 2004). therefore, a teacher, particularly beginning teacher, needs to maintain good relationship with students by, for example, understanding students’ character in order to communicate and give them disciplinary and motivational guidance and to strengthen their teacher-students relationship. when this occurs, there will be no more students’ disciplinary infringements and low learning motivation in class, thus the teacher will be teaching more enthusiastically and eventually have their emotional exhaustion lowered. relationship of stress exposure outside class with work enthusiasm and emotional exhaustion the data analysis results show negative relationship between stress exposure outside class and work enthusiasm (b = -0.360; p< .001; see table 1), which means that when a teacher is under stress outside class, his/her work enthusiasm will decline. in addition, the data analysis results also show positive effect of stress exposure outside class on emotional exhaustion (b = 0.136; p< 0.001; see table 1). this shows that stress outside class experienced by teacher will raise his/her emotional exhaustion.stress exposure outside class is frequently caused by poor relationship with colleagues, particularly with seniors. besides, working atmosphere also contributes to a teacher’s stress, that when in a non-conducive environment like no support from colleagues, a teacher will no longer be comfortable with working (come to school) and will even be reluctant (unwilling) to work, which is one indicator of a teacher’s declining work enthusiasm. the same also occurs in regard to emotional exhaustion. when a teacher has poor relationship with any colleague and uncomfortable working climate (atmosphere) (no support from colleagues), he/she will have his/her patience declining (maslach, schaufeli, and leiter 2001), feel despair, depressed, irritable, frustrated and sad (wright and cropanzano 1998), which are signs that his/her emotional exhaustion increases. the research findings reconfirm previous researches that the reason of stress experienced by teachers comes from outside class, commonly related to relationship with colleagues and working climate, which eventually leads to their declining work enthusiasm and increasing emotional exhaustion (kyriacou, 2001; pyhältö et al., 2011; pomaki et al., 2010; skaalvik & skaalvik, 2011; van droogenbroeck et al., 2014).poor relationship with colleagues is also related to the adaptation process as a teacher from a student. this confirms previous finding that transitional period from student to worker h.jauhari,e.dewata/journal of accounting and business education, 3 (2), march 2019 177 (beginning teacher) is frequently associated with high extent of stress (dicke et al., 2015; smith & ingersoll, 2004). therefore, a beginning teacher should adapt to work environment, particularly in maintaining good relationship with colleagues in order to create a positive work environment, which will raise his/her work enthusiasm and emotional exhaustion. conclusion the results of this research show that stress exposure in class and outside class significantly influences teachers’ psychological well-being from the perspective of work enthusiasm and emotional exhaustion. moreover, stress exposure in class and outside class negatively influences teacher’s work enthusiasm but, on the other hand, positively influences emotional exhaustion.the results of this research prove that beginning teachers are in a critical period for having stress since they are in a transitional phase and, therefore, need appropriate policy related to assignment (of duties), support and positive working climate as preventive measures for them to work smoothly and as realization of their psychological wellbeing.this research is conducted quantitatively and has not revealed in detail the stress the beginning teachers experience, both in and outside class. this allows different stressors between one school and another. therefore, the researcher suggests future researchers to reexamine the 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(1998). emotional exhaustion as a predictor of job performance and voluntary turnover. journal of applied psychology, 83(3), 486–493. https://doi.org/10.1037/00219010.83.3.486 relationship of stress exposure in class with work enthusiasm and emotional exhaustion relationship of stress exposure outside class with work enthusiasm and emotional exhaustion journal of accounting and business education (jabe) departement of accounting faculty of economics universitas negeri malang previously known as:jurnal pendidikan akuntansi (2012-2015) currently known as:journal of accounting and business education (2016 – current) journal of accounting and business education is a fully peer-reviewed and open access journal published twice a year (march and september). journal of accounting and business education has an objective to help researchers publish their work for a wider audience and discover new connections. journal of accounting and business education considers original research articles and review articles in in any research areas of accounting and business education. editor-in-chief nurika restuningdiah, [scopus id: 57188957915] universitas negeri malang, indonesia editorial boards tariq tawfeeq yousif alabdullah, [scopus id: 56275199100] university of basrah, iraq mohd rizal palil, [scopus id: 51663834200] universiti kebangsaan malaysia, malaysia agung yulianto, [shinta id: 5984223] universitas swadaya gunung jati, indonesia dyah nirmala arum janie, [scopus id: 57194281680] universitas semarang, indonesia cipto wardoyo, [scopus id: 57194279103] universitas negeri malang, indonesia amelia amelia, [scopus id: 56996051000] universitas pelita harapan, indonesia nujmatul laily, [sinta id: 52354] universitas negeri malang, indonesia arta moro sundjaja, [scopus id: 55858212100] bina nusantara university, indonesia dudung ma'ruf nuris, [scopus id: 57209453051] universitas negeri malang, indonesia sulikah sulikah, [sinta id: 6026817] universitas negeri malang, indonesia primasa 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id: 57210888228] universitas stikubank, indonesia agus zainul arifin, [scopus id: 57188962176] universitas tarumanegara jakarta ronald ronald, [scopus id: 57203370917] universitas pelita harapan, indonesia a.a. gde satia utama, (scopus id: 57190400910), universitas airlangga, indonesia negina kencono putri, [scopus id: 55806508000] universitas jenderal soedirman, indonesia faidul adzim musa, [scopus id: 57203746748] universitas muhammadiyah makassar, indonesia nurjannah rahayu kistanti, [scopus id: 57215215364] universitas negeri semarang, indonesia masripah masripah, [scopus id: 57202385712] upn veteran jakarta, indonesia dwi ermayanti susilo, [scopus id: 57205064630] stie pgri dewantara, indonesia victor pattiasina, [scopus id: 57207245058] univeristas yapis papua, indonesia rony wardhana, [scopus id: 57209295642] universitas narotama, indonesia sri utami ady, [scopus id: 57204906656] universitas dr. soetomo, indonesia eka handriani, [scopus id: 57190022037] universitas darul ulum 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javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/340479') javascript:openrtwindow('http://journal2.um.ac.id/index.php/jabe/about/editorialteambio/4266') table of contents 1. turnover intention in public accounting firms in east java i putu hendra setiawan, nurkholis, bambang hariadi ...................................................... 123-140 2. the factors influencing perceived ease of use of e-learning by accounting lecturer nujmatul laily, fenty shintya riadani .............................................................................. 141-150 3. analysis on earnings persistence, independent commissioner and herding behavior on earnings quality ike arisanti ......................................................................................................................... 151-161 4. stress exposure and psychological well-being: study on beginning teacher mohamad arief rafsanjani, etika dhewi rahmawati........................................................ 162-169 5. the determinant factors of performance of provincial governments in indonesia hadi jauhari , evada dewata .............................................................................................. 170-179 march 2019.pdf (p.1) fm volume 3 issue 2 (ini covernya masih 2 sisi).docx.pdf (p.2-5) v. anojan/ journal of accounting and business education, 6 (2), march 2022 22 factors affecting internal audit reporting on public sector in sri lanka vickneswaran anojan department of accounting, faculty of management studies and commerce, university of jaffna, sri lanka email: v.anoabt@gmail.com doi: http://dx.doi.org/10.26675/jabe.v6i2.21265 abstract: the main purpose of this study is to identify significant factors affecting the effectiveness of internal audit reporting in public sector in the northern province, sri lanka. this study used the primary data collected from the heads of departments, divisions, and internal auditors in public sector in the northern province of sri lanka through the developed questionnaire. the regression analysis confirmed that the tested factors significantly affected the effectiveness of internal audit reporting, especially accountability and transparency, while internal auditor independence more significantly affected the effectiveness of internal audit reporting. all tested factors were significantly correlated with the effectiveness of internal audit reporting, except materiality. this study was based on the data collected from public sector in the northern province of sri lanka, therefore the findings of this study could be generalized to the other public sector organizations in the other provinces of sri lanka. according to the statistical results, it is suggested that the more the internal auditor independence of as well as internal auditor accountability and transparency, the more the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. this is the first study evaluating significant factors affecting the effectiveness of internal audit reporting in public sector in sri lanka. article history received: 31 may 2021 revised: 19 november 2021 accepted: 1 january 2022 keywords central government, factors, internal audit reporting, northern province, provincial government introduction internal audit is an independent and essential activity in risk assessment and implementation of internal control system of an organization. internal audit focuses on three key functions: ensuring the effectiveness and efficiency of operations, increasing the reliability of financial information and increasing & confirming the legal compliance of an organization. internal audit covers not only financial but also non-financial activities of an organization. due to the asian financial crises, there were significant changes in internal audit profession during 1997 – 1998 (amanuddin and divyaa, 2014). nowadays, internal audit functions are considered vital in all sectors, due to the latest global economic meltdown and increasing fraud cases. therefore, every organization gives more considerations and priorities to have effective and efficient internal audit division. it vitally contributes in the risk management and effective day to day operations of an organization. most organizations have the audit committee for better performance and to figure out the possible solutions to the weaknesses of an organization. the institute of internal auditors (iia) (2020) defines internal auditing as a value adding activity in a firm to increase the effectiveness and efficiencies of daily citation: anojan, v. (2022). factors affecting internal audit reporting on public sector in sri lanka. journal of accounting and business education, 6(2),22-33. journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v6i2.21265 v. anojan/ journal of accounting and business education, 6 (2), march 2022 23 operation, improve the reliability of financial reporting, and ensure the legal compliance of a firm. every organization has many objectives to achieve with some conditions. therefore, internal audit functions help an organization accomplish its objectives by bringing a systematic and discipline approach to evaluate and improve the effectiveness of risk management, control, and governance processes. sri lanka has faced a continuous budget deficitup to 6.8 % in its gdp in 2019 (central bank report of sri lanka, 2019). many public sector organizations have also faced difficulties on public sector financial management, so that they tried to find appropriate ways to develop the effective and efficient public sector financial management. most central government public sector organizations have independent internal audit division under the chief internal auditor as well aseach provincial council headed by the chief internal auditor to reach three primary objectives: ensuring the effectiveness and efficiency operations, ensuring and increasing the reliability of financial information, as well as ensuring and increasing the legal compliance of an organization. general treasury has the responsibility to all financial managements of a country with its financial management system. thus, general treasury gives more consideration to the internal audit on public sector. however, we can see many weaknesses of internal audit practices through the committee on public accounts and public enterprises reports. thus, there are mandatory reform and needs for effective and efficient internal audit system and its practices in public sector in sri lanka. previous studies found some factors significantly affected the effective operations of internal audit division. management support, staff experience, adequate resource, and independence of the internal audit division significantly affected the effectiveness of internal audit (alzeban, 2014). the independence of internal auditor significantly affected the performance of internal audit (drogalas, karagiorgos and arampatniz, 2015). internal audit independence, internal audit competencies, management support, and quality of internal audit significantly affected the internal audit effectiveness in vietnam (tran, 2018). most studies conducted in sri lanka (dissanayake, 2015; hasini and sithumini, 2019; gamage and keving, 2018; and kumari and weerasooriya, 2019) were related to internal audit function, internal control system with firm performance. the researcher believes that this study will fulfil a considerable level of the existing research gap related to the effectiveness of internal audit in public sector in sri lanka. research questions many researchers have assessed and found somefactors significantly affecting the effectiveness of internal audit (alzeban, 2014; drogalas, karagiorgos and arampatniz, 2015; tran, 2018; dessalegn and aderajew, 2007; donlaya, 2012; zulkifli, alagan and mohd, 2014; amanuddin and divyaa; 2014, hella and mohamed; 2016, alhassan, erasmus and fred; 2018, ruth and tabitha; 2018 and kanbiro, 2019). based on the depth of literature reviews and experiences, the following research questions were formulated in this study. rq1: do some identified factors significantly affect the effectiveness of internal audit reporting in public sector in the northern province of sri lanka? rq2: is there any relationship between the identified factors in this study and the effectiveness of internal audit reporting in public sector in the northern province of sri lanka? the main objective of this study was to figure out factors significantly affecting the effectiveness of internal audit reporting in public sector int the northern province of sri lanka. meanwhile, the subobjective of this study was to identify the significant relationship between the identified factors and the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. literature review and hypotheses agency theory barry (2015) stated that agency theory is a contract between owners of an organization and top management of an organization. generally, top management acts as an agent to perform operations of an organization on the behalf of the owners. the owners delegate authorities to the top management to act on v. anojan/ journal of accounting and business education, 6 (2), march 2022 24 their behalf. in this situation, the granted authorities can be misused by the top management of an organization. thus, audit committee, internal and external auditors play a significant role to ensure the reliability of financial information, effective and efficient operations & legal compliance of an organization. internal auditors act as agents reporting their works which are then used by others (peursem and pumphrey, 2005). if there is inefficient board and audit committee, the agency problems may arise. the senior management may significantly affect the functions and duties of internal audit division. in this crucial situation, a question may be raised related to the effectiveness of internal audit reporting and service quality of internal audit division. internal auditors are appointed by the top management of an organization and then internal auditors act as the agents. board and audit committee believed that internal auditors honestly evaluate and report the performance of management and their works. internal auditor may expect some personal benefits from the management, such as financial rewards, personal relationships with management, future internal auditor positions as, and salaries. thus, the effectiveness of internal audit reporting and service quality of internal audit division is questionable. the board and audit committee expects that internal auditors must perform their role with adequate professional qualifications, competencies and experiences. the internal audit reports are greatly beneficial for the effective and efficient risk management of an organization. internal auditors have the primary responsibility to evaluate internal control system on each activity of an organization and report their evaluations to the top management of an organization. thus, internal auditors should collect sufficient and appropriate proofs to increase the quality of their reports. internal auditors also have to materially consider the effective and efficient communication with the users of internal audit reports. internal auditors are the employees of an organization evaluating the operations of an organization as well as the resource allocation & use. the support from top, middle, and bottom level staff members are expected for more effective and efficient functions of the internal audit division of an organization. accountability & transparency today, the needs for accountability and transparency have continuously increased in both public and private sector. accountability is the obligation of employees to employers based on their duties and responsibilities. transparency is one key attribute of good governance and faithful work. it is one code of ethics to the professional auditors. the accountability and transparency levels should be higher in public sector. public sector organizations use public finance which fund is mostly collected from the general public of a country. thus, public sector organizations are accountable to the general public of a country and their work should be transparent to the general public of a country. internal auditor has the accountability to the top management based on the responsibilities and duties assigned by the top management of an organization. the internal auditor has certain transparency level to maintain confidentiality. internal auditor competencies staff competencies have vital roles related to the performance of an organization. according to sri lanka chartered accountants (2016), professional competence is one code of ethics for professional accountants. sri lanka chartered accountants stated that competent professional service requires a sound judgment exercise in applying the professional knowledge and skill in performing such service. internal auditors also provide professional and high efficiency service to the organization to maintain their professional competencies at the acceptable level. materiality people give more consideration on materiality since having vital role in the audit process and reporting. sri lanka auditing standard (slaus) 320 clearly stated that, assessment is material for a professional judgment. the standard highly recommended that, the auditor should establish an acceptable materiality level in designing the audit plan to quantitatively detect the material misstatements. however, v. anojan/ journal of accounting and business education, 6 (2), march 2022 25 both quantity and quality of misstatements need to be considered. stakeholders and top management of an organization focus on materiality information in which internal auditor has the responsibility to report the materiality information. audit evidence auditors should arrive to their professional and independent opinions based on the collected audit evidence in the audit process. auditors have the major responsibility to draw and issue reasonable opinions depending on sufficient and appropriate audit evidence (slaus 500). audit evidence included legal references for auditors’ conclusions. there are many techniques to obtain audit evidence, which can be different from one audit to the others audit and one audit firm to the other audit firms. internal auditor independence tran (2018), independence should be given to the employees for their innovative and independence work. audit is one of independent services in the world. they have the responsibility to provide independent opinions on the assigned work. independence will increase the quality of audit work and report further, internal auditor should perform their work independently for the effective and efficient reporting. furthermore, top management has the responsibility to adequately ensure the independence of internal auditor. true and fair view tran (2018), auditors have the major responsibility to give their professional opinions through their audit reports. such audit reports should have true and fair view to become valid reports in the decision making. internal auditors also have the responsibility to report to the top management at regular intervals, their reports are more valuable in the risk management and corporate level decision making related to the management. thus, internal auditors should prepare and present their reports as true and fair view. performance audit according to tran (2018), audit has a number of evolutions in the world. nowadays, performance audit is mostly expected by the stakeholders of an organization. performance audit provides more benefits than traditional audits and gives more priority to the performance than the physical documents. performance audit covers three major areas, such as effectiveness, efficiency, and economy. today, internal auditor should also focus on performance audit to fulfil the requirements and expectations of the stakeholders of an organization. resources & facilities tran (2018) also stated that adequate resources and facilities should be allocated for the effective function of a division and also given the resources and facilities to be utilized at optimum level for the higher-level performance of an organization. internal audit division is one division in an organization. internal audit division should be facilitated with adequate resources and utilized the resources at optimum level for higher level performance of internal audit division. empirical findings according to the depth of literature reviews, different factors were tested to identify the effect on the effectiveness of internal audit in several studies. the researcher considered that all existing tested factors and assessed factors affected the effectiveness of internal audit in this study. those factors included accountability & transparency, internal auditor competencies, materiality, audit evidence, internal auditor independence, true and fair view, performance audit, resources & facilities on the effectiveness of internal audit report in this study. there are many studies on the assessment of internal audit effectiveness. however, those studies were still few conducted in sri lanka. v. anojan/ journal of accounting and business education, 6 (2), march 2022 26 the researcher examined the factors affecting the effectiveness of internal audit. the statistical analysis of this study revealed that the quality of internal audit and the support of management significantly affected the effectiveness of internal audit (dessalegn and aderajew, 2007). the researcher examined the perception of respondents related to the factors possibly affecting the effectiveness of internal audit. the researcher considered the internal auditor competencies, internal audit division size, relationship between internal and external auditors, management support and internal auditor independence in this study. the results confirmed that the management support was the most significant factor in determining the effectiveness of internal audit. the other significant factors also determine the effectiveness of internal audit (alhassan, erasmus and fred, 2018). the researcher found that, internal auditor independence, objectivity, management support, internal audit function, and organization sector significantly affected the effectiveness of internal audit (hella and mohamed, 2016). the researcher stated that internal audit should improve the performance of public sector. the researcher then evaluated the effect of internal audit quality on the performance of public sector in ethiopia. the research data were collected through questionnaire. regression analysis revealed that internal audit independence, internal auditor competencies, management support significantly and positively affected the internal audit quality exclude from the tested eight factors in this study (kanbiro, 2019). h1: the identified factors significantly affect the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h1a: accountability & transparency significantly affect the effectiveness of internal audit reporting in public sector, in the northern province of sri lanka. h1b: of internal auditor competencies significantly affect the effectiveness of internal audit reporting in public sector, in the northern province of sri lanka. h1c: materiality significantly affects the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h1d: audit evidence significantly affects the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h1e: internal auditor independence significantly affects the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h1f: true and fair view significantly affect the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h1g: performance audit significantly affects the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h1h: the use of resources & facilities significantly affects the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. the researcher assessed the factors affecting the efficiency in internal audit performance and the relationships between efficiency in internal audit performance and operational outcomes in the selected companies listed on thai stock exchange. the results confirmed that operation completeness and information system, understanding and acceptance within the organization, knowledge, skill, and human relations as well as the relationship between internal audit units and the others affected the internal audit efficiency (donlaya, 2012). the researcher revealed that internal auditors faced a serious problem due to the low level of internal auditor independence and competencies. the researcher also stated that the relationship between internal auditor and external auditor was also an issue related to the effective and efficient performance of internal auditor (amanuddin and divyaa, 2014). the researcher noted that, internal audit functions were greatly important and essential for controlling, monitoring, and assessing the public sector financial management. descriptive, correlation and regression analysis were performed in this study. the statistical analysis of the study confirmed that there was a positive and significant relationship between competency of internal auditor, independence of v. anojan/ journal of accounting and business education, 6 (2), march 2022 27 internal auditor, objectivity, and management support and internal audit effectiveness (zulkifli, alagan, and mohd, 2014). the researcher revealed that working environment, internal auditor independence, internal auditor competencies significantly affected the performance of internal audit function. the researcher recommended that internal auditor should be complained with professional ethics and standards for the better internal auditor performance and further should be trained with regular intervals (ruth and tabitha, 2018). the researcher assessed the effect of internal audit function on the financial performance of commercial banks in sri lanka. the researcher used five-point likert scale questionnaire to collect the research data. the statistical results of the study revealed that, internal audit standards, professional competencies, and internal controls had positive relationships with financial performance of commercial banks in sri lanka. furthermore, the internal auditor independence had the relationship with financial performance, yet not at a significant level (hasini and sithumini, 2019). the researcher examined the relationships between internal audits’ characteristics and organization performance an in sri lanka (dissanayake, 2015). the researcher evaluated the effect of internal control components on the effectiveness of internal control system of peoples bank in sri lanka. the descriptive and inferential analysis were performed in this study. the researcher found that, internal control components had positive relationship with the effectiveness of internal control system (gamage and keving, 2018). h2: there is a significant relationship between the identified factors and the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h2a: there is a significant relationship between accountability & transparency and the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h2b: there is a significant relationship between the internal auditor competencies and the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h2c: there is a significant relationship between materiality and the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h2d: there is a significant relationship between audit evidence and the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h2e: there is a significant relationship between internal auditor independence and the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h2f: there is a significant relationship between true and fair view and the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h2g: there is a significant relationship between performance audit and the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. h2h: there is a significant relationship between the use of resources & facilities and the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. methods samples and data sources the researcher selected the district secretariat offices from the central government and the northern provincial council main administrative office. there were five district secretariat offices (jaffna, vavuniya, killinochchi, mannar, and mulaitivu) and one main administrative office of northern provincial council. the researcher collected the data from all district secretariat offices instead of mannar district secretariat office and main administrative office of the northern provincial council. the researcher had developed five-point likert scale questionnaire. a number of likert scale questions had been included in each research variable where, 1 represented strongly disagree and 5 represented strongly agree in the questionnaire. the research data were collected through the developed questionnaire to the heads of departments, divisions, chief internal auditors and internal auditors of central and provincial government in the northern province of sri lanka. v. anojan/ journal of accounting and business education, 6 (2), march 2022 28 conceptual framework and data analysis figure 1 shows the conceptual framework clearly reveals the relationship between the identified factors and the effectiveness of internal audit reporting. descriptive and inferential (regression and correlation) analyses were performed in this study to answer the research questions and test the hypotheses with the assistance of spss latest version. results and discussion research respondents the research data collected from heads of departments, divisions, chief internal auditors and internal auditors of central and provincial government in the northern province of sri lanka through the developed questionnaire. the following table shows the data of research respondents. based on table 1, it can be seen that more than 50% of respondents were female and more than 50% of respondents aged between 31 – 50 years old. in addition, more than 65% of respondents had more than 11 years of working experience. data reliability and validity table 2. reliability statistics cronbach's alpha total items .918 32 based on table 2. above, it can be seen that gronbach’s alpha was more than 0.7 (70%) for each research variable. thus, it can be stated that the data reliability was very high. accountability & internal auditor competencies materiality audit evidence internal auditor independence true and fair view performance audit use of resources & facilities effectiveness of internal audit figure 1. conceptual framework v. anojan/ journal of accounting and business education, 6 (2), march 2022 29 table 1. data of research respondents element category total respondents position head of department/ division 21 chief internal auditor/ internal auditor/ internal audit staff 58 working station central government 32 provincial government 47 sex male 37 female 42 age below 30 years old 14 31 40 years old 22 41 50 years old 26 51 60 years old 17 working experience 0 10 years old 27 11 20 years 34 above 20 years 18 table 3. factor analysis kaiser-meyer-olkin sampling adequacy measurement 0.789 bartlett's sphericity test approx. chi-square 1368.160 df 496 sig. .000 according to table 3. above, the value of kaiser-meyer-olkin (kmo) clearly indicated (0.789) that the research data were more appropriate for the structure detection. it meant that the research data (78.9%) were valid. the bartlett's sphericity test had high significance value (0.000). thus, it can be stated that the data validity was classified into high category. descriptive analysis table 4. descriptive statistics minimum maximum mean std. deviation internal audit reporting 2.50 5.00 4.0617 .52459 accountability & transparency 2.80 5.00 4.0177 .54556 internal auditor independence 2.00 5.00 3.6614 .73165 internal auditor competencies 2.75 5.00 3.9019 .61030 materiality 2.00 5.00 3.5000 .66986 audit evidence 2.00 5.00 3.9114 .64926 true and fair view 2.00 5.00 4.0000 .75107 performance audit 2.75 5.00 4.0918 .58449 resources & facilities 2.00 5.00 3.8544 .71231 according to table 4, it can be seen that internal audit reporting, accountability & transparency, true and fair view, and performance audit of internal audit division are slightly higher than the agree level. however, internal auditor independence, internal auditor competencies, materiality, audit evidence, and v. anojan/ journal of accounting and business education, 6 (2), march 2022 30 resources & facilities allocated and used by the internal audit division are at the moderate level in public sector in the northern province of sri lanka. the performance audit shows the highest agree level among the other factors. according to this table, materiality and internal auditor independence should be improved and increased since at the lower level than the other factors. there were no factors, having 5 mean values in this study. audit materiality was the key for the audit reporting due to the results of study in which materiality shows only 3.5. thus, it can be seen that audit materiality possibly increased and improve the quality of internal audit reporting in the future. regression analysis table 5. model summary model r r square adjusted r square std. error of the estimate 1 .727 a .528 .475 .38026 a. predictors: (constant), accountability & transparency, data internal auditor data, materiality, audit evidence, internal auditor independence, true and fair view, performance audit, resources & facilities according to the model summary of regression analysis, the adjusted r square revealed that the independent variables affected the effectiveness of internal audit reporting up to 47.5 %. table 6. anova model sum of squares df mean square f sig. 1 regression 11.343 8 1.418 9.805 .000 b residual 10.122 70 .145 total 21.465 78 a. dependent variable: internal audit reporting b. predictors: (constant), accountability & transparency, internal auditor competencies, materiality, audit evidence, internal auditor independence, true and fair view, performance audit, resources & facilities according to table 5 above, it can be seen that there was a significant effect of the tested factors on the effectiveness of internal audit reporting in this study. therefore hypothesis 1 was accepted (sig. 0.000). table 7 clearly shows that independence, and accountability & transparency of internal auditors significantly affected the effectiveness of internal audit reporting, with the p-values of respectively 0.001, and 0.001. therefore, sub hypotheses h1a and h1e were accepted in this study. it was a great signal that the top management of public sector could consider independence, and accountability & transparency of internal auditors to improve the internal audit reporting in public sector. however, auditor competencies, materiality, audit evidence, true & fair view, performance audit and resources & facilities allocated and used by the internal audit division were not significantly affected the effectiveness of internal audit reporting with the sig. value of respectively 0.136, 0.264, 0.443, 0.848, 0.822, and 0.053above 5the significance level of 5%. thus, sub hypotheses h1b, h1c, h1d, h1f, h1g and h1h were rejected in this study. those factors should be improved and public sector organizations should find the other significant factors positively affecting the internal audit reporting. it is mandatory for the future improvement of internal audit reporting in public sector. v. anojan/ journal of accounting and business education, 6 (2), march 2022 31 table 7. coefficients model unstandardized coefficients standardized coefficients t sig. b std. error beta (constant) 1.365 .405 3.373 .001 at .381 .106 .397 3.582 .001 iai .250 .069 .349 3.602 .001 ac -.137 .091 -.160 -1.507 .136 m -.087 .077 -.111 -1.125 .264 ae .068 .089 .085 .772 .443 tf .013 .070 .019 .192 .848 pa .023 .103 .026 .226 .822 rf .174 .089 .237 1.967 .053 a. dependent variable: internal audit reporting correlation analysis table 8. correlations at iai ac m ae tf pa rf iar pearson correlation .582 ** .559 * * .308 ** .153 .355 ** .378 * * .436 ** .507 ** sig. (2-tailed) .000 .000 .006 .179 .001 .001 .000 .000 correlation analysis revealed that, there was a significant relationship between the most tested factors and internal audit reporting in this study. the most tested factors had the significance level of 5%. it was a great indication related to the internal audit reporting in public sector. top management had the responsibility to do positive effects on the internal audit reporting by considering the tested factors. therefore, hypothesis 2 and all other sub hypotheses under h2 except h2c were accepted in this study. however, audit materiality had no significant relationship with the effectiveness of internal audit reporting in this study. therefore, sub hypothesis h2c was rejected while the others were accepted in this study. top management should take the necessary steps to improve the materiality of internal audit reporting to improve the internal audit quality in public sector through adequate professional training, seminar, workshop, and competencies. conclusion according to the code of best practice on corporate governance (2017), top management has the responsibility to establish adequate internal control system of an organization. internal control system is also important for the high level performance of an organization. management has the responsibility for the development of internal control system. thus, management is monitored and reported by the internal auditors of an organization. most public sectors of an organization have internal audit division in sri lanka. according to the research results the tested factors have significant effect on the effectiveness of internal audit reporting. further, internal auditor independence and accountability & transparency of internal auditors have more significant effect on the effectiveness of internal audit reporting in this study. finally, it can be concluded that, accountability & transparency of internal auditors, internal auditor competencies , materiality, audit evidence, of internal auditor independence, true and fair view of internal auditors, performance audit, resources & facilities allocation and use have significant effect on the effectiveness of internal audit reporting in public sector in the northern province of sri lanka. v. anojan/ journal of accounting and business education, 6 (2), march 2022 32 the effectiveness of internal audit reporting is essential for effective risk management of an organization. nowadays, most countries try to improve the risk management in public sector throughout the world. according to the research findings, it can be recommended that, internal auditor independence should be ensured to increase the effectiveness of internal audit reporting in public sector in sri lanka. internal auditors should also consider their accountability and transparency to increase the effectiveness of internal audit reporting in public sector in sri lanka. the research findings clearly confirmed that, internal auditor independence significantly affects the effectiveness of internal audit reporting due to the internal auditors; act as agents to the board and audit committee of an organization. policy makers and regulatory bodies in public sector should confirm that internal auditors should not act as agents to the top management nor allow to work with adequate independence in public sector. there are three limitations of the study: it covers four district secretary offices, covering the northern provincial council and some other provincial departments in the northern province of sri lanka.; the researcher was unable to collect the data from district secretary office of mannar and this research period was considered relatively short and the research data were collected in short time. thus, the response rate was only 56.42 %. internal auditing plays a vital role in the risk management of an organization and significantly contributes on the operation effectiveness, financial information reliability, and legal compliance of an organization in both private and public sector. the actual contribution of internal audit depends on two important phases: internal audit system development and its implementation. therefore, it is necessary to conduct future research in both sectors at regular intervals. this research was conducted in the northern province, therefore the future researcher should consider the other parts of sri lanka to reveal the actual findings related to this research area and to compare those findings as provincial policies as well as central and provincial government policies for special recommendations to improve the internal audit reporting in public sector in sri lanka. they should also consider to conduct similar research in private sector to figure out the most significant affecting factors on internal audit reporting and improve the internal audit reporting in the private sector of an organization in sri lanka. references alhassan, m., erasmus, d.g., & fred, k.a. 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(2014). factors that contribute to the effectiveness of internal audit in public sector. ipedr, 70(24). doi: 10.7763/ipedr. d, w.c.m., & a. p.a.n.s. /journal of accounting and business education, 7 (1), september 2022 25 covid-19 outbreak and industry reactions: evidence from colombo stock exchange dissanayaka w c m1 anuradha p a n s2 1research scholar, faculty of management studies and commerce, university of sri jayewardenepura, sri lanka 2finance department, faculty of management studies and commerce, university of sri jayewardenepura, sri lanka email: chiranthanadissanayaka132@gmail.com doi: http://dx.doi.org/10.26675/jabe.v7i1.21668 abstract: moving along history, it can be identified that the human race has experienced many types of challenges which did have the capacity to decide human existence or extinction from the beginning. some of these challenges were created by humans by themselves like world wars and some were created by natural forces like natural disasters and deadly viruses. recently covid-19 has taken place as a rapidly spreading virus by causing more than two million deaths and more than 95 million cases around the world as being the sixth global pandemic creating considerable influence to different industries such as agriculture, health and transportation in the world. the propose of this study is to identify the impact of covid-19 on the performance of the industries in sri lanka. using the two events and the event study methodology it is found that industry groups such as automobiles, materials, health care and equipment, household and personal care products are the significantly positively affected industries where industries like insurance and transportation have been negatively affected in sri lanka. as per the real business-cycle theory these fluctuations in the industries consider as business cycle fluctuations and the efficient response to exogenous changes in the real economic environment. hence this impact does not last long, investors and the government can recover quickly with the implementation of effective monetary policies and investment diversifications. article history received: 8 june 2021 revised: 17 november 2021 accepted: 17 january 2022 keywords covid-19, event study, colombo stock exchange, global industry classification, real business cycle theory. citation: w.c. m., d & p.a.n.s., a (2022). covid-19 outbreak and industry reactions: evidence from colombo stock exchange. journal of accounting and business education, 7(1), 25-34 introduction recently covid-19 has taken place as a rapidly spreading virus by causing more than two million deaths and more than 95 million cases around the world being the sixth global pandemic in the world. when considering the covid-19, it has also caused a huge negative impact on the world’s economy and development as like as previous pandemics according to findings of recent studies ru et al., (2021). however, according to some researches he et al., (2020) it has been identified that some sectors of china have been affected positively and some sectors have not shown a significant reaction to the pandemic. for example, it has stated that the manufacturing and information technology industries of china have been able to adjust to covid-19 and continue while agriculture, transportation, and mining industries have recorded a negative response emphasizing that covid-19 has created both positive and negative consequences in an economy. when it comes to the insurance industry in india ramasamy (2020) and journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v7i1.21668 d, w.c.m., & a. p.a.n.s. /journal of accounting and business education, 7 (1), september 2022 26 china wang et al., (2020), it has shown an opposite reaction in related territories where the indian insurance industry has shown a positive reaction while the chinese insurance industry has shown a negative reaction to the pandemic. thus, the evidence shows differences in the impact of covid-19 on different industries while those reactions can be differed depending on the characteristics of a country. this has led the path to undertake a study based on the sri lankan stock exchange ( the colombo stock exchange) which represents the performance of all stock investors in sri lanka since 1985 while adhering new standards like global industry classification standards where it represents the behavior of investors in such epidemic situations and this study has been able to highlight some areas where investors can put their effort to secure their investments in such conditions on the stock market. consequently, the objective of this study is to identify safe industries and riskier industries in an epidemic situation based on the covid19 pandemic in sri lanka. besides, it is expected to enhance the knowledge of global industry classification (gics) providing a way for investment diversification within sri lanka for various types of investors. this is the introduction section, next section reviewed related literature, and which follows the methodology, findings, and conclusion. literature review an economy has built upon different industries. there can be differences among industries depending on one country’s classifications, scope, government policies, or on their culture. however, if it is said that there is an impact from covid-19 on an economy, it means that there should be an impact of covid-19 on industries within a country directly or indirectly. when it comes to the literature there are plenty of studies that talk about the impact of covid-19 on different countries on their industries combining with challenges created by the epidemic situation and suggested strategies either from a financial perspective or in a non-financial perspective. however, according to the prevailing situation of the pandemic, none of the countries can be escaped from the negative influence that has been created by the covid-19 whether it is considered as a developed country or not. when it comes to developed countries, it can be observed that different industries have been influenced by the covid-19 pandemic in different degrees in different ways. accordingly, among many industries, the agricultural industry and live stocks have been affected severely by this pandemic due to the lack of labor-power, lack of animal feed which was risen as a result of containment of traveling and exporting food where it causes prices of meat products, vegetable oil and grains to decrease in the exporting market (siche, 2020). when it comes to food security, agriculture and covid-19 in canada it has been also identified a threat to food security in the long term but not in the short term as it cannot be observed short term price fluctuations in the food market in canada (deaton & deaton, 2020). this negative impact on the food industry is also proven by mcewan et al., ( 2020) regarding the canadian pork industry. however, in the british context, this epidemic situation has been identified as an useful condition to rebuild and sustain their fishery industry after separating from the european union by introducing their own fishery policy expecting much value-adding to the uk economy from fisheries in the future even though they are experiencing the same reduction in demand and price currently (kemp et al., 2020). likewise, the energy industry has been also subjected to this covid-19 pandemic due to reducing the demand for coal and other energy resources and it has observed a financial risk associated with the energy sector as governments have been given their top priority to repression of the virus which emphasizes the negative impact of covid-19 on the energy industry (eroğlu, 2021). consistent with this, zhong et al., (2020) it shows decreasing electricity prices compared to 2019 first quadrant including several european markets and the united states of america. similarly, it has been found that the tourism industry is more reactive to epidemic situations rather than other industries in the us and europe (uğur & akbıyık, 2020). as like as pavlyshenko (2020) there have been built up models to identify the risk associate with covid19 on stock markets and those emphasizes that different pandemics have made different influences on stock markets from time to time (baker et al., 2020). where the comparison can be taken as between the sars outbreak in 2003 and covid-19 (ru et al., 2021). the event study methodology has been used to analyze sixty-five territories including north america and european countries which have active stock exchanges d, w.c.m., & a. p.a.n.s. /journal of accounting and business education, 7 (1), september 2022 27 and found that countries which had early experiences with sars have been more sensitive towards covid-19 outbreak compared to countries that did not have experiences with sars, (liu et al., 2020; haroon & rizvi, 2020). by using 64 countries and statistics of daily cases and deaths ashraf (2020) it has been able to identify negative movements of stock markets related to developed countries by using an event study. further, ramelli and wagner (2020) stated that the pandemic has created a positive impact for some industries too when considering the us context. in 2013, the influenza disease has caused a decrease in trading activities, increasing in the bid-ask spread in the united states stock markets mctier, tse, and wald (2013) as the flu impacts the behavior of institutional investors and market makers giving us an understating of how the covid-19 can be affected for such cases currently. looking at the ebola virus which was one of the pandemics in history from 2014 to 2016, has also harmed the affected countries and countries which had investments in infected countries which provides us some hints of covid-19’s impact and tackling them. it was found that us stock markets have been more sensitive to the ebola virus even though the us did not suffer much by ebola virus but because of us investors had invested in west african countries where ebola has caused significant declines in unsteady and small stocks indicating to expect such experiences with covid-19 to (schell et al., 2020). thus, it can be said that covid-19 has created both positive and negative consequences in developed countries as like as previous pandemics. in developing countries, the agricultural industry experiences the same condition as same as developed countries which emphasis the same problem of lack of labors, increasing the labor expenses and inability to sell agricultural products due to the less demand created by quarantine and lockdown policies where it caused a huge drop in the agricultural industry (hai-ying & chang-we, 2020). similarly, there can be seen a huge impact from covid-19 on the food and beverage industry in the means of labor absenteeism, waste of perishable food as short term circumstances where it has to be expected less return on investment in food and beverage industry and less apportionment in the gdp as long term consequences (chowdhury et al., 2020). also, the sugar industry in india has been influenced by covid-19 negatively as the pandemic situation has created a reduction in sugar demand and ethanol demand which uses as an energy resource in india (solomon et al., 2020). however, in the indian context, the insurance industry has been positively affected by covid-19 as people are being afraid of the pandemic and afraid of huge hospital expenses if they have to get hospitalized (ramasamy, 2020). furthermore, the banking industry in india has been affected adversely by this pandemic because of lacking employees, increasing default risk of customers, increasing risk in personal loans, and absence of outsourced services of banks, etc., (ramasamy, 2020). the insurance industry in china has been negatively impacted because of decreasing premiums, restrictions on insurance sales agents, online marketing methods, banking services, and other quarantine regulations (wang et al., 2020). the telecommunication industry in developing countries in asia seems positively affected in the covid-19 period because most people had to work from home (zhang, 2020). moving on to saudi arabia which can be considered as a developing country, it has also been able to take the advantage of the covid-19 pandemic to initiate their “the saudi vision 2030 framework” which aims for a huge digital transition in the future where there are more promotions towards artificial intelligence, mobile applications and for other technological advancements to provide solutions for covid-19 while aligning with their framework at the same time (hassounah, raheel, & alhefzi, 2020). in ethiopia, as a consequence of bans for traveling and restrictions on daily lifestyles it has caused for a fall in the insurance industry which is playing a major role in the economy creating an instability in the country (worku & mersha, 2020). in indonesia, the transport system, trading, and health sectors are the sectors that have been negatively affected by the covid-19 (susilawati et al., 2020). the taiwanese hotel industry in 2007 has also impacted due to a deadly virus outbreak (sars), chen et al., (2007) which provides us a sign of the impact of a pandemic which can also be expected by the covid-19. the tourism and hospitality industry in sri lanka has been also adversely affected as like as in china where more than 200,000 employees in the hotel industry have been influenced negatively due to the suspension of working in hotels, restaurants, travel agencies as a requirement of the government covid19 prevention policies like lockdowns and quarantine (sivesan, 2020; suresh. et al., 2020). in addition to the hotel industry, the apparel industry is another segment that should be considered in the sri lankan economy and it has been also faced for negative consequences of covid-19 as people tend to save money d, w.c.m., & a. p.a.n.s. /journal of accounting and business education, 7 (1), september 2022 28 for necessities rather than spending on unnecessary wants when it comes to local demand and foreign demand respected to exports (bolonne, 2020). it is found fewer studies in the sri lankan context on the industries influenced by the covid-19. consequently, this study analyzes the industries which have been affected by the covid-19 using gics indices of the colombo stock exchange (cse) employing the event study method. according to the real business cycle theory, these kind of health problems do not cause for changes in real business cycles as they do not persist with the adaptation of new health practices and new lifestyles though it temporarily changes human expectations unless it has done a permanent damage to labour force and resources significantly (simposen, 2014). likewise, in this pandemic the reflection of expectations and changes in monetary factors can be observed in stock markets price fluctuations and by using the event study methodology it is expect to capture those immediate reaction of the colombo stock exchange in industry wise with the unexpected covid-19 pandemic and it is intended to observe whether the covid-19 pandemic has caused for a change in real business cycle with respect to the sri lankan context. methods the event study method is used to evaluate abnormal changes in sample stock prices or indexes following a specific event. the impact of covid-19 in sri lankan industries has been tested by this event study methodology using two event dates. one is the date of reporting the first covid-19 patient in sri lanka on 27th january 2020 and the second one is the date of reporting the first local positive covid-19 patient on 10th march 2020. cumulative abnormal returns (car), abnormal returns (ar), and normal returns (r) are the variables that have been considered in this study which returns are calculated by using 20 industry groups in the cse on the glcs. the industry groups indices include energy, automobiles, materials, health care, household, and personal products, transportation, insurance, consumer durables and textiles, diversified financials, commercial and professional services, consumer services, capital goods, retailing, telecommunication, pharmaceutical, biotechnology, and life industry, utilities, food and staples retailing, banks, real estate and food, beverage and tobacco which represents all listed companies in the cse. the data was collected from the cse database. each event uses an estimation period of 150 days before the observation period (160 days before the event date) and 10 days after the event date as the post-event period. according to the literature, the estimation period can be started from 250 days to 30 days prior (-250 to -30) for the event date (aktas et al., 2007). as the daily stock returns have been calculated using gics industry indices and as it is focused on short-term influences of covid-19, it is believed that having a ten days long observation period is sufficient for identifying the impact of covid-19 around the events. the expected returns of the industries during the testing period have been estimated by the market model using equation 1. r i, t = α i + βi r i, m, t (1) the average abnormal rate of return of each industry estimated using equation 2 ar i, t = r i, t (α i + βi r i, m, t ) (2) the cumulative abnormal rate of return of each industry estimated using equation 3 car i (t1-t2) = ∑ 𝐴𝑅 𝑡=𝑡1 𝑡2 i, t (3) where, r i, t = the return of a particular industry index i on the trading day t d, w.c.m., & a. p.a.n.s. /journal of accounting and business education, 7 (1), september 2022 29 r i, m, t = the rate of return of the market/return of the all share price index ar i, t = the average abnormal rate of return of index i on the t th trading day. car i (t1-t2) = the cumulative abnormal return rate of index i in the event period. results and discussion this section analyzed the positively affected and negatively affected industries by the covid -19 pandemic in sri lanka related to event 1 and event 2. table 1 summarizes the results received related to event 1 to identify the impact of covid-19 at its initial stage in sri lanka. table 1. the results of event 1 industry event date post event period car t-value car t-value spcseeip 3.19% 0.639 -6.27% -1.256 pcsemip 1.16% 1.335 -1.83% -0.664 spcsecgp -0.65% -1.228 -1.91% -1.141 spcsecpp -0.35% -0.168 -4.28% -0.657 spcsetp -1.13% -0.466 -2.21% -0.289 spcseamp 1.84% 0.780 0.66% 0.088 spcsecap 0.28% 0.253 2.70% 0.776 spcserp 0.20% 0.180 -2.54% -0.713 spcsefrp 0.25% 0.320 1.47% 0.603 spcsefbp 0.21% 0.426 2.41% 1.553 spcsehpp 1.06% 0.671 -2.44% -0.489 spcsehsp -0.06% -0.049 1.08% 0.282 spcseplp 0.05% 0.107 0.00% 0.004 spcsecs -0.99% -0.945 -3.92% -1.189 spcsebp 0.13% 0.192 0.10% 0.046 spcsedfp -0.17% -0.224 -1.34% -0.563 spcseinp 0.94% 0.394 2.92% 0.385 spcsetip 0.19% 0.179 -0.58% -0.171 spcseuip -0.16% -0.159 -0.31% -0.100 spcserep 0.52% 0.363 -0.39% -0.086 this table presents the results of the event analyses one. event i defined as the date of reporting the first covid-19 patient in sri lanka on 27th january 2020. table includes cumulative average returns (car) and t values on event date and post event period. the * mark (***), (**) and (*) indicate the significant level at 1%, 5% and 10% respectively. as exhibited in table 1, it evident that the industries in the cse had had not been responded for the event 1 significantly. this result is quite important when compared with the countries like china, japan, india, korea, singapore, australia, and thailand where there were significantly negative reactions in stock markets on the date of 20th january 2020, (the date which the official announcement of identification the new covid-19 virus made to the world) even though considerable number of patients were not identified in their respective territories (liu et al., 2020). in contrast, cse had not shown any significant reaction in the means of stock returns while most other countries have responded negatively to the discovery of the novel coronavirus. in addition to that, as being the first patient identified was a chinese, there was less attention to the impact of the disease since the patient was not a local person. moreover, there were no other consecutive cases were reported continuously after this incident within the sri lankan context until the first local patient was reported on 10th march 2020 where there is a gap of more than 40 days between the two incidents. due to those reasons as per table 1, event 1 has not done a significant impact on any of the industries in cse. table 2 exhibits the analyses of event 2 which have created a significant impact on the industries in the cse compared to the results of table 1. as table 2 shows, some industries have been affected positively while others have been affected negatively. d, w.c.m., & a. p.a.n.s. /journal of accounting and business education, 7 (1), september 2022 30 table 2. the results of event 2 industry event date post event period car t-value car t-value spcseeip -1.08%*** -0.342 15.61%*** 4.944 pcsemip 3.65%*** 4.191 2.47% 1.419 spcsecgp 0.34% 0.643 0.28% 0.268 spcsecpp -8.17%*** -3.968 4.72% 1.146 spcsetp -4.79%** -1.980 -25.94%*** -5.359 spcseamp 4.15%** 1.761 13.64%*** 2.895 spcsecap -0.78% -0.712 -7.86%*** -3.575 spcserp 0.22% 0.198 1.22% 0.543 spcsefrp -0.56% -0.727 -2.18% -1.412 spcsefbp -1.86%*** -3.776 1.24% 1.259 spcsehpp 1.99% 1.263 -5.84%* -1.852 spcsehsp 2.19%* 1.804 -5.10%** -2.102 spcseplp 0.21% 0.489 0.55% 0.648 spcsecs 0.48% 0.456 4.49%** 2.151 spcsebp 2.26%*** 3.233 -2.19% -1.565 spcsedfp 0.35% 0.461 -1.16% -0.766 spcseinp -2.54% -1.059 -6.12% -1.275 spcsetip -0.46% -0.425 1.74% 0.804 spcseuip -0.48% -0.479 -12.13%*** -6.098 spcserep -3.93%*** -2.729 6.02%** 2.093 this table presents the results of the event analyses two. event 2 defined as is the first local positive covid-19 patient on 10th march 2020. the table includes cumulative average returns (car) and t values on event date and post-event period. the * mark (***), (**) and (*) indicate the significant level at 1%, 5% and 10% respectively as per table 2, event 2 has provided enough pieces of evidence that the covid-19 has been created a significant impact on industries rather the event 1. the behavior of industry returns during the testing period of event 2 is shown in the figure 1. figure 1. behavior of abnormal returns on the "event 2" and categorization according to figure 1, the classification of industries has done base on the abnormal returns generated by each industry. industries that had earned more than +1% considered as ‘strong positively impacted industries’, +1% to -1% abnormal returns earned industries as ‘less impact industries’ and those d, w.c.m., & a. p.a.n.s. /journal of accounting and business education, 7 (1), september 2022 31 have earned less than -1% has considered as ‘strong negatively impacted industries. the results identified five industry groups namely automobile, materials, banks, health care equipment and services, the household and personal products industries out of twenty as positively impacted industries by the covid19 at its initial stage. industry groups such as consumer services, the diversified financial, the capital goods, retailing, pharmaceuticals, biotechnology and life, the telecommunication services, utility and food, and staples have appeared as less impacted industry groups. those industry groups namely consumer durables and apparels, energy, food beverage and tobacco, the insurance, real estate, and commercial and professional services were identified as the strongly negatively impacted industry groups. the automobiles and components industry group is the most positively affected industry group in sri lanka with a 4.15% of reported abnormal return under a 5% level of significance and the most negatively affected industry group can be considered as the commercial and professional services industry group with a -8.17% abnormal return under a 1% level of significance. so, the abnormal returns generated on the date of the first local covid-19 patient were identified ranging from +4.15% to -8.15%. however, according to the results of the post-event period, the energy industry group and real estate industry group had started to earn positive abnormal returns with a considerable significant level, and it is suggested to have further investigation related to those two industry groups. moreover, when the accumulated abnormal returns take into account, the transportation industry has to be considered as the most negatively affected industry group as it results in a more than 30% decline in the accumulated returns where the energy industry group will become the most positively affected industry group with a more than 14% reported accumulated abnormal return under a 1% level of significance. so, except for these two industries and the banking industry, the reactions of other industry groups are very same as the behavior of industries in other countries where the banking industry in sri lanka shows a positive reaction while other countries were reacted negatively. according to the above results, it can be identified that the covid-19 outbreak has created a significant impact on the cse not only in a negative manner but also positively in different industries in sri lanka depending on the abnormal returns generated during the observation period where those reactions can be observed changing after the immediate reaction on the event date emphasizing the application of real business cycle theory during a pandemic. conclusion the impact of the covid-19 on the cse shows a mixed result. industry groups such as automobiles and components, materials, health care and equipment, household and personal care products, and banks were affected positively by covid-19 in the short run. however, industry groups such as consumer durables and apparel, energy, food, beverage and tobacco, insurance, real estate, and commercial and professional services industries were identified as riskier industries in the cse during the pandemic. hence, this study analyzed the impact of covid-19 only in the initial months of the pandemic in sri lanka, those results have to be further investigated expanding event studies for the phase of the second wave and so on. thus future studies can be developed on increasing number of events, extending time period considered and also depending on the different variants of covid-19.finally, it can be concluded that the covid-19 pandemic has not created a complete negative influence on the cse which discards the belief of that the covid-19 has only created a negative impact on a country allowing sri lanka investors to diversify their investments industry wise in a pandemic as led by this study without withdrawing their investments from stock markets but reinvesting them in safe industries combined with effective monetary policies. the results emphasize that the covid-19 pandemic has not caused for a change in the real business cycle as it has shown price adjustments in cse after the “event 2” even it has displayed a significant reaction on the event date at the initial stage of covid-19 reflecting changes of expectations but not real economic factors. d, w.c.m., & a. p.a.n.s. /journal of accounting and business education, 7 (1), september 2022 32 references aktas, n., de bodt, e., & cousin, j. g. 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(2020). implications of covid-19 for the electricity industry: a comprehensive review. csee journal of power and energy systems, 6(3), 489–495. https://doi.org/10.17775/cseejpes.2020.02500 a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 45 le grand voyage: a great journey to liberate islamic accounting education from utilitarianism and secularism arista fauzi kartika sari 1 rahmawati 2 harun al-rasyid 3 1,2,3 accounting department, islamic university of malang, indonesia email: aristakartika@unisma.ac.id doi: http://dx.doi.org/10.26675/jabe.v4i1.6402 abstract: the aim of this study is to release students of islamic accounting course from secularism and capitalism. this research uses dialogic approach to raise the awareness of criticalmuslim students. the philosophical values of the french movie entitled “le grand voyage” were taken as method of analysis. the reality of islamic accounting students who are secularist and capitalist was then metaphorized into this film. the results of this study showed that the students could find not only material values, but also emotional values and spiritual values in accounting. there are several values that can be seen from the students’ story telling: material value , altruism value, love value, and spiritual value. it is hoped that this article could give an overview to islamic accounting educators to provide accounting course accompanied by islamic substance of tawheed. keywords: hijrah islamic accounting education, metaphor, secular, capitalist introduction the film "le grand voyage” tells about a young man's transcendental process while traveling from france to mecca to accompany his father on a journey to pilgrimage by car. the trip took 1 week with a distance of 4,898 km. the film is about the clash between a devout man of his faith, le pere, and his thoroughly secularized son, reda, who does not have a clue about the meaning of islam. le pere, representing people who were educated with the islamic sultanate system, emerged with a hard-hearted and conservative figure dealing with the rules. he even still speaks moroccan arabic to his children during their lifetime in france. contradictively, reda is a stubborn, liberal and secular young man who was born and raised in france. reda’s character more or less depicts the current condition of islamic community which tends to be secularistic. a stubborn, liberal and secular, reda is reflexion of students who are taking islamic accounting courses who are also secular because capitalism is inherent in the reality of accounting. mulawarman (2012) explained that students prefer anything from the "west"; so in the end it is the western mindset that they embrace as a form of modernity. the eastern method is inferior to them who are from the east . journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 46 in their journey, the father and the son met a man named mustapha, a french-speaking turk who helped them at the border. le pere did not show his entusiasm when he met mustapha who said he wanted to join them on pilgrimage. le pere thought mustapha has bad intentions towardsthem. on the contrary, reda is very fond of mustapha who has indulged his curiosity as a liberal and secular teenager. islamic accounting students are familiar with the utilitarian value inherent in conventional accounting. utilitarian does not teach sincere values, it only assumes something is good if it brings benefits or contribution in the end without the process. this is depicted at the time when reda who welcomed the presence of mustapha realizedthat mustapha shows bad intentionby stealing le pere’s money after taking reda out for a night of drinking. secularism and utilitarianism are inherent in students’ life as long as they study conventional accounting and later when they study islamic accounting they are still attached to these values. islamic accounting education should liberate an educational process (kamayanti, 2011). by liberation it is intended to free students from being prisoned in the value of capitalism which is wrapped up by secularism and utilitarianism. the concern is the condition when students are studying islamic accounting while capitalism is still inherent in their mindset. it gets worse, if the value of capitalism is covered up in the name of sharia. efferin (2015) stated that science and technology, including accounting, were created to shape arrogant people. why? the answer is because now there has been a complex and multidimensional crisis, where science is often built with submission to dogma, rationality, empiricism, and objectivity to the point that it often makes a secular science with religion. mulawarman (2008) stated that, the mainstream thought that is developed in accounting is inseparable from the dominance of the secular scientific paradigm which is characterized by three main things, namely self-interest, power, and relativity that are wrapped up with capitalism. religion or spirituality is considered to have no place in the development of accounting science. if the conventional accounting only deals with struggling on how keep transaction journals and repoting financial statements, which eventually arrive at preparing fundamental information for stakeholders to make a decision, how should learning in accounting sharia be conducted? islamic accounting education is not sufficient if it only teaches about halal and haram transactions based on the qur'an and hadith, the difference between usury and profit sharing, or how to prepare financial statements. islamic accounting is not just an accounting science preceded by theword “sharia”. accounting cannot only be seen as a tool/practice that is free of value, neither can islamic accounting. if accounting is only seen as a tool, then the mindset of students will be oriented towards achieving the technical capabilities of islamic accounting based on technical understanding. ideally, having a commitment to "sharia" means having a commitment to islamic values that underlies all life practices. the technical learning process will create students only posses technical understanding of islamic accounting, such as journaling, sharia financial statements reporting, and the worst will create pragmatic islamic accounting students. pragmatism in islamic accounting education research was carried out by sari, triyuwono, and djamhuri (2016) , which explained that technical islamic accounting learning will produce students who think pragmatically, just knowing about halal and haram, islamic financial reporting as well as lack of understanding of non-material values in an accounting transaction . if the material presented is still in the capitalist capacity that is defined, then the consumers (in this case are the students) will also be “sharia” human capitalists . pragmatic islamic accountingis also explained by triyuwono (2012), who stated that accounting that is modified as needed with islamic values is used for practical needs. in the end, it does not pay attention to the basic sharia values that are deep and the results only creating a pragmatic sharia business world. the main aspect of rahmatan lil'alamin in islamic accounting has finally become negated because it focuses on technical learning of islamic accounting. such learning conducted by educators is done separately between intellectual intelligence, emotional intelligence, and spiritual intelligence, but focuses more on intellectual intelligence. this means that islamic accounting learning has been reversed, has been "misguided" (triyuwono, 2010), where intellectual intelligence is considered as the content, while mental a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 47 and spiritual intelligence is considered as the skin. such education is also what ultimately causes students to think secularly. indeed, islamic accounting presents to deconstruct modern accounting (triyuwono, 2006). triyuwono delivered the epistemology of sharia accounting through paired epistemology: "islamic accounting seeks to contribute to accounting as a business instrument while supporting the discovery of the nature of self and the purpose of human life. giving mindset accounting as one of the instruments to "unite with god" (ber manunggaling kawula gusti). that is, islamic accounting is not only the bussiness instrument, but also to unite with god, which is the almighty to whom human beings will return (lillahi wa inna illayhi raaji'uun) " looking at the epistemology presented by triyuwono, accounting science and spiritual values should be expected to contribute to sharia business entities and at the same time direct to discover the nature of self and the purpose of life. islamic accounting education is not only about learning the development of sharia business practices, but also as one of the ways and provisions for returning to allah. the substance of islamic values is the unity, not the secularity. malang islamic university whose education system is based on the islamic values of ahlussunnah waljamaah, surely teaches various islamic values in its education process. however, based on the researchers' initial observation, there is still a secularism and utilitarianism which ends in the pragmatism in the mindset of students in islamic accounting courses taken from conventional accounting courses. students’ understanding about islamic accounting is still limited to the contract -akad used; and they are still struggling to understand the accounting material in shariah form. in conclusion, the beginning of the researcher turned out that islamic accounting students do not understand integrated islamic values that are "fundamental" in islamic accounting . technical learning will lead to banking style 1 learning models (thomson & bebbington, 2004), that can kill critical awareness, even though islam is a critical religion. banking-style learning is therefore not in accordance with the spirit of islam. understanding the importance of islamic values and objectives is the first compulsory awareness for teachers and students. it is very alarming when students studying islamic accounting courses still adopt the inherent values in conventional accounting, because it can shape them to be pragmatic sharia students . this research will describe the process of “hijrah” sharia accounting students to leave secularism and utilitarianism through the process of education of critical-islamic awareness by using a film metaphor entitled "le grand voyage". based on the explanation described above, this paper becomes interesting, because this research is in the field of islamic accounting education, was conducted at the islamic university of malang which is inspired by islamic values. this research can contribute to add references about awareness in the field of education, especially islamic accounting education. rebele & e. kent st. pierre (2015) stated that research published in the top accounting journals has been stagnated. the research published in the accounting journals relates to limited group of topics, uses similar research methods, and is based largely on the same underlying theories. motivation in this study is education method in this research can be used by islamic accounting teachers to liberate their students from secularism and utilitarianism. before teachers liberating the students, they have to liberate themselves first, about the substantive of islamic accounting. besides, the journey of students to attend college is also a "great journey", since the mindset of students as agents of hijrah is formed. hijrah form of islamic accounting education is a process of emancipation through dialogue without being stuck in the stiffness of textbooks and the numbers in accounting. the research question posed by the researcher is "how does the process of hijrah 2 of the islamic accounting students take placeusing the le grand voyage metaphor?. 1 students as a passive recipients of information must be filled in like a deposit 2 hijrah for the sufis and also the scholars of jurisprudence as an inner strength in setting aside everything other than allah from the heart. (nu online, 2018) http://www.nu.or.id/post/read/92567/pengertian-hijrah-dalam-kajian-tasawuf http://www.nu.or.id/post/read/92567/pengertian-hijrah-dalam-kajian-tasawuf a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 48 literature review research about islamic ethics in accounting education also conducted by ahmad & ahmed (2017). the research shows that incorporating islamic ethics principles (integrity, sincerity, and righteousness) into accounting education will be a significant contribution towards generating ethical accounting students. sharia foundation of islamic ethics is good principles, valid, and reliable to enchance accounting education quality. kamla (2015) has conducted a research about critical muslim intellectuals’ thought (cmis’). he illutrated how cmis’ thought based on postcolonial perspectives of cultural hybridity and second modernity can enrich and inform critical accounting research attempts to develop an emancipatory accounting project. this paper demonstrates that cmis’ thought and methodology can contribute to challenging the domination of western/conventional accounting and its claims to objectivity, neutrality and universality. in particular, the paper highlights how cmis’ enlightened approaches to hermeneutics; their emphasis on spirituality, ethics and liberation theology; their radical epistemological and methodological research and education agendas offer outwardlooking alternatives to developing accounting thought. the study about islamic accounting education has been carried out by triyuwono (2015b) who deconstructed islamic accounting education which was allegedly secular, became an education with the main character of islam, tawhid. the result stated that the structure of the curriculum, the substance of the subject, the structure of the self and the process of education, the structure of the relationship between the teacher and students and the community need to be integrated into a single form of unity leading to taqwa. in aother study, triyuwono (2013) explores the nature of islamic accounting in terms of its function and objective based on the perspective of khalifatullahfilardh go beyond the worldly life. islamic accounting functions as an instrument of doa (prayer) and dzikr (remembering god) for awakening god consciousness. kamayanti and rahmanti (2014) also wrote in their article about islamic financial management learning which is often trapped in pragmatism; so it was constructed based on islamic critical awareness using a dialogical approach. as a result, students can critically practice islamic financial management that have shied away from syariah value and propose alternative solution. methods this research is revealed through a story about an exemption which is the empirical result of dialogue obtained from the learning process between researcher and students. data were collected from recordings and assignments for one semester in the islamic financial accounting class of the accounting study program 2017/2018 academic year at malang islamic university. data taken were in the power point presentation format and tasks. this research is used to raise awareness of the critical-islami student using dialogic technique proposed by freire as the educational value of love, humility, hope, and confidence (kamayanti, 2012). however, if freire stop at the level of love of the world, then in this study, love is transcended towards love for god. the method of analysis in this study takes the philosophical values of the film "le grand voyage" which is metaphorized with the reality of islamic accounting students. it is possible to use metaphor as an approach of analysis in an accounting study as explained by llwellyn (2003): "... metaphor provides both a "way of thinking” about organizations and a "way of seeing" ... metaphor theorizes through linking the unfamiliar to the familiar; it creates meaning and significance through "picturing" or "image-ing" the world. " a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 49 llwellyn explained that the use of this approach will form a level of metaphor-based knowledge or what he calls metaphor theorizing, so that it can create meaning and significance through the depiction or imagination of the world. metaphors in accounting research are also explained by armenic and craig (2009): "metaphors about accounting are important because they affect what people understand about accounting phenomena and concepts." this research employs metaphor for it can make it easier for readers to understand the explanation of reality and accounting concepts in a more simple way. an example of accounting research that uses metaphors is the one conducted by kusdewanti et al. (2014), which used “bantengan dan topeng malangan” to describe the reality of indonesian accounting resistance to the "power" that is currently at war. there are also writings from triyuwono (2015) who used ball metaphors to conceptualize performance in arema football clubs. sari (2016) also made metaphorical research of the triangle hijab as a concept to fight corruption. this study uses the summary of values implied from the film "le grand voyage" about the migration of a young man metaphorized to see a reality of the hijrah process of sharia accounting students. the process of hijrah that becomes a metaphor is taken from the words or actions of the characters reda and his father, le pere. based on the explanation, the results of this study are arranged with a narrative style, which by creswell (2007), has a specific focus and contextual. this narrative style has been carried out by kamayanti (2012), who uses a dialogical approach to build the (prospective) awareness of accountants through love. results secularism in islamic accounting at the beginning of the journey, reda who was unwilling to take his father to mecce for the pilgrimage, drove the car at a high speed. he wants to get to his destination immediately, though he knows it is a very long distance to travel.. his father told him to be careful, but reda didn't kristen to him. until one day his father wanted reda to park his car when he was at customs for a passport check. "i have to pray," his father said. "now?", asked reda with an expression of confusion . "be patient, we are now in customs," he continued. "then why?", answered his father. "this is not a place for prayer," answered reda. his father sighed and looked at reda while saying, "you believe in god?" hearing his father's answer, reda just stayed and finally parked the car. (lloyd, 1972) freire states that in order for the colonized to understand that they are being colonized it is necessary to make an effort to change naive consciousness into critical awareness. that is, even before starting aks (islamic financial accounting), this awareness effort is a trigger for dialogical learning processes. like reda who secularized worship with world activities, islamic accounting students are actually also being "colonized" by unconscious secularism that has been carried away in accounting. the lecturer started the course by giving a question to the students regarding the difference of islamic accounting from traditional accounting to kow the students’ initial understansing about accounting. almost the whole class mentioned money, figures, debit and credit, calculators, financial statements report in answering the quesrion. based on their initial answer, money, it indicated that accounting students in the 6th semester have been closely tied to the idea that accounting has to do with. accounting could not be separated from money, since money has taken much of their attention ever since they were in college. the materialistic nature of money has led students to be materialistic as well. after that they continued the answer with things related to money, such as numbers/figures, debit and credit, calculators, financial statements report; all of which were their world in undergoing lectures in accounting. an understanding of conventional accounting was answered, then i asked thestudents to describe islamic accounting. things which came up from their minds were "halal labels, islamic banks, al-qur'an and hadiths, iqtishad cooperatives (islamic cooperatives in unisma), akad/contracts, mosques (as a place) for zakat management”. it can be conluded that students have understood the difference between islamic and conventional accounting, but only skin deep knowledge. according to the students goods a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 50 without halal labels do meet sharia rules since they associated shariah with halal labels. islamic financial institutions, such as islamic banks and sharia cooperatives, are now being intensified to be built in indonesia in a n attempt to be an islamic economic center. al-qur'an and hadith are used as guidelines for islamic accounting. the next question i asked them was their purpose of studying in college. they just kept silent a while until some saidfinn to get a diploma and to make our parents happy." but, faisal, one of the students replied shyly: "for worshipping", he said. surprisingly, his answer was responded with laughter from others students. one of them even suggested him to go to islamic boarding school. i came closer to him and asked him why he said so.. then he replied to get knowledge and god bless. alhamdulillah, this is the answer i wanted to hear from the students. it can be concluded that secularism indeed stays in students’ mind. in other dialog with students when discussing conventional accounting subjects, such as introduction to accounting i, introduction to accounting ii, and so on, i asked the students whether they saw the relationship of the subject with religion. whether god exists in those subjects mentioned. the class was in silence and they looked at each other in confusion. salma, one of the students, said no for the answer. i tried to provoke their thought by asking them why religion exists. i asked them whether god exists in religion subject. confidently they said a yes in unison. i then told them that if they thought that god exists in religion subject but not in others it meant that they were secularist. 3 , that they separated the world and the life after no one disagreed. islamic accounting education is brought from the conventional secular accounting education system which has forgotten the nature of god's creation of human beings as found in qs 51:56 "and i (allah) created not the jinn and mankind except that they should worship me(alone)". capitalism in islamic accounting "i feel honored to meet such a devout person like you. today’s people only care about money. they don’t even think of god any more. here in turkey people only work for money whivh in turn oly generates more power”, said mustapha, a person whom they met on their journey to mecca and wanted to join them. reda likes mustapha as he realizes that mustapha cacn give him what he can not get from his father, a freedom. until one day mustapha takes him out for a night for drinking and ended by stealing hi father’s money. the incident does not even change reda’s character who still keep being selfish and materialistic.. reda is angry when his father just gives the money for them to go home to a beggar woman. he can not understand the reason undeerslying his father’s deed. they then in involve in a serious squabble. the story illustrates the circle of capitalism. wealth only belongs to those who have a lot of money and power. nowonder if such people treat money as their god (in small g) and money is the goal of life of the capitalist. capitalism according to triyuwono (2006), is not value-free, because during the process of its creation it involves human beings who have personality and are full of interests. the main values inherent in modern accounting are egoistic and materialistic values that are embedded in utilitarian values. so this is where islamic accounting is present to deconstruct modern accounting. islamic accounting as a business instrument also supports the discovery of the nature of self and the purpose of human life. at the beginning of the islamic accounting lesson, there were two students who could not take courses, because they were late. the following week they met me to ask me do write their names on the attendance list by telling me excuses for their absence. 3 secular is separate material aspects as one of human needs with substance as spiritual beings. or can be split between the world and the hereafter, where nature is actually something that is a unity. for example, separating worldly knowledge from the science of religion, separating material things from the spiritual. the concept of tawheed, should all these things are inseparable (triyuwono, 2015b) a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 51 sardi, one of the late coming student begged on me not to cross his name on the attendance since he had been absent before and the absent would affect his grade. it turned out to me that all his efforts was to save his grade.. the similar thing happens to mustapha, one of the character in le grand voyage, who lies to reda and his father and deceits them as well for the sake of money. in his book, triyuwono (2012) states that if accounting is formed by the environment in a capitalist environment, then the information conveyed also contains capitalist values. then the actions and decisions taken also contain capitalist values, so the reality created by accounting is also capitalist reality. "you are accounting students, aren’t you?". after explaining the material on the slide , i asked students. "yes ma'am," they answered. "if so, you are the reality of accounting right?" "yes ma'am," they replied again. i just looked at them, "so, we’re capitalist?" said one of the students, and the other was silent. "i didn’t say it, but your friend did" i replied. "what kind of capitalism, ma'am?" asked giman. "we're not a company," he continued. "is capitalism only takes place in the company? no. capitalism also exists in our everyday lives. okay, are you capitalists or not. ask your hearts, huh?" i gave a break to students to get ready. "the most important interest of the company is profit, money what is the main interest of students?" a moment of silence, they thought, then there were some students who answered , "a grade, ma’am." with hesitation. "yes, your interest or your ego is value. that is the first characteristic. the second is materialistic, if the company’s materialistic character is profit oriented, wat about you? is it the gpa oriented?" they nodded. "the last one is utilitarian. utilitarian is when something is considered correct it if it brings utilities (material benefit) for himself, and without seeing how the process takes place what is important is to get a grade. am i right?” they just stared at me. "why do you just keep quiet?" i asked them. "i was thinking ma’am, why do i feel like that?" sarmi answered with a smile. "yes ma'am, i'm also asking my heart." surya answered. "so what do you feel?" i asked them again. sarmi answered cautiously, "i am capitalist ma'am." capitalistic accounting will form a capitalistic network of power. the net power is profit. you could say that the profit becomes a worship or pseudo god for the capitalists. making pseudo orientation of human life orientation, and turning to the power of god. this reality makes people forget the creed "laa ilaa ha illa allah" that there is no other god than allah. discussion liberating process "there is something i want to ask" said reda, "why don’t you take a flight to mecca? that's much easier." the father replied, "when sea water rises into the sky, it will lose its saltiness to become pure again." "i mean it", said reda to confirm his father's answer. "sea water evaporates as it rises to the clouds, and when sea water evaporates, it will become fresh water . that's the reason why it's better to take a pilgrimage on foot than to ride a horse, and it's better to ride a horse than to drive a car, and it's better to drive a car than to take a boat, and it's better to take a boat than to take an airplane.” islamic accounting is created technically and philosophically. technically, islamic accounting exists because of the growing development of sharia business entities in indonesia. philosophically, islamic accounting was created to free the net of power of all capitalism (triyuwono, 2012) , which was obtained from conventional accounting that was not value-free. before stepping on islamic accounting material, students are first made aware of this capitalist reality. this a great journey, not for travelling "why don't we stop in milan? maybe i will never see it." asked reda. "what are you going to do in milan?" replied his father. "i don't know ... taking photos, seeing the sights, going around the city," said reda. "do you think we are tourists? stop in every city we go through?" a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 52 reda's father has a great mission to mecca, which is to perform the pilgrimage. so why doesn't he take the plane to get there faster? because he wants to enjoy every second of his journey, to make it holy and clean again when he arrives at the baitullah. reda, on the contrary, his only purpose is to accompany his father. the goals of college students are also varied. their goal is to conquer the world, to get prosperity, or in other words to become rich. this goal makes them forget the purpose of human creation by god, namely to worship him. worship in a narrow sense is like doing shalah, zakat, fasting, hajj, and so forth. the goal of worshipping is to achieve prosperity in the afterlife. "is it distinguished like that for the purpose of the world and the hereafter?" i asked the student. "yes" everyone answered at the same time. i told them that it was really a shame if they thought that way; that worshipping were only do prayer, fasting, give charity, and the like. for the moment the class was in silence and i let them to think. i then asked them to calculate the 24-hour time they had in a day. “ok, class as accounting students you must be good at working with numbers. you have 24 hours a day, and you have to pray five times a day, don’t you? how much time do you spend for each prayer?” "5 minutes mom," ayu replied. "only 5 minutes? let’s say 10 minutes. 10 minutes multiplied by 5 is closer to 1 hour. that is the time you spend to pray in a day including all the sunnah prayers and dhikr. what about qur’an recitation? 3 hours?" "hahahahaha, it’s too long ma’am. one hour is more than enough, ma’am" sarman answered. "then how much? 2 hours? ehm, let’s make it 2 hours. so, how many hours doyou spend your time for worshipping? 3 hours, right? then added with the night prayer (tahajjud prayer) for about an hour”. "how much is the total? 4 hours, isn’t it? in 24 hours you spend 4 hours for worshipping, for the purpose of the afterlife. and the rest is 20 hours used for worldly affairs. oh, i see? whereas the afterlife is much longer than the world, it is the eternal life. astaghfirullah. how long do we live in this world, 65 years? 70 years? " "nobody knows, ma’am, it could be just an hour." ayu replied. "well, how longdid the prophet muhammad live in this world? 63. if we live longer than the prophet muhammad did, it means we get a life bonus from allah, so that we can do worshipping will be longer." i replied. "allahmdulillah ... what a pity it is; 20 hours for the worldly affairs compared to 4 hours for the afterlife. what do you think?" i waited for the students’ response. “what can we do, ma’am?” asked ayu "we must redesign our life’s goal and focus all the efforts for worshipping, ma’am." siti answered. "yes, that's right, set the afterlife as our gol in life and all we do must lead to the afterlife. innamal a'malu bin-niyat, “indeed all actions are based on the intention”. intend your study for worship, work for worship. so it is no longer secular, wordly affairs are mingled with the afterlife affairs.. the world is a place to find provisions for the afterlife, so don't jus spend 4 hours for the hereafter. the world is not a place for traveling, just to have fun, nor a place to get wealth. all students agreed that life should lead to the afterlife happiness.. the hijrah process does not stop here. as discussed earlier, secularism is also found in other subjects such as religion and conventional accounting courses. "well, if in islamic accounting we can discuss about allah, about blessings, about worship, why can’t we do that in conventional accounting courses? have you ever discussed the bless of profit in conventional accounting courses?" some students laughed, and some answered, "absolutely no, ma'am." "yes, i can not agree anymore with you that there is no discussion about the bless of profit except a discussion about profit maximization. you have learnt how to maximize profit. how could it happen? do you think there’s no place for god in conventional accounting? do you think that it happens because it has to? when you study islamic accounting, islamic economics, religion you are aware that god is there. what do you think about god when you study introduction to accounting 1 and 2? do you think that god is also there? " the student just kept silent. "who created the knowledge?" i asked. "allah." replied the student. "well, accounting is also part of science, who created accounting science?" i asked. "allah." replied the student. "then why, in conventional accounting, ia-1 and ia-2 it feels strange or even taboo when discussing god, and bless in the profit?" a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 53 "the lecturer never discusses about allah, ma’am," said budi. "there is one lecturer who is associated with religion, mr. anwar. if he teach early, it was connected with islam," continued ayu. "alhamdulillah. so, what do we have to change so as not to be secular in education anymore?" i tried to provoke the students. "the education has to change," said budi. cheers and applause filled the room. i smiled happily and gave two thumbs up to budi. the current education system that secularizes religion from science makes students also secular. science, or in this case conventional accounting relies on rationalism (true by definition) and empiricism (observable), which is different from religious science which is not all rationalized. changes in the education system as conveyed by al-faruqi which is adapted by suyuthi (2012), that the biggest task of a muslim is "solving education problems". so, he declared "there will be no hope of a true revival of the muslims unless the education system is changed and mistakes are corrected ... dualism in the world of muslim education, dualism in the form of islamic and secular education system must be stopped and eliminated. both systems must be united and integrated." critical-islamic thinking "why is going to mecca so important? why is mecca so special? "reda asked his father. "we've come this far and now you're just interested in asking? mecca is the main holy city for muslims. people come from all over the world. it is the legacy of prophet ibrahim as." his father approached reda, and continued "hajj is important. it is the fifth pillar of islam. all capable muslims must carry it out before they die to purify their souls. we all will die later. we are only guests in this world. the only thing i fear is to die before carrying out hajj. and without you, i will never succeed. may allah bless you. i learned a lot from this trip." "so do i." reda replied while smiling. the question raised by reda to his father began to raise his awareness, or his interest in islam. citing freire's statement through the writings of kamayanti and rahmanti (2014), that in order for the colonized to understand that they are being colonized, an effort must be made to change naive consciousness into critical awareness. in this case the colonized are students in the reality of their accounting knowledge, who unconsciously have imprisoned the mindset of students. it is through this critical islamic thinking that will be used to free the islamic consciousness of students over capitalism that encompasses its reality, which is enveloped in a materialistic, selfish, and utilitarian way. the above discussion has proven that islamic accounting students have realized the existence of materialistic, selfish and utilitarian values in themselves. to free them, i used videos and "suburban cases", and asked them to analyze the accounting and the values carried in it. figure 1. suburban cas a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 54 based on the suburban case above, students were asked question regarding what banawir got from selling herbs. students are given 5 minutes to read and answer. "do you notice the accounting practice in what mr banawir does?" i asked the students. they try to digest, and answer. some said "yes", and some said "no". students who answered "yes" were based on the fact that mr banawir is selling herbs. that is an accounting practice.." that the man selling herbal medicine is an accounting practice. how does he get the capital? from nature; it is provided by the nature. then the herbs is sold. that's accounting practice.” after talking about accounting in the suburban case, i asked my students to mention what profit or obtained by mr. banawir, alhamdulillah, that all their answers were what i wanted from them: blessings, rewards, helping others, feeling happy, grateful". "is that the only profit that mr. banawir got? are you sure you?" i asked the student. they thought hard to answer. "you forget one important thing, but i'm glad if you forgot this important thing. what is that?” they were still confused looking for the answer. "you forget mentioning money as one of the profits he got, alhamdulillah." after i said that the whole class was thundering, aware of their shortcomings, about money, which usually always sticks in their minds, but this time they can forget about it. "wow, you successfully made us forget about money. hurray we were not capitalist." budi shouted excitedly at me, and was followed by his friends. after i gave the case, then i showed them a video. the video tells about a man who, although he is not a rich person, is very concerned about his surroundings. he often gives money to needy children until they could go to school, help grandmothers push carts and sell, distribute food to a starving dog, and water flowers that almost died on the side of the road. he does not want to be rich, but he is "rich" with the love he gives to the surrounding environment. the student's job is to observe the main character and what values are captured from the video. today's meeting was closed with a task next week to look for accounting practice and its value in students’ daily life. here are some of the results: story telling #1 was from sonia: on october, 3th i was returning home from college when i saw a cat was in pain near my boarding house., i came closer to the cat, and i saw a bleeding wound in its body. i was panicked and knew nothing about what i should do. i was so sorry seeing the weak and helpless cat. i immediately called my friend to accompany me to take the cat to the veterinarian. arriving at the house of pet the doctor immediately handled it and the doctor said this cat had to be operated because the nipples were scratched and there was a maggot on the nipples. i asked the vet to do his best to save the cat. i spent idr 810,000 of mysocial gathering money to take care of the cat. actually, i wanted to use the money to buy daily needs, but by being able to help the cat i was happy. value added: i felt so happy because i could see that the cat was healed. that is the added value that i got. i felt satisfied. a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 55 based on the two stories about above, there are several values that can be seen. first, the material value, namely the expenditure that sonia spent to treat the cat, and that hadi spent to be given to an old beggar and to buy a jacket. second, the value of altruism shown by the two students. they are more concerned with the interests of other creatures rather than their own interests. third, the value of love. fourth, the spiritual value of inner satisfaction by giving help treat sick cats and an lob woman. for hadi, he was also because he could get a jacket at a cheaper price. conclusion the dialogical approach raises a lot of student awareness. divine or spiritual awareness arises when discussing the presence of god in conventional accounting courses and religious science courses. awareness of emotional values and spiritual values has also been produced. that accounting is not only about how to record journals, financial statements reporting and provide them as information for stakeholders, but more deeply, in every accounting reality there is a value that follows it, not only material value, but also non-material. emotional values such as love for fellow creatures of god, the value of altruism that leaves self, and the spiritual value of gratitude and inner satisfaction have given grace to all nature. even so, the limitations of this research lie in the inability to capture the results of research which are the results of the dedication of students are carried on permanently by students and so on. it cannot be sure that this glorification will be permanent in the mindset of students, but it can be sure that the process of this dedication is real. this kind of process can be carried out on all types of courses, not limited to sharia accounting only. dialogic approach in learning will be very good if it is done on conventional accounting courses, as a preventive step against secularism and capitalism. story telling #2 by hadi (directly presented before the class): "last saturday i was on my way to buy a jacket, when i saw an old female beggar sleeping on a used rice sack. " i felt sorry seeing that beggar as she reminded of my grandmother at home. i could not imagine if it happened to my grandma. i then decided to give my money to her. not though,, but hopefully it could be a help. " "where does it take placeis that?" i asked. "near the city station, ma’am. well, after that i went to a shop. i saw a jacket that i liked. however, when i looked at the price tag, my money was not enough, to buy that jacket, because i have given some of it to the beggar. so i decided to go back to the boarding house to take some more money. on my way home i stopped by to another shop to look at some jackets there. lucky me! there was a jacket that was exactly the same as the one i wanted, and this jacket was also at a discounted price, ma’am. finally i bought it and now i am wearing it”. i saw a happy look on his face. "cieeeee," his friends said, and followed by hand claps from them. "okay, what did you get from your story?" i asked hadi "i'm happy, mom, because i can help the old female beggar. i imagine what if she were my grandmother or my mother. so without consideration, i immediately gave my money to her. " "alhamdulillah. do you still get the change? "i asked "hehehe, yes ma'am. there's still a change. " "well, it means that yesterdayyou got a reward from allah, insyaallah and got a discounted jacket " i concluded, and agreed with hadi. a.f.k, sari, rahmawati, h, al-rasyid /journal of accounting and business education, 4 (1), september 2019 56 references ahmad, n. l., & ahmed, h. (2017). the acceptability and impact of sharia foundation of islamic ethics in accounting education. international journal of academic research in business and social sciences, 7(2), 494–506. armenic, j., & craig, r. (2009). understanding accounting through conceptual metaphor: accounting is an instrument?". critical perspectives on accounting, 20, 875–883. creswell, j. 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(2015b). filosofi tauhid: mendekonstruksi pendidikan akuntansi syariah yang sekuler. workshop nasional kurikulum akuntansi syariah, 1–20. i.arisanti/journal of accounting and business education, 3 (2), march 2019 151 analysis on earnings persistence, independent commissioner and herding behavior on earnings quality ike arisanti accounting department, faculty of economic, universitas muhammadiyah malang, indonesia email: ikearisanti@umm.ac.id doi: http://dx.doi.org/10.26675/jabe.v3i2.6846 abstract: this study aims at determining the effect of independent commissioners, earnings persistence, and herding behavior on earnings quality. this study employs a multiple linear regression analysis with spss as the statistical tool.before conducting the hypothesis test, a classical assumption test is conducted first, determining whether the data have met the classical assumptions and may be applied to the regression model. there are four components used in the classical assumption test, namely normality test, multicollinearity test, heteroscedasticity test, and autocorrelation test. this study takes 80 qualified manufacturing companies listed with the indonesia stock exchange in 2017 as the object with a purposive sampling technique. the earnings quality variable is measured using erc, the herding behavior is measured using cross sectional absolute deviation (csad), the independent commissioners are measured by comparing the number of independent commissioners with overall commissioners in the companies, and the earnings persistence is measured by comparing current earnings with past earnings. the results of this study partially show that earnings persistence variable, independent commissioners and herding behavior do not influence the quality of earnings. keywords: earnings persistence; independent commissioner; herding behavior; earnings quality introduction financial statement is one medium of communication which may be used by both corporate internal and external parties to examine a company’s condition. financial statement may be used as the basis of making some decisions, such as assessing management’s performance, determining compensation for management’s, dividend policy, etc. earnings are information existing in financial statement. information of corporate earnings is quite important since it may be used to assess a performance, predict future earnings and predict investment risks or credit risks, kirschenheiter and melumad in marisatushokha and budiono (2015). the importance of earnings information is expressly stated in the statement of financial accounting concept (sfac) no. 2 that earnings information is the main element in financial statement and very important for they who use it since it has a predictive value (fasb, 1980; boediono, 2005; marisatusholekha and budiono, 2015). earnings a company successfully attains are one measure of performance and taken into account by investors or creditors in investment or providing additional credit decision making (riyatno, 2007). journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v3i2.6846 i.arisanti/journal of accounting and business education, 3 (2), march 2019 152 according to the agency theory, separation between corporate ownership and management may cause conflict. such conflict, referred to as agency conflict, is caused by the concerned parties, the principal (one who grants contract or shareholders) and the agent (one who receives contract and manage principal’s fund), who have conflicting interests, rachmawati and triatmoko in marisatushokha and budiono (2015). with such conflict of interest, that there is moral hazardor fraud made by the management to report earnings inappropriate to corporate real condition cannot be denied. this may influence the quality of earnings reported by the company. earnings quality is influenced by board of commissioners’ supervision of what executives or directors do (farida, 2012). the role of board of commissioners in creating good corporate governancein company is expected to go up with the existence of independent commissioner to oversee the company, (rosdini, 2010). board of independent commissioners is a party unaffiliated to majority shareholder, members of directors and or other members of board of commissioners (farida, 2010). according to the results of research conducted by farida (2012), board of independent commissioners positively influences earnings quality. meanwhile, according to the results of researches conducted by rupilu (2012), christiantie & christiawan (2013), rosdini (2010) and putri and fitriasari (2017), board of independent commissioners does not influence earnings quality. earnings persistence is company’s ability to maintain its earnings from year to year. penman and zhang (2002) in fanani (2010) define earnings persistence as revision in accounting expected future earnings caused by current earnings innovation. earnings persistence reflects corporate earnings quality and shows that a company may maintain its earnings from time to time (susanto, 2012). the results of research conducted by mulyani, asyik, & andayani (2007) show that earnings persistence significantly influences earnings response coefficient(erc), while the research conducted by putri and fitriasari (2017) shows that earnings persistence does not influence erc. the quality of earnings in the financial statements will be very useful for the capital market because it will make investors measure the value of a company as a basis for investing (jonathan & machdar, 2018). the background of this research is the inconsistency of previous researches’ results, in which many previous researches show different research results and objects. besides, the author is interested in adding herding behavior variable since no research has added herding behavior variable to earnings quality, and thus to study the influence of independent commissioner, earnings persistence and herding behavior on the earnings quality of manufacturing companies registered with the indonesia stock exchange in 2017. the novelty of this research is the addition of herding behavior variable, in which the researcher adds corporate external factors related to investor’s behavior in examining how they influence earnings quality. this research takes the manufacturing companies registered with the indonesia stock exchange as objects since they consist of various sectors and represent most of companies in indonesia. based on the background above, the purpose of this research is to examine the influence of independent commissioner, earnings persistence, and herding behavior on the earnings quality of manufacturing companies registered with the indonesia stock exchange in 2017. this research presents theoretical benefit of addition to reference and science, particularly in the field of accounting. for practical benefit, this research may serve as reference in decision making related to independent commissioner and earnings persistence. literature review and hypotheses agency theory the agency theory discusses the relationship between principal and agent, in which principal means shareholders and agent means management. according to indrawati & yulianti (2010), the agency theory’s view that there is separation between agent and principal which may result in potential conflict may influence the earnings quality reported. the reason of management and ownership functions separation is that principal has limited capability in managing company which may lead to information asymmetry. according to priantinah, in putri and ftiriasari (2017), agent knows corporate future internal information better than principal. this may cause conflict of interest between both parties. there is a i.arisanti/journal of accounting and business education, 3 (2), march 2019 153 possibility that management does not work in representing principal’s interest and prioritizes their own interest by maximizing their subjective utilities (rahmawati, 2005). efficient market hypothesis according to fama (1970), efficient market hypothesis (emh) is reasoning that stock price has reflected all available information. emh consists of three versions classified by definition of the availability of information which may be obtained by investors, which are weak, semistrong, and strong. the efficient market theory states that market will immediately react to new information. based on the efficient market hypothesis, the price of a security reflects all information related to a company, including its future financial performance and future prospect. the weak version states that stock price has reflected all existing information in the market as reflected in the prices of current securities and return. this first type efficiency satisfies the random walk hypothesis since price moves randomly without relevance. the semistrong version states that all existing public data related to company’s prospect should have been reflected in market price. the concerned data are, for example, stock splits announcement, corporate financial statement, stock issue, etc. therefore, if all investors can easily obtain this information, they will be directly reflected in market price. the strong version states that all information from investors or group (for example: mutual funds management) with access to information, both public and private, has been reflected in market price (fama, 1970). independent commissioner and earnings quality the composition of the independent commissioners in the securities exchange regulations, item 1-a of the securities listing regulation no. 1-a pt bursa efek jakarta (now the indonesia stock exchange) concerning general provisions for the listing of equity-type securities at the exchange regulates the ratio of independent commissioners. in this item it is stated that the number of independent commissioners must be proportional to the number of shares held by parties who are not controlling shareholders, provided that the number of independent commissioners is at least 30% (thirty percent) of the total number of commissioners(nasution, nazar, & aminah, 2018). independent commissioner means commissioner other than member of management, majority shareholder, official or otherwise directly or indirectly related to majority shareholder of a company which oversees the company’s management (surya & yustiavandana, 2008). independent commissioner’s task is to serve a supervisory function, so that board of commissioners will more objectively exercise its tasks. through the role of the board in carrying out the supervisory function of the company's operations by the management, the composition of the board of commissioners can make an effective contribution to the results of the quality report preparation process or the possibility of avoiding fraud financial statements (budianto & samrotun, 2018). khancel in khafid (2012) sates that independent commissioner monitors management more effectively, thus independent commissioner will oversee company’s management in achieving company’s purpose of gaining persistent earnings. mashayekhi and bazaz in nurochman and sholikhah (2015) state that an increasing number of independent commissioners will influence corporate earnings quality in terms of earnings persistence. the research conducted by febiani (2012) concludes that independent commissioner significantly influences erc coefficient, in which the possibility of financial statement fraud will decrease with financial statement supervision, thus it limits the extent of corporate earning management. this shows that the existence of independent commissioner in a company may influence corporate earnings quality. h1 : independent commissioner influences earnings quality earnings persistence and earnings quality according to kormendi and lipe; easton and zmijweski (1989) as quoted by mulyani, asyik & andayani (2007), earnings persistence is positively related to earnings responsecoefficient. this means that the more permanent the change of earnings from time to time, the higher the earnings coefficient is, i.arisanti/journal of accounting and business education, 3 (2), march 2019 154 since this condition shows that corporate earnings keeps increasing. company which may retain earnings will increase market response. this market response shows that earnings information reported by company has quality. published earnings generate various responses, showing the existence of market reaction to earnings information (cho and jung, 1991 in putri and fitrisari 2017). market reaction to published earnings will depend on investor’s assessment (perception) of the quality of earnings nominal a company generates and publishes. earnings response coefficients(erc) is believed to give a clear idea of earnings quality by viewing market reaction to the published earnings information. market reaction reflects the quality of corporate published earnings and the value of earnings response coefficients(erc) is greatly determined by the responsive power reflected in information contained in earnings (suaryana, 2005). this means that the stronger the market response to earnings information reflected in the high value of earnings response coefficients (erc) shows the higher the quality of published earnings and vice versa. the higher the profit persistence of a company, the higher the response of investors to invest their funds in the company. the higher investor response reflected in the high erc reflects increasingly quality earnings. the higher the profit persistence, the higher the quality of earnings(ardianti, 2018) fauziah ( 2017)persistent profit will have a positive effect on earnings quality . investors assume that when company has persistent earnings from time to time, they may expect for higher future earnings. this will be well responded by the market, as reflected with high erc value, indicating quality earnings. theoretically, therefore, persistent earnings influences corporate earnings quality (kormendi and lipe, 1990, in putri and fitriasari, 2017) h2 : earnings persistence influences earnings quality herding behavior and earnings quality according to muema (2014), herding is investor’s behavior in following other investor’s action and following other investor’s decision. market makers trade in the same direction and at the same time and form correlated behaviors between one investor to another. asri (2015) is of the opinion that the herding theory describes situation in which people do together something that many other people do. in the signaling theory, arising positive signal will stimulate investors’ reaction to buy stock. according to bikhchandani and sharma (2001), when an investor has limited information, the investor will follow other investor’s move in making investment decision. he will eventually leave his signal and follow majority investors’ decision (herding behavior). the efficient market theory states that market will react to any new information. based on efficient market hypothesis, the price of a stock security reflects all information related to company, including current financial performance and its future prospect. company that discloses positive earnings will be responded as positive information by some investors and such information will be utilized by investors with limited information to do herding behavior. this investor’s response shows that earnings information the company reports has the quality. h3 : herding behavior influences earnings quality methods this quantitative research employs secondary data derived from www.idx.co.id in the form of 2017 financial statement and from yahoo finance in the form of stock price and idx composite. in conformance to the disclosed title, there are 3 variables in this research. this research’s dependent variable is earnings quality, while its independent variables are independent commissioner, earnings persistence and herding behavior. http://www.idx.co.id/ i.arisanti/journal of accounting and business education, 3 (2), march 2019 155 population, samples, and sampling technique the population of this research is manufacturing companies registered with the indonesia stock exchange in 2017. this research employs non-probability purposive sampling based on the criteria presented in table 1 below: table 1. sampling criteria criteria quantity manufacturing companies registered with the indonesia stock exchange in 2017 153 manufacturing companies with abnormal positive return during observation period 80 unaudited financial statement 0 total samples during research period 80 source: processed data, 2018 variables’ operational definition independent commissioner independent commissioner is, according to christiantie and christiawan (2013), measured using the formula: ki = number of members of board of commissioners from external party all members of company’s board of commissioners earnings persistence earnings persistence is measured in regression slope on the difference between current earnings and previous earnings (mulyani, asyik & andayani, 2007) with formula: xit = α + βxit-1 + εt where: α = constant xit = company i’s earnings year t xit-1 = company i’s earnings year t-1 β = regression coefficient (earnings persistence) εt = error component in model herding behavior the csad (cross sectional absolute deviation) method developed by chang, cheng, dan khorana in 2000 is employed for the herding behavior variable. below are measures used in detection of herding behavior: a. calculate stock daily return from the first day to the 5th day after publication of financial statement. b. calculate the csadt of stock daily return for each of company’s stock and calculate the extent of market return. in this research, the csadt is calculated using the formula below: csadt = 1 𝑁 ∑ |𝑁𝑖=1 ri,t – rm,t| where: csadt : cross sectional absolute deviation ri,t : return of individual stock in period t rm,t : market return in period t n : number of sample companies c. explore the value data of csadt, marketreturn, and stock return using descriptive statistics. stock return is calculated using the formula below: stock return : = ( pt –pt-1) / pt where: stock return : initial return pt : stock price on the first day after ipo. i.arisanti/journal of accounting and business education, 3 (2), march 2019 156 pt-1 : stock price during ipo. d. perform regression of the data of csadt with market return at α = 0.05%. the formula below is used: csadt : α + γ1 | rm,t | + γ2 rm,t 2 + ɛt where: α: intersect variable γ1 : linear coefficient between csad and market return portfolio γ2 : non-linear coefficient between csad and market return portfolio (herding) rm,t : market return in period t ɛt : standard error earnings quality this research employs a market adjusted model. the phases of erc calculation are, according to andreas(2012), as follows: a. abnormal return arit = rit-rmit where: arit = stock abnormal return i in period t rit = stock return i period t rmit = market return i in period t b. stock return rit = (pit – pit-1) pit-1 where: rit = stock return i in period t pit = stock closing price i in period t pit-1 = stock closing price i in period t c. market return rmit = (ihsgit – ihsgit-1) ihsgit-1 where: rmit = market return i in period t ihsgit = idx composite in period t ihsgit-1 = idx composite period t-1 d. cumulative abnormal return carit = ∑arit where: carit = cumulative abnormal return of stock of company i several days before and several days after date of annual earnings publication. arit = abnormal return of stock i during window period the calculation of abnormal return and cumulative abnormal return in this research employs window period of eleven days, which is five days after (t+5) publication of financial statement pursuant to research conducted by delvira & nelvrita (2013). e. unexpected earnings ueit = (epsit – epsit-1) epsit-1 where: ueit = unexpected earnings of company i in period t epsit = earnings per share of company i in period t epsit-1 = earnings per share of company i in period t-1 i.arisanti/journal of accounting and business education, 3 (2), march 2019 157 f. earnings response coefficient (erc) car = β0 + β1ueit+e where: car = cumulative abnormal return of stock of company i several days before and several days after date of annual earnings publication. ueit = unexpected earnings of company i in period t β0 = constant β1 = earnings response coefficient (erc) e = error term hypothetical test this research employs a multiple linear regression model. the multiple linear regression equation in this research is as follows: ku_la = α + β1ki + β2pl + β3hdg+ ε where: ku_la = earnings quality α = constant β1β2 = regression coefficient ki = independent commissioner pl = earnings persistence hdg = herding behavior ε = error results the partial test on the independent commissioner variable table results in significance value of 0.722. the criteria for t statistical test determine a significance value 0.722 > 0.05, thus h1 is rejected or, in other words, independent commissioner does not significantly influence earnings quality. this research conforms to the research conducted by marisatussholekha and budiono (2013) that investor’s response to earnings quality is not determined by the number of independent commissioners in company. the partial test on the earnings persistence table results in significance value of 0.224. the criteria for statistical test determine a significance value 0.224 > 0.05, thus h2 is rejected or, in other words, earnings persistence does not significantly influence earnings quality. the partial test on the herding behavior table results in significance value of 0.339. the criteria for statistical test determine a significance value 0.339 > 0.05, thus h3 is rejected or, in other words, herding behavior does not significantly influence earnings quality. the conclusion of the hypothesis testing can be desrcibed below: table 2. t test or partial test variable t (sig) conclusion ki 0.013 (0.722) h1 is rejected pl -0.216 (0.224) h2 is rejected hdg -0.013 (0.339) h3 is rejected discussion the results of this research conform to the research conducted by rosdini (2010), that the reason independent commissioner does not influence earnings quality is that company with high proportion of independent commissioners tend to have low erc value. this is shown with the low erc value of companies with high number of independent commissioners, which means that investors do not consider the number of independent commissioners as their basis of investment decision. the reason independent i.arisanti/journal of accounting and business education, 3 (2), march 2019 158 commissioner variable does not influence earnings quality is likely independent commissioner’s minimum contribution to and capability in the effort to drive and create more objective climate and put fairness as the main principle in considering minority shareholders’ and other stakeholders’ interests. one measure or proxy for measuring earnings quality can be used earnings response coefficient (erc). the strong market reaction to earnings information reflected in the erc value will show that reported earnings are of high quality. earnings response coefficient (hereinafter written with erc) can be defined as the effect of one currency unit of expected profits on stock returns and describes the reaction of investors to the announcement of profit or loss. erc shows the strength of the weak market reaction to earnings announcements, so that it can be used to predict the content in earnings information. if investors have a perception that financial information has high credibility, then he will react strongly to these financial statements(kusumawati & wardhani, 2018). this research conforms to the research conducted by imroatussolihah (2013), that earnings persistence does not influence erc since investors, in making investment, do not consider company’s positive earnings persistence, but view and assess company from other factors which may influences its information.this research also conforms to the research conducted by putri and fitriasari (2017), that the reason earnings persistence does not influence earnings quality is that some companies in this research have their earnings declining in the year of observation but have high earnings persistence value. this causes bias in the research, thus earnings persistence value lack accuracy in describing earnings quality. companies with high earnings persistence value tend to have low earnings quality (erc). ali and zarowin in marisya and fitrisari (2017) state that the reason earnings persistence does not influence erc is that the existence of transitory components. the high extent of transitory components in earnings results in too low erc value, since earnings which contain high transitory value cannot be used in erc measurement.declining persistence of earnings also indicates the existence of a transitory component in profit which is a component that only affects a certain period, the occurrence is not persistent or not continuous, and results in a number of profit (loss) reported in the income statement fluctuating. the existence of a transitory component in profit causes earnings to be less permanent or profits have a persistent low(nuraeni, mulyati, & putri, 2018). according to afni (2014), a company sometimes has high earnings but they decline in the following year, showing that there is no earnings persistence, making the company less persistent. generally, such earnings receive investors’ low response for showing no earnings quality. this shows that investors do not only take earnings persistence as one indicator in their investment decision, but company’s less informative earnings result in investors’ less reactive to earnings publication. according to kremer and nautz (2012), herding behavior occurs when the market lacks transparency, which is when investors face uncertain source of public information and receive unclear signal of company’s future. according to bikhchandani and sharma (2001), when an investor has limited information, he will follow other investors’ move in making investment decision. he will eventually ignore his signal and follow majority investors’ decision (herding behavior). investor do, in making investment, not only view company’s earnings, but also view other investors’ behavior because of their limited information. with regard to erc, investors do not always respond to earnings as something positive, but they conduct investment analysis based on certain momentum or their own psychology, thus earnings are not the only criteria investors refer to for investment. conclusion this research concludes that independent commissioner does not significantly influence earnings quality. this research conforms to the research conducted by marisatussholekha and budiono (2013), that investors’ response to earnings quality is not determined by the number of existing independent commissioners in a company. earnings persistence does not significantly influence earnings quality. this research conforms to the research conducted by imroatussolihah (2013), that earnings persistence does not influence erc. herding behavior does not significantly influence earnings quality. this research is expected to be useful for many parties, particularly those with interest in company that utilize financial i.arisanti/journal of accounting and business education, 3 (2), march 2019 159 information in their decision making. this research is expected to be used by financial statement users, particularly earnings information with regard to agency, investor’s behavior and company management issues which will then influence earnings quality. this research’s limitation 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(2008). penerapan good corporate governance mengesampingkanhak-hak istimewa demi kelangsungan usaha. jakarta: kencana. i.arisanti/journal of accounting and business education, 3 (2), march 2019 161 n. susilowati, kardiyem, l. latifah/journal of accounting and business education, 4 (2), march 2020 58 the mediating role of attitude toward money on students’ financial literacy and financial behavior nurdian susilowati 1 kardiyem 2 lyna latifah 3 1,2,3 economics education, state university of semarang, indonesia email: nurdiansusilowati@mail.unnes.ac.id doi: http://dx.doi.org/10.26675/jabe.v4i2.6622 abstract: this research aims at discovering the direct influence of financial literacy on financial behavior; finding out the indirect influence of financial literacy on financial behavior through attitude toward money; and figuring out the direct influence of attitude toward money on financial behavior. this research was conducted at economics faculty of state university of semarang or unnes with its sample being students who had taken budgeting and financial management courses. the sample was taken using proportionate random sampling and 230 respondents were obtained. the data were collected using questionnaire and they were then analyzed using descriptive analysis and path analysis. based on the first research result, it was found that financial literacy had direct influence on financial behavior. high financial literacy determined a good financial behavior in the future. secondly, attitude toward money successfully mediated the influence of financial literacy on students’ financial behavior. thirdly, attitude toward money has a direct influence on financial behavior. in general, students have good financial literacy, attitude towards money, and financial behavior. this allowed them to have a clear priority for their future.. keywords: financial behavior, financial literacy, attitude toward money, students introduction most students begin to intensively manage their personal finance without their parent’s monitoring once they are enrolled to universities. most of them begin to get themselves familiarized with finance and monetary matters such as paying bills, budgeting, saving, or owning credit card on their own behalf. currently, students have been a main customer segment for financial products and other financial services. yet, they still cannot use the products and services optimally since they still have relatively poor financial behavior. in regard to financial behavior, today’s students are more likely to spend money, rather than wisely managing their money which includes such activities as planning to invest for the future. additionally, consumptive behaviors such as spending money for clothes, shoes, facial treatment, and for other fashion accessories seems to be commonly practiced. therefore, there is a need for them to understand what a good financial behavior is. financial behavior is a behavior related to the application of finance. behavioral finance is a discipline in which various disciplines interact and integrate continuously, making its discussion no longer done isolatedly. elif akben-selcuk (2015) suggests that the aspects of students’ financial behavior can be seen journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ n. susilowati, kardiyem, l. latifah/journal of accounting and business education, 4 (2), march 2020 59 from their punctuality in paying bills, personal budgeting, and their savings for future. geographical and cultural conditions can also play a role in shaping this financial behavior. the issuance of financial products offered by banks and other financial institutions can also shape students’ financial behavior. additionally, financial knowledge (or financial literacy) they learned at their campus can also shape their financial behavior. shim, xiao, barber, & lyons (2009) suggest that students’ financial behavior is acquired from their learning on finance when studying at universities for years which is more likely to influence their decision making in the future. lyons investigates the practice of credit card use with 835 students as his sample and finds that sex, ethnicity, financial independence, total amount of debts and credit card influence financial behavior risks. in short, many factors can influence students’ financial behavior (xiao, tang, & shim, 2008). the first among these factors is financial literacy, i.e. an individual’s ability to make decisions in personal financial management. financial literacy constitutes the knowledge on relevant behavior in managing money to measure knowledge on income, money management, savings and investment, spending, and credit (mandell, 2009; xiao, 2014). the international financial literacy surveys explains that financial literacy can be measured using financial management in general, savings and loans, investment, and insurance (jorgensen & savla, 2010; mandell, 2009). elif akben-selcuk (2015) states that the aspects of students’ financial behavior can be seen from their punctuality in paying bills, personal budgeting, and savings for their future. geographical and cultural conditions can also play a role in shaping this financial behavior. sabri, macdonald, hira, and masud (2010) find that financial literacy level influences saving behavior and negatively correlates with financial problems among students. the financial literacy studied at universities can shape financial behavior (shim, xiao, barber, & lyons: 2009). additionally, there is an indirect influence of financial literacy on financial behavior. the mediation is made by attitude toward behavior. anz & ac nielsen (2005) find that long-term financial care and financial focus also influence one’s financial ability development. the second factor is attitude toward money. tang (1995) argues that attitude toward money can be measured using money ethic scale with 3 attitude components as seen from the affect (money is the root of all evil), cognitive (money is a symbol of success), and behavioral (i manage my money very well) aspects. mendes-da-silva (2016) find that financial attitude leads to financial behavior. high financial literacy will influence financial behavior and students with positive financial will end up having positive financial behavior. ajzen (2005) explains that knowledge can influence attitude. attitude can influence behavior through psychological factors such as self confidence/esteem, belief to change, and belief to prosperity. this means there is a direct and indirect influence between these three variables on behavior. additionally, financial literacy influences financial attitude. elif akben-selcuk (2015) suggests that attitude toward money is the variable which influences students’ financial behavior. students with positive attitude toward money can report punctual monthly bill payment, make personal budget and determine savings for the future. based on the explanation above, this research will investigate; 1) the direct influence of financial literacy on students’ financial behavior; (2) the indirect influence of financial literacy on financial behavior through students’ attitude toward money; (3) the direct influence of attitude toward money on financial behavior. the difference this research has from the previous studies is its use of attitude toward money variable as an intervening variable. in the previous studies, attitude toward money serves as an independent variable which influences financial behaviour (mendes-da-silva, 2016). according to the planned behavior theory, attitude can shape an individual’s behavior both directly and indirectly. likewise, only the direct influence of financial literacy variable in the previous studies is tested. meanwhile, in this research both its direct and indirect influences are tested. the financial literacy variable in this research refers to the finding of hancock et al (2012), i.e. money management in general, saving and loans, investment, and insurance. n. susilowati, kardiyem, l. latifah/journal of accounting and business education, 4 (2), march 2020 60 literature review and hypotheses planned behavior theory is a further development of theory of reasoned action which uses the basic assumption that humans behave consciously and consider any available information. ajzen (2005) adds a construct which has not been in the theory of reasoned action, namely perceived behavioral control. this construct is added in an attempt to grasp the limits that individuals have in order to perform certain behaviors. in other words, whether or not a behavior is practiced is not determined merely by attitude and subjective norms, rather it is also determined by individual perceived control of what they can do which comes from their belief of that control (control beliefs). in more detail, ajzen (2005:133) adds individual’s background factors into the planned behavior theory, thus it is schematically depicted as in the figure below. based on the theoretical model from theory of planned behavior, it is explained that background factors (such as age, sex, race, socio-economic status, mood, personality trait, and knowledge) influence individual’s attitude and behavior towards something. behavioral belief is what an individual believes regarding a behavior from both positive and negative sides, attitude towards behavior or tendency to affectly react to a behavior, in the form of like or dislike to that behavior. the normative beliefs directly and expressly related to environmental influence are suggested by lewin in field theory. subjective norm is defined as to what extent a person is motivated to follow people’s view on the behavior to be practiced (normative belief). when an individual think it is his personal right to decide on what he does, and it should not be decided by others around him, then he will ignore others’ view on the behavior he is about to practice. the belief that a behavior can be practiced (control beliefs) is obtained from many things. the first one is the experience of previously practicing the same behavior or the experience acquired from seeing others (for example friends, close relatives) practicing the behavior which leads him to believing that he will also be able to practice it. the second one is the individual’s belief that a behavior will be practicable is also determined by the availability of time and facilities to practice that behavior, and ability to deal with each difficulty which may hinder the practice of that behavior. perceived behavioral control is the belief that an individual has or has never practiced a certain behavior, the individual has the facilities and time to practice that behavior, then the individual estimates their ability whether or not they have what it takes to practice that behavior. intention to practice the behavior is one’s inclination to choose to do or not do a work. background factors: personal general attitudes, personality traits, values, emotions, intelligence social age, gender, race, ethnicity, education, income, religion normative beliefs subjective norms behavioral beliefs attitude toward the behavior control beliefs perceived behavior control intention behavior figure 1. theory of planned behavior (ajzen, 2005) n. susilowati, kardiyem, l. latifah/journal of accounting and business education, 4 (2), march 2020 61 there is a direct influence of financial literacy on students’ financial behavior a number of studies show that financial literacy has a positive correlation with financial behavior. hilgert, hogart and beverly (2003) add financial behavior and financial literacy into a questionnaire in the national survey of consumer finances. they make a behavior-based financial practice index into four variables: cash flow management, credit management, saving, and investment behavior, then they compare the indices against financial literacy score and find that those with higher financial literacy level also have higher financial practice index. this indicates a positive relationship between financial behavior and financial literacy despite its unknown causality direction. the causality might be different, in a sense that it is the improvement in financial literacy which causes better or more effective financial behavior and financial decision making or the other way around. elif akben-selcuk (2015) states that the aspects of students’ financial behavior include punctuality in paying bills, personal budgeting, and savings for their future. geographical and cultural conditions can also play a role in shaping this financial behavior. the financial products offered by banks and other financial institutions can also shape students’ financial behavior. research has shown that financial behavior has a positive influence on improved financial welfare. sabri, macdonald, hira, and masud (2010) find that financial literacy level influences saving behavior and negatively correlates with financial problems among students. the financial literacy studied at universities can shape financial behavior (shim, xiao, barber, & lyons, 2009). based on the explanation above the first hypothesis of this research is as follows. h1 : there is a direct influence of financial literacy on students’ financial behavior there is an indirect influence of financial literacy on financial behavior through students’ attitude toward money sabri, macdonald, hira, and masud (2010) find from data obtained from 11 universities in malaysia that financial literacy level influences saving behavior and negatively correlate with financial problems among students. they also find that pre-college financial experience can help shape poor financial habit for students. in a further study, sabri, cook, and gudmundson (2012) find that habit, financial literacy, and financial socialization improve students' financial welfare, including their current financial condition and financial management skills. parent’s financial attitude and beliefs are also found to have significant influence on their children’s financial attitude and beliefs. in socialization particularly, their parents and formal education (universities) influence positively their children’s financial literacy, skills and attitude (lyons et al., 2007; lyons et al. 2006). tang (1995) states that financial attitude consists of money ethic scale using 3 attitude components as seen from the affect (money is the root of all evil), cognitive (money is a symbol of success), and behavioral (i budget my moneyvery well) aspects. furthermore, this financial attitude influences students’ financial behaviour. therefore, the second hypothesis is as follows. h2 : there is an indirect influence of financial literacy on financial behavior through students’ attitude toward money there is a direct influence of attitude toward money on students’ financial behavior mendes-da-silva’s (2016) research finds that financial attitude leads to financial behavior. aydin, elif asli.,& selcuk, akben elif (2019) suggest that students with good attitude towards money are more likely to show a good financial behavior. a good financial behavior will also shape a good welfare level. this is because they can take the logical attitude and thinking in managing their money. the financial management performed by students is the personal one such as managing their pocket money for their needs for a month and for savings. the research result also indicates that students save some money when they have some of their monthly pocket money left. elif akben-selcuk (2015) states that attitude toward money is a variable which influences students’ financial behavior. students with positive attitude toward money can report their punctual monthly bill payment, make personal budget and determine savings for the future. setiyani, r., & solichatun, ipit (2019) suggest that students’ financial attitude influences students’ financial behavior. a good attitude will shape a n. susilowati, kardiyem, l. latifah/journal of accounting and business education, 4 (2), march 2020 62 good behavior and vice versa. therefore, when a student has a good financial attitude, it will then lead to a rational financial behavior. this indicates that attitude positively correlates with financial behavior. h3 : there is a direct influence of attitude toward money on students’ financial behavior methods this is quantitative research. it was conducted at economics faculty of semarang state university (unnes). the population in this research were students at economics faculty who had taken budgeting and financial management courses. the number of sample to be taken in this research was determined using the following slovin formula: note: n : sample size n : population size e : percentage of error tolerance due to a tolerable sampling error. the tolerance percentage used was 5%. from the formula above, 249 students were taken as the sample. furthermore, the sample was taken using proportionate random sampling. the sample was distributed based on the proportion of number of students by major using the following formula (riduan & kuncoro, 2011:57): note: ni : number of sample by stratum n : total number of sample = 249 ni : number of population by stratum n : total number of population = 655 thus, the total number of population and sample of this research was as follows. table 1. research population and sample no study program population sample 1 accounting education s1 186 71 2 accounting s1 237 90 3 management s1 232 88 total 655 249 source: data on students at economics faculty, sikadu (2017) the dependent variable was financial behavior (fb). the independent variable was financial literacy (fl) and the intervening variable was attitude toward money (atm). financial literacy (fl) is an individual’s ability to make decisions in term of managing their personal finance. the indicators of this financial literacy (fl) variable were developed using hancock et al (2012), i.e. money management in general, saving and loans, investment, and insurance. meanwhile attitude toward money (atm) was the disposition to positively or negatively respond to a behavior. the indicators of attitude toward money (atm) variable were developed from tang (1995), namely affect (money is the root of all evil), cognitive (money is a symbol of success), and behavioral (i budget my money very well) aspects. moreover, financial behavior (fb) was a behavior related to the application of financial management. the indicators of financial 2 1 ne n n   n. susilowati, kardiyem, l. latifah/journal of accounting and business education, 4 (2), march 2020 63 behavior (fb) variable were developed from elif akben-selcuk (2015), namely punctuality in paying bills, personal budgeting, and savings for future. the data were collected using questionnaire. this questionnaire was distributed in person to collect the data in this research by the lecturers. the collected data were then analyzed using descriptive analysis and path analysis. descriptive analysis was used to describe or depict the condition of each variable, namely financial literacy (fl), attitude toward money (atm), and financial behavior (fb). meanwhile, path analysis was a statistical analysis method which allows researchers to give a quantitative interpretation for the relationship of a number of variables in a model. this path analysis aims at determining the direct and indirect influences between financial literacy (fl), attitude toward money (atm), and financial behavior (fb) variables. results from the descriptive analysis result, it was found that the mean for fl variable was 45.99 and it was classified as high since it was within 50-61 range. this meant students had a good financial literacy and thus they could decide on money management in general, decide on saving and loans, decide on investment, and insurance they needed for their future. furthermore, the mean for fa variable was 37.26 and this was also high for being within 33-40 range. this meant students had a good financial attitude as could be seen from their ability in responding positively and negatively to financial management such as attitude towards money use for daily needs, attitude toward money as a symbol of success, and attitude towards budget use. finally, the mean for fb variable was 67.35 and it was classified as high. this meant students had a good financial behavior. students could pay their monthly rent bill punctually, made their personal budget, and had savings for their future. from the path analysis result, the direct influences proposed in the problem formulation were 1) influence of financial literacy on financial behavior and 2) influence of attitude toward money on financial behavior. py1 value was the standardized coefficients (beta) value which was obtained from the regression of influence of financial literacy on financial behavior, and the influence of attitude toward money on financial behavior. the beta value used was the financial literacy and attitude toward money beta. below was the table of regression coefficients of the influence of financial literacy and financial attitude on financial behavior. table 2. direct influence of each variable model unstandardized coefficients (b) standardized coefficients (beta) t sig. (constant) 21.137 4.810 .000 fl .455 .385 6.545 .000 atm .447 .234 3.908 .000 a. dependent variable: fb based on this table of regression coefficients, it was found that py1 = 0.385 and py2 = 0.234. based on the values of each coefficient, the direct influence of financial literacy on financial behavior could be calculated as follows: py1 x py1 = 0.385 x 0.385= 0.148. moreover, based on the values of each coefficient, the direct influence of attitude toward money on financial behavior could be counted as follows: py2 x py2 = 0.234 x 0.234 = 0.055. furthermore, there were 3 indirect influences formulated in the problems earlier, including 1) indirect influence of financial literacy on financial behavior through students’ attitude toward money. the result of this regression could be seen in the following table. n. susilowati, kardiyem, l. latifah/journal of accounting and business education, 4 (2), march 2020 64 table 3. indirect influence coefficients a model unstandardized coefficients (b) standardized coefficients (beta) t sig. 1 (constant) 21.137 4.810 .000 fa .447 .234 3.908 .000 based on the table above, this influence could be seen by seeing the parameters p31 and py3 with the standardized coefficient (beta) being 0.213 and 0.234 respectively. based on the values of each coefficient, the indirect influence of financial literacy on financial behavior through students’ attitude toward money could be calculated as follows: p31 x py3 = 0.213 x 0.234= 0.049. in path analysis, there was a term known as total influence. in this case, the total influence was the sum of direct and indirect influences of financial literacy, attitude toward money, and financial behavior variables. below was the sum of total influence based on the data analysis result. the total influence (direct influence of 1 py1 = 0.148 plus indirect influence of 10.049) was equal to 0.197. discussion direct influence of financial literacy on financial behavior based on the research result, there was actually a direct influence of financial literacy on financial behavior. this result confirmed sabri, macdonald, hira, and masud (2010) who found that financial literacy had an influence on students’ saving behavior. the financial literacy in the form of knowledge on financial management in general, knowledge on savings and borrowing, investment, and insurance influenced students’ financial behavior. the higher the knowledge, the more likely for students to have a better financial behavior. individuals could decide, plan, and prepare their finance for their future. predetermined financial planning would facilitate them to take the financial actions and behavior which matched the main priority of that planning. students’ financial literacy was acquired from learning financial management from both parents and courses at university. parents played an important leading role in shaping students’ financial literacy. it was from the family that a child could determine which financial behavior was good or poor. therefore, financial management learned from family and parents became the basis for financial literacy in other situation. additionally, individuals acquired financial literacy from their peers and school. from their socialization intensity, individuals interacted with peers and this could influence the shaping of their behavior. if their peers had a good behavior, then the individual would be a person with a good personality and behavior. furthermore, financial management learned at schools and universities also determined financial behavior. the learning in courses such as financial management and budgeting at schools and universities could be the basis for planning their future. tali te’eni-harari (2016) suggested that subjective and objective knowledges on finance had an influence on behavior in managing personal finance and socio-economic status and financial welfare. this was in line with aydin, elif asli., & selcuk, akben elif (2019) and setiyani, r., & solichatun, ipit (2019) who found that students with high financial literacy score had a good financial attitude. they also showed a good and thus rational financial behavior. this also indicated that attitude positively correlated with financial behavior. shim, xiao, barber, & lyons (2009) found that financial literacy learned during study at universities could shape financial behavior. financial literacy was highly determinant in decision making of an individual who considered the financial risks to be encountered for the decision they made. this financial decision would be useful in the future, thus an individual could minimize the financial risks. sibel dinç aydemir & selim aren (2017) explained that high financial literacy significantly influenced investment intention risk. students with high financial literacy were more realistic in regard to risky n. susilowati, kardiyem, l. latifah/journal of accounting and business education, 4 (2), march 2020 65 investment. this way, they were financially educated and could eradicate the possibility of taking inappropriate and excessive risks. indirect influence of financial literacy on financial behavior through attitude toward money based on the research result, there was indeed an indirect influence of financial literacy on financial behavior through financial attitude. ajzen (2015) in planned behavior theory explained that individual background, in the form of knowledge, influenced their attitude and behavior towards something. these background factors were basically the characteristics existing within oneself, which in kurt lewin’s model was classified into o (organism) aspect. one of these background factors was information in the form of knowledge. financial attitude was an intervening variable which successfully mediated the influence of financial literacy influence on students’ financial behavior. the financial attitude took the form of (1) affect, i.e. money is the root of all evil; (2) cognitive, i.e. money is a symbol of success; (3) behavior, i.e. i budget my money very well. students could positively and negatively responded to an action, thus they could decide on what financial behavior they would follow and practice. this research confirmed mendes-da-silva (2016) who found that financial attitude determined financial behavior. elif akben-selcuk (2015) suggested that attitude toward money was the variable which influenced students’ financial behavior. students with positive attitude toward money could report their monthly bill payment punctually, made personal budget and decided on their saving for their future. therefore, financial planning became the main factor for students to achieve financial welfare in the future. well-planned finance would lead to a systematic and cost-efficient life. thus, their financial behavior would be good. aydin, elif asli.,& selcuk, akben elif (2019) found that students with higher financial literacy level and good attitude towards money were more likely to exhibit desirable financial behavior. it did not just improve the financial literacy level, rather it also improved the individual attitude toward financial issues and were more likely to be engaged in desirable financial behavior such as paying bills punctually and maintaining balanced budget. in addition to its impact on financial literacy and attitude, it also affected money use ethic. students with high score for “budget” dimension were more likely to indicate preferred financial behavior. this meant it was important to recognize the role of money as an important component of financial planning and personal fund allocation. tali te’eni-harari (2016) found that students with high financial literacy would also showed positive attitude towards saving behavior. direct influence of attitude toward money on financial behavior there was a direct influence of attitude toward money on financial behavior. this research confirmed mendes-da-silva (2016) who found that financial attitude led to financial behavior. ajzen (2005) suggested that attitude was a disposition to respond positively or negatively to a behavior. tang (1995) explained that financial attitude was measured using money ethic scale with 3 attitude components as seen from affect (money is the root of all evil), cognitive (money is a symbol of success), and behavioral (i budget my money very well) aspects. students’ financial behavior in the form of paying bills punctually, preparing personal budget, and owning savings for future became the basis for financial behavior in the future. elif akben-selcuk (2015) stated that attitude toward money was a variable which influenced students’ financial behavior. students with positive attitude toward money could report punctual monthly bill payment, made personal budget and decided on the saving for their future. putri, riska ayuni., & asrori (2018) found that students with positive attitude toward moiney could manage their finance well, and students with negative attitude toward money failed to manage their personal finance well. therefore, to achieve high financial literacy there was a need for positive attitude toward money. ajzen (2005) suggested that attitude was a disposition to respond positively or negatively to a behavior. attitude to a behavior was determined by the belief on the consequence of that behavior and this was commonly known as behavioral beliefs. behavioral beliefs connected behavior to the outcome which might be acquired from that behavior. attitude toward behavior was determined by individual evaluation of n. susilowati, kardiyem, l. latifah/journal of accounting and business education, 4 (2), march 2020 66 the outcome related to that behavior and to the power of relationship between those two. generally speaking, the more positive the consequence of a behavior when students evaluated it, the more likely for these students to have favorable attitude to that behavior; and on the contrary, the more negative the evaluation that a student had of that behavior, the more likely for them to show unfavorable attitude toward that behavior. attitude toward behavior was defined as the degree of positive or negative assessment of an individual toward a certain behavior. attitude toward behavior was determined by the combination of behavioral belief and outcome evaluation. behavioral belief was an individual's belief regarding the positive or negative consequence of a certain behavior and outcome evaluation was an individual’s evaluation of the consequence he/she would receive from a behavior. it could then be concluded that individuals who believe that a behavior could produce positive outcome would have positive attitude toward a behavior, and vice versa. conclusion based on the research result, it could be concluded as follows. firstly, the mean values of financial literacy, attitude toward money, and financial behavior variables were relatively high. this meant students had good financial literacy, attitude towards financial management, and financial behavior. for this reason, students had a clear priority for their future. secondly, there was a direct influence of financial literacy on financial behavior. attitude toward money successfully moderated the influence of financial literacy on students’ financial behavior. the total influence of these variables was 19.7%, meaning that there were other variables which could be revealed for further studies. the initial step to improve financial management was by making personal budget to allow the individual to have a good financial planning. in this research, only cognitive and attitude domains were tested and no psychological domain had been studied. it was therefore recommended for further research to investigate psychological domain such as financial belief. financial belief was one’s believe on their own ability to manage their money well. references ajzen, i & fishbein, m. 2005. the influence of attitudes on behavior. 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happiness: financial behavior and life satisfaction of college students. social indicators research, 92, 53-68. http://dx.doi.org/10.1007/s11205 008-9288-6 http://dx.doi.org/10.1111/j.1741-3729.2010.00616.x https://doi.org/10.1111/j.1745-6606.2006.00056.x https://doi.org/10.1111/j.1745-6606.2007.00079.x http://www.jumpstart.org/assets/files/2008surveybook.pdf http://dx.doi.org/10.1108/mrr-06-2014-0143 https://doi.org/10.1108/ijbm-03-2018-0071 http://dx.doi.org/10.1108/20463161211240124 http://dx.doi.org/10.1111/j.1552-3934.2010.00038.x https://doi.org/10.1108/k-10-2016-0281 https://doi.org/10.1016/j.appdev.2009.02.003 https://doi.org/10.1108/yc-01-2016-00579 http://dx.doi.org/10.1016/s0191-8869(95)00133-6 http://dx.doi.org/10.1007/s11205%20008-9288-6 n. susilowati, kardiyem, l. latifah/journal of accounting and business education, 4 (2), march 2020 68 xiao, j. j., ahn, s. y., serido, j., & shim, s. 2014. earlier financial literacy and later financial behaviour of college students. international journal of consumer studies, 38(6), 593-601. http://dx.doi.org/10.1111/ijcs.12122 volpe, r. p., chen, h., & pavlicko, j. j. xiao, jj & wu, j. 2008. completing debt management plans in credit counseling: an application of the theory of planned behavior. journal of financial counselling and planning, vol. 19, no. 2, pp. 2946. http://dx.doi.org/10.1111/ijcs.12122 a. m.h. izzah, b. n.laily/journal of accounting and business education, 4 (2), march 2020 69 premature sign-off of audit procedure maryam hafidhatul izzah 1 nujmatul laily 2 1,2 accounting department, faculty of economic, universitas negeri malang, indonesia email: mhafidhatulizzah@gmail.com doi: http://dx.doi.org/10.26675/jabe.v4i2.8173 abstract: this research aims at testing influence of time pressure on premature sign-off of audit procedure with professional commitment as the moderating variable. this research uses questionnaire to collect the data. meanwhile, the population in this research are all independent auditors working for public accountant offices in malang, indonesia. amounting to a total of 50 auditors are used as the sample in this research. the sample in this this research is taken using purposive sampling. the result indicates that time pressure has a positive influence on premature signoff of audit procedure. this means the greater the time pressure the auditors are having, the more likely the auditors to be involved in premature sign-off of audit procedure practice, and vice versa. the second finding is that professional commitment weakens the influence of time pressure on premature sign-off of audit procedure. this means if an auditor is faced with high time pressure yet he/she possesses high professional commitment then the possibility of this auditor to get involved in premature sign-off of audit procedure practice is lower, and vice versa. keywords: time pressure, professional commitment, premature sign-off of audit procedure introduction companies need to perform audit to their financial statements in order to improve the quality of its financial statements made by its accountants. this audit is performed by external auditors who in their audit process refers to the applicable standards, i.e. international standards on auditing (isa). however, in practice many auditors perform their audits not in compliance with isa, and the practice of audit quality reduction or commonly known as reduced audit quality (coram et al, 2003) is one example of their noncompliance. included in this reduced audit quality that some auditors might do is the premature signoff of audit procedure practice (coram et al, 2003). this practice has something to do with ignorance or even termination of the procedures supposedly to be done in an audit program; auditors fail to follow the procedures thoroughly, yet they pass an audit opinion before accomplishing their job thoroughly (wahyudi et al, 2011). the snp finance case is one of cases related to premature sign-off of audit procedure practice. on july 2017, snp finance was found fabricating financial statements and caused losses to 14 banks in indonesia up to trillions rupiah. this snp finance’s fraud case also dragged the public accountant office satrio bing eny (sbe) which was affiliated to deloitte and during that time audited pt sunprima nusantara pembiayaan’s (snp finance) financial statements. upon further investigation, kap sbe was deemed to have not completely fulfill the audit standards and professional standards of public accountant in performing a general audit on snp finance’s financial statements. for example, information system control related to customer data and accounts receivable financing journal accuracy, and obtained no journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ a. m.h. izzah, b. n.laily/journal of accounting and business education, 4 (2), march 2020 70 adequate and accurate audit evidence of the customer’s accounts receivable financing. also, the quality control system owned by kap had a weakness in terms of its inability to prevent familiarity threat in the form of fairly long-standing relationship between senior personnel in audit engagement in the clients. this led to the decreasing professional scepticism the auditor ought to have at all times. this kap was found having audited the company since 2012 to 2016 fiscal years. on that basis, the state treasurer passed administrative sanction to the kap by restraining the involved public accountants from providing audit services to any financial service entity for 12 months, effective as of 16 september 2018 to 15 september 2019. another case related to premature sign-off of audit procedure is the case of kap meilina pangaribuan which audited pt jui shin indonesia’s 2015 financial statements. kap meilina pangaribuan did not perform an audit according to the procedure, i.e. it did not collect audit evidences of sales account, cost of goods sold, and tax debt. this was deemed as gross violation since it significantly influenced the financial statements, and eventually kap meilina pangaribuan was sanctioned, i.e. license suspension for a year. based on the cases above, we can see that many auditors still commit premature sign-off of audit procedure practice. according to th research conducted by andani & mertha (2014), the reasons behind an auditor’s decision to commit premature sign-off of audit procedure include time pressure, audit risk, locus of control and professional commitment. meanwhile, according to the study conducted by karim et al. (2015) when an auditor commits premature sign-off of audit procedure, it is due to time pressure, materiality, and lack of monitoring from the auditor manager. from these studies, it can be seen that internal and external factors are the cause for an auditor to commit premature sign-off of audit procedure practice. this is consistent with weningtyas et al (2006) who suggest that premature sign-off of audit procedure is due to the auditor’s personal characteristic factor, in which this characteristic constitutes an internal factor and situational factor when performing the audit (external factor). these statements are directly proportional with fritz heider’s (1958) attribution theory which explains that an individual’s behavior is influenced by both internal and external factors. one of the external factors indicated to influence premature sign-off of audit procedure is time pressure. time pressure is a condition in which an auditor receives pressure from the public accountant office he/she is working for to complete the audit at a predetermined time and costs (wahyudi et al, 2011). time pressue can lead an auditor to behave positively (asking more questions and getting motivated to complete the job) or negatively (by getting involved in audit quality reduction practice) (cook and kelly, 1991 in gundry & liyanarachchi, 2007). majid & asse’s (2018) found that time pressure has a positive influence on auditor's dysfunctional behavior. it is allegedly because the auditor thinks that in performing the audit he/she has to follow the time budget which has been set. time budget is also deemed to have some association with auditor’s performance assessmen and this will eventually make the auditor force themselves to complete the audit according to the time budget, even if he/she has to commit dysfunctional behaviors. in some studies, it is found that time pressure gives a positive influence on dysfunctional audit behaviour or premature sign-off of audit procedure (coram et al, 2003; karim et al, 2015; weningtyas et al, 2006; gundry & liyanarachchi, 2007, siregar et al, 2018, istiqomah & hanny, 2017). when an auditor needs to complete the audit task within a brief period of time, they are more likely to ignore or disregard some audit procedure they think immaterial and less important. in addition, they merely accept the client’s explanation without checking and reviewing extensively the client’s document (karim et al, 2015). this means when an auditor is faced with high time pressure, it is more likely for the auditor to commit premature sign-off of audit procedure practice. meanwhile, wahyudi et al (2011) and anita et al (2014) found that time pressure has no influence on premature sign-off of audit procedure practice. this is because the auditor think he/she has to continue to work professionally (in this case, performing all steps in audit procedure) despite having to deal with time pressure while auditing their clients. previous studies show different findings, leading to ambiguity in drawing conclusion. for this reason, the research re-tests the influence of time pressure on premature signoff of audit procedure. a. m.h. izzah, b. n.laily/journal of accounting and business education, 4 (2), march 2020 71 the time pressure variable in the research conducted by alderman & deitrick (1982) in weningtyas (2006) constitutes the main factor many auditors choose as the reason behind their decision to commit dysfunctional behavior such as premature sign-off of audit procedure practice. this result finding is also supported by coram et al, (2003) who also find that the most common (main) reason chosen by auditors behind their decision to commit dysfunctional behavior is time pressure. these studies show that time pressure is an external factor with highly strong influence on auditor to commit dysfunctional behavior, including premature sign-off of audit procedure practice. after being faced with the external factor most commonly chosen by auditors as the reason behind their premature sign-off of audit procedure practice, there is also an internal factor with equally strong influence on an auditor to commit premature sign-off of audit procedure, namely professional commitment. professional commitment is defined as an individual’s relative power to be identified and engaged to a profession (hartanto, 2016). according to shaub et al., (1993) in silaban (2010) professional commitment is an important factor which influences an auditor’s behavior in dealing with ethical issues. meanwhile according to aranya et al., (1981) a person's commitment to his/her profession is materialized in three characteristics below; (1) an acceptance of professional goals and values, (2) a willingness to exercise the best attempts for the purpose of the profession, and (3) a desire to maintain and keep their membership in the profession. this means auditors with high professional commitment will not be involved in dysfunctional practices which may harm themselves and their profession since they possess characteristics, i.e. willing to accept professional goals and values, trying their best for their profession, and maintaining and keeping their membership in the profession. previous studies found that professional commitment (as an independent variable) has a negative influence on auditor’s dysfunctional behavior (alkautsar, 2014; hartanto, 2016, tamara, 2017). meanwhile, andani et al (2014) and fakhar & hoseinzadeh (2016) find that professional commitment has a significant negative influence on premature sign-off of audit procedure practice (one example of auditor’s dysfunctional behavior) and other dysfunctional behaviors. this means the greater the professional commitment owned by an auditor within themselves, the less likely for this auditor to commit dysfunctional behavior (including premature sign-off of audit procedure practice). kesuma & dwindra’s (2019) found that time pressure has a negative influence on audit quality, and the second finding is that professional commitment can weaken the influence of time pressure on audit quality. this means the higher the time pressure level encountered by an auditor, the more likely the quality of audit to be produced to be weaker. however, when this auditor has high professional commitment in themselves, then even high time pressure will not have any influence on the quality of audit he/she produces. this proves that an auditor with high professional commitment is less likely to commit deviant behaviors which may compromise the quality of audit they generate even if they are under a high time pressure. as to what makes this research different from those studies previously conducted is its variables. this research tests an external factor which has a strong influence on premature sign-off of audit procedure practice, namely time pressure, which is then assigned as an independent variable and an internal factor which has a strong influence to refrain an auditor from comitting premature sign-off of audit procedure practice which is then used as a moderating variable. this is done in order to find new knowledge of whether or not a moderating variable can influence the existence of independent variable on dependent variable. a. m.h. izzah, b. n.laily/journal of accounting and business education, 4 (2), march 2020 72 literature review and hypotheses attribution theory this attribution theory was developed by heider (1958) who argued that a person’s behavior was determined by a combination of internal forces, i.e. factors from within that very person, such as ability or effort, and external forces, i.e. factors from the outside, such as difficulties in job or luck (ikhsan and ishak, 2008). meanwhile, according to lestari (2010) internal causes tend to refer to individual’s behavioral aspects, something which has been within a person such as personal characters, self perception, ability, and motivation. meanwhile, external causes refer more to the environment which influences a person’s behavior, such as social conditions, social values, and community’s view. the association between heider’s attribution theory and this research is that both observe the (internal/external) factors in a phenomenon. in this research, the researchers test two external factors (time pressure) allegedly causing auditor to commit premature sign-off of audit procedure and one internal factor suspected or expected to prevent auditors from committing premature sign-off of audit procedure, i.e. professional commitment. upon knowing the factors triggering premature sign-off of audit procedure practice, it is expected that these factors could later be minimized and, therefore, the probability of an auditor to commit this practice can be reduced. time pressure and premature sign-off of audit procedure time pressure is a condition in which an auditor receives a pressure from the client or the public accountant office he/she is working for to complete the audit at a predetermined time and cost budget (wahyudi et al, 2011). completing an audit procedure in the presence of time pressure will of course lead to different result when the audit procedure is completed under no time pressure (weningtyas et al., 2006). time pressure has generally been proven to have a detrimental impact on individual’s decision making process. for example, in edland and svenson’s (1987) research in gundry & liyanarachchi (2007), it is found that individual’s performance accuracy is more likely to decrease when they are face with time pressure. in general, stress and performance tend to have inverse relationship, and time pressure can be the main source of stress (maule and svenson, 1993 in gundry & liyanarachchi, 2007). majid & asse’s (2018) found that time pressure has a positive influence on auditor’s dysfunctional behavior . it is suspected that this is because the auditor thinks that in performing the audit they have to follow the predetermined time budget. time budget is also deemed to have something to do with auditor’s performance assessment; this will eventually make the auditor to push themselves to perform the audit according to the time budget even if they have to commit dysfunctional behaviors. additionally, when an auditor needs to complete their audit job within a brief period of time, they might tend to ignore or disregard several steps of audit procedure they think immaterial and unimportant (karim et al., 2015). relating this to heider’s (1958) attribution theory who stated that a person’s behavior was determined by external and internal factors, then in this case, time pressure is an external factor which makes an auditor stressed and lowers his/her performance and eventually it serves as the basis for an auditor to commit dysfunctional behavior, i.e.. premature sign-off of audit procedure. this means the higher the time pressure faced by an auditor, the more likely for him/her to commit premature sign-off of audit procedure practice (coram et al., 2003; gundry & liyanarachchi, 2007; karim et al., 2015; rochman et al., 2016; weningtyas et al., 2006, siregar et al, 2018, istiqomah & hanny, 2017). as explained above, for an auditor time pressure has a strong influence on premature sign-off of audit procedure practice, thus the hypothesis to be tested is as follows: h1: time pressure has an influence on premature sign-off of audit procedure. professional commitment moderates time pressure on premature sign-off of audit procedure professional commitment is an individual’s characteristics which have an influence on his/her belief in controlling the situation or condition he/she faces, thus an auditor’s commitment to his/her profession may have an influence on his/her behavior in doing the audit program. professional commitment is defined as an individual’s relative power to be identified and engaged to a profession (hartanto, 2016). associating a. m.h. izzah, b. n.laily/journal of accounting and business education, 4 (2), march 2020 73 it with attribution theory, a person tends to do something due to an external or internal factor. in this case, the auditor refraining himself/herself from committing premature sign-off of audit procedure is due to internal factor, i.e. professional commitment within the auditor. in this research, professional commitment becomes an example of internal factor which prevent a bad factor (such as time pressure) from entering the auditor’s mind and eventually from committing dysfunctional practices. professional commitment prevents the auditor from commiting those practice which contradict their profession (premature sign-off of audit procedure practice). meanwhile, some studies support the idea that professional commitment can prevent individuals from comitting premature sign-off of audit procedure practice (dysfunctional behavior) (alkautsar, 2014; hartanto, 2016; andani et al, 2014; fakhara & hoseinzadeh, 2016, tamara, 2017). kesuma & dwindra (2019) found that time pressure has a negative influence on audit quality, and the second finding is that professional commitment can weaken the influence of time pressure on audit quality. this means the higher the time pressure an auditor has to deal with, the weaker the quality of audit he/she produces would be. however, when this auditor has a high professional commitment within himself/herself, then the high time pressure will not have an influence on the quality of audit he/she generates. this also proves that an auditor with high professional commitment level is more likely to refrain himself/herself from committing deviant behaviors which might compromise the quality of audit he/she produces even when he/she is under a high time pressure. as explained earlier, the external factor most auditors choose as the main factor which causes them to commit premature sign-off of audit procedure practice is time pressure (coram et al., 2003; gundry & liyanarachchi, 2007; karim et al., 2015; rochman et al., 2016; weningtyas et al., 2006). therefore, this research aims to test how professional commitment as the internal factor considered capable of making auditors refrain themselves from committing dysfunctional behavior, i.e.. committing premature sign-off of audit procedure practice, can moderate the influence of time pressure on premature sign-off of audit procedure. based on the explanation above, the hypothesis to be tested is as follows: h2: professional commitment moderates the influence of time pressure on premature sign-off of audit procedure. methods the approach used in this research is the correlational one. correlational approach is the approach which sees the correlation between one variable to another. this is research with quantitative method. the sample used in this research is auditors of public accountant office in malang municipality which makes a total of 50 auditors and the sampling method uses purposive sampling. the criteria of the sample used are that the respondents must be an auditor who works for a public accountant office in malang, indonesia. the respondents are limited to the positions of supervisior/manager, senior auditor, and junior auditor. the respondents who assume the position as a partner are excluded from the sample in this research since they do not perform the audit assignment directly. the primary data are collected using questionnaire which is distributed to public accountants working for public accountant offices in malang municipality. premature sign-off audit procedure is a practice that occurs when the auditor ignoring some required audit procedures but he can provide an opinion on a financial statement (shapeero et al., 2003). time pressure is a condition where the auditor gets pressure from the client or the public accounting firm where he works, to complete the audit at a predetermined time and will negatively impact the auditor's performance. the instrument used for premature sign-off of audit procedure and time pressure are taken from weningtyas et al (2006). professional commitment is an individual characteristic that influences a person's beliefs in controlling his behavior. this instrument adopted from smith & hall (2008). a. m.h. izzah, b. n.laily/journal of accounting and business education, 4 (2), march 2020 74 results respondent characteristics based on the website of ikatan akuntan publik indonesia (iapi), there are 13 public accountant offices in malang municipality. yet, in this research only 7 (seven) of them are willing to complete the research questionnaire. the total number of research questionnaires distributed to respondents is 58 questionnaires, and the returned and processable ones is only 50 questionnaires or 86 % of the total respondents. some auditors in some public accountant offices fail to complete the questionnaire since they are too busy auditing while the research is being conducted. the characteristics of respondents by sex are 42% of them are male and 58% of them are female. by education, 82% of the auditors completed their s1 degree, and the remining 18% of them completed their d3 degree. by position, 74% of the auditors are junior auditors, 14% are senior auditors, and 12% are supervisiors. based on their time of service as an auditor, 88% of the auditors have work experience in auditing for 1-5 years, 7% of them 6-10 years, and 5% of them 11-15 years. interaction test the interaction test in this research used moderated regression analysis. moderated regression analysis employs analyitical approach which maintains the sample integrity and provides the basis for controlling the influence of moderating variable (ghozali, 2018:227). a moderating variable is an independent variable which will strengthen or weaken the correlation between another independent variable on the dependent variable. the moderated regression analysis in this research is used to test whether the professional commitment variable is the one which moderates the influence of time pressure on premature sign-off of audit procedure. table 1. result of moderated regression analysis (mra) variable unstandardized coefficient standardized coefficient sig b beta time pressure 2.745 1.744 0,000 professional commitment 0,915 0,590 0,057 tp*pc -0,125 -1.037 0,004 from the result of spss output test above, the significance value of time pressure < 0.05. this means time pressure has an influence on premature sign-off of audit procedure, with positive unstandardized coefficients result. based on this fact, then h1 is confirmed. the interaction test generates a sig value < 0.05. this means the professional commitment variable is a pure moderating one, meaning that this variable can only be used as a moderating variable and cannot be used as an independent variable. based on the result of unstandardized coefficients, the data shows a negative direction, meaning that the professional commitment variable has a moderating nature which weakens the influence of time pressure on premature sign-off of audit procedure. based on this fact, then h2 is confirmed. discussion time pressure has an influence on premature sign-off of audit procedure hypothesis 1 states that time pressure has an influence on premature sign-off of audit procedure. based on the result, it is found that the time pressure occuring at public accountant office in malang municipality has an influence on the incidence of premature sign-off of audit procedure practice. this indicates that the higher the time pressure faced by an auditor in auditing their client’s financial statements the more likely for premature sign-off of audit procedure practice to occur. the opposite is also true, the lower the time pressure faced by an auditor the less likely for this auditor to commit premature sign-off of audit procedure. thus, hypothesis 1 proposed in this research can be accepted. a. m.h. izzah, b. n.laily/journal of accounting and business education, 4 (2), march 2020 75 this result is consistent with heider’s (1958) attribution theory which explains that a person’s behavior does not abruptly occur, rather some factors are behind a person’s behavior. meanwhile, the factors behind a person’s behavior consist of internal and external factors. in this research, time pressure becomes an example of external factor which leads an auditor to commit premature sign-off of audit procedure practice. this is because when an auditor needs to complete their audit job within a brief time, they are more likely to ignore and disregard some steps in audit procedure they think immaterial and unimportant (karim et al, 2015). from this explanation, it can be concluded that one of external factors which influence an auditor to commit premature sign-off of audit procedure is time pressure. based on the data analysis result, the respondents in this research are mostly women at 58% who mostly assume the position of junior auditor at 74% and senior auditor at 14%. most auditors in this research have worked as an auditor for 1-5 years at 88%. the percentage of respondent’s answers to questions on time pressure variable is dominated by frequent category at 38%. it means this result explains that an auditor is frequently faced with time pressure when performing their job. in terms of the situation when the assignment is in progress, most junior auditors in malang municipality experience frequent time pressure at 63% or 12 junior auditors. meanwhile, the time pressure experienced by senior auditors and supervisiors in malang municipality is relatively low at 21% or 4 senior auditors and 16% or 3 supervisiors respectively. based on this analysis result, it can be seen that in this research junior auditors experienced time pressure more frequently than the senior auditors and supervisors. this result is consistent with the research conducted by coram et al (2003), karim et al (2015), weningtyas et al (2006), and gundry & liyanarachchi (2007) who all find that time pressure has positive influence on audit’s dysfunctional behaviors or premature sign-off of audit procedure. the higher the time pressure experienced by an auditor, the more likely this auditor to commit premature sign-off of audit procedure practice (and vice versa). karim et al’s (2015) found that the procedure most frequently termined is vouching of expenses. in this research, it is found that the step of audit procedure most frequently terminated is reducing the number of sample which has been planned in auditing financial statements, and this is also consistent with weningtyas et al’s (2006) research who find that the auditors acknowledge that the premature sign-off of audit procedure practice they usually commit is reducing the number of sample in an audit, performing shallow review on client’s documents, and not expanding the examination when a questionable item is found. from the explanations above, it can be concluded that h1 which states time pressure has an influence on premature sign-off of audit procedure is accepted. meanwhile, the influence of time pressure on premature sign-off of audit procedure is positive, meaning that the higher the time pressure experienced by an auditor, the more likely for this auditor to commit premature sign-off of audit procedure (and vice versa). this is because when an auditor is faced with time pressure, then this auditor is more likely to skip the audit procedures they think not too important and this will lead to premature sign-off of audit procedure practice. professional commitment moderates the influence of time pressure on premature sign-off of audit procedure the second hypothesis in this research states that professional commitment moderates the influence of time pressure on premature sign-off of audit procedure. based on the result, it is found that professional commitment moderates the influence of time pressure on premature sign-off of audit procedure. this means the higher the professional commitment possessed by an auditor, the weaker the influence of time pressure on premature sign-off of audit procedure. the opposite is applies, i.e. the lower the professional commitment owned by an auditor, the more likely for this auditor to commit premature sign-off of audit procedure. thus, hypothesis 2 proposed in this research is confirmed. based on the result of moderated regression analysis (mra), it is found that professional commitment variable is a pure moderation variable and not a quasi moderation variable . this means that the professional commitment variable in this research can only be used as a moderating variable, rather than an independent one. a. m.h. izzah, b. n.laily/journal of accounting and business education, 4 (2), march 2020 76 the result of descriptive analysis shows that the percentage of respondent answers to questions on professional commitment variable are dominated by high category at 50%. this means this result explains that the auditors who works for public accountant offices in malang municipality have high professional commitment. meanwhile, the agree choice in the research questionnaire is mostly selected by junior auditors at 81% or 21 junior auditors. meanwhile, for senior auditors and supervisiors in malang municipality, it is relatively low, amounting to the same number at 8% respectively or only 2 senior auditors and 2 supervisiors. based on this result, it could be concluded that junior auditors have higher professional commitment. this research result is consistent with heider’s (1958) attribution theory which explains that a person’s behavior does not abruptly occur, rather some factors are behind a person’s behavior. meanwhile, the factors behind a person’s behavior consist of internal and external factors. in this research, professional commitment becomes an example of internal factor which prevents bad factors from playing some role within the auditors’ mind and eventually prevents the auditor from committing dysfunctional practices. this is confirmed by aranya et al, (1981) who suggest that an auditor with high professional commitment will not get involved in dysfunctional practices (including premature sign-off of audit procedure practice) which may harm himself/herself and his/her profession for they possess certain characteristics, including willingness to accept professional goals and values, exercising the best attempts for the purpose of their profession, and maintaining and keeping their membership in their profession. based on the explanations in the previous chapter, the professional commitment of auditors in malang municipality is relatively high, meaning that the professional commitment variable can indeed minimize/weaken the influence of time pressure on premature sign-off of audit procedure which occurs in public accountant offices in malang municipality. this result is consistent with the research conducted by alkautsar (2014) and hartanto (2016) who find that professional commitment has a negative influence on dysfunctional audit behavior, meaning that if within an auditor himself/herself there is a high professional commitment, then the possibility for an auditor to commit dysfunctional behaviors will be decreasing (and vice versa). this research result is also in line with the studies conducted by andani et al (2014) and fakhar & hoseinzadeh (2016) who suggest that an auditor with high professional commitment is less likely to commit premature sign-off of audit procedure practice. conclusion based on the result of research which has been conducted, it is found that time pressure has a positive influence on premature sign-off of audit procedure. another finding of this research is that professional commitment weakens the influence of time pressure on premature sign-off of audit procedure. based on these explainations, it can be said that this research has successfully proved empirically the applicability of heider’s attribution theory who suggests that whether an auditor commits or refrains from committing premature sign-off of audit procedure practice is due to an external factor in the form of time pressure and internal factor in the form of professional commitment. this research has a limitation, i.e. its questionnaire is distributed not at the right time for when it is distributed some auditors are too busy auduting their clients, leading to the low response rate and some kaps even do not return the questionnaire since their auditors are too busy and the researcher does not personally wait for the questionnaire to be completed, thus whether the research questionnaire is actually completed by the research respondents or by others remains unknown. meanwhile, the suggestions the researcher could offer for further studies is to investigate other variables possibly capable of influencing an auditor in committing dysfunctional actions for finding a way to solve and minimize them. a. m.h. izzah, b. n.laily/journal of accounting and business 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(2011). praktik penghentian prematur atas prosedur audit. media riset akuntansi, 1(2), 125–140. https://doi.org/10.1111/j.1525-1594.1982.tb01680.x weningtyas, s., setiawan, d., & triatmoko, h. (2006). penghentian prematur atas prosedur audit. simposium nasional akuntansi 9 padang, 1–33. https://doi.org/10.1111/j.1525-1594.1982.tb01680.x n.laily,f.s,riadani/journal of accounting and business education, 3 (2), march 2019 141 the factors influencing perceived ease of use of e-learning by accounting lecturer nujmatul laily 1 fenty shintya riadani 2 1,2accounting department, faculty of economic, universitas negeri malang, indonesia email: nujmatul.laily.fe@um.ac.id doi: http://dx.doi.org/10.26675/jabe.v3i2.8166 abstract: this research aims at analyzing the influence of one’s anxiety in using computer (computer anxiety), age and gender on perceived ease of use of e-learning by accounting lecturers through their self-efficacy in using computer (computer self-efficacy). the population used in this research is all 34 lecturers at accounting department in x university and the sample is taken using saturated sampling technique since the number of respondents is limited. the data are collected by distributing questionnaire to lecturers. the hypotheses are tested using path analysis test. the research results indicate that: (1) computer anxiety has insignificant influence on perceived ease of use through computer self-efficacy. (2) respondent’s age has insignificant influence on perceived ease of use through computer self-efficacy. (3) respondent’s gender has insignificant influence on perceived ease of use through computer self-efficacy. keywords: computer anxiety, age, gender, computer self-efficacy, perceived ease of use of e-learning introduction ` the performance of regional government administration related to the accountability of state finan as time goes, the use of internet for education in indonesia keeps on developing. this use of internet in education field is commonly known as e-learning. e-learning is a teaching and learning process which employs computer, network, teaching software equipped with such facilities as communication, monitoring and evaluation. using e-learning, the meeting between lecturers and students is not necessarily made face to face. x university is one of state universities in indonesia that begins to apply e-learning in its teaching and learning process. x university’s elearning was built by its ict center in 2008. this ict center is a working unit which processes data and information in academic and administrative fields under the responsibility of and should report to the rector. despite the great advantages offered by e-learning, this system attracts less interest and is infrequently used by both lecturers and students. in the university, even until now some lecturers and students have not used e-learning as expected by tik as its administrator. based on the researcher’s experience during her study at x university, only several lecturers have employed e-learning service. this is supported by the interview with a lecturer as one of the administrators of e-learning at x university. he said that currently at x university only three lecturer actually utilized e-learning journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v3i2.8166 n.laily,f.s,riadani/journal of accounting and business education, 3 (2), march 2019 142 service actively in the form of moodle which had been provided by the university. meanwhile, from the researcher’s observation, currently the facilities required to support the utilization of e-learning at x university have been adequate. this phenomenon inevitably raises the question of how come not too many lecturers have used e-learning in their teaching and learning processes, be it the ones based on moodle or other e-learnings. therefore, the researcher wishes to figure out several factors suspected to have some influence on the application of e-learning by accounting lecturers at x university. one theory on the use of information technology system which can be used to explain an individual’s acceptance to the use of information technology system is technology acceptance model (tam). tam is a widely-used model in many studies on the process of adopting information technology. this model aims at explaining the main factors of user’s behavior on acceptance of technology use. this model places the attitude factor of each user’s behavior with two variables, namely ease of use and usefulness. these two aspects can explain user’s behavioral aspect (davis, et al,1989). tam model has been continuously developed by several researcher by adding some external variables which explain further or become antecedent of perceived use and ease to finish jobs or tasks at hand, as compared to those with fairly low anxiety. in addition to computer anxiety, demographic factors such as gender and age are also suspected to affect one’s self-efficacy in using a computer. this is supported by the research conducted by he and freeman (2009). their research finds that women have higher self-inefficacy in using computer than men. mini & janetius (2012) in their research results revealed that someone at older age is more likely to have higher resistance than those at younger age group since they are not too familiar with new technology. saade and kira (2009) in their research results disclosed the direct relationship between computer anxiety and perceived ease of use. the research conducted by sudaryono (2005) and harimurti (2016) showed that computer anxiety has a negative effect on one’s computer selfefficacy. on the other hand, farokhah (2016) found the influence of computer self-efficacy on perceived ease of use of technology by someone. the lesser the anxiety that someone feels in using computer, the greater one’s self-expertise in using computer, thus it can minimize their efforts in using new technology such as elearning. thus, the researcher places computer self-efficacy as an intervening variable to show the indirect influence of computer anxiety on perceived ease of use of technology. this can be used as what makes this research different from previous studies. this research focuses on lecturers at a university since they are the main factor which can contribute to the success of a teaching and learning process (al-alak & alnawas, 2011) and their knowledge on technology and their attitude to technology play an important role in the use of e-learning technology. literature review and hypotheses accepting or rejecting the existence of a new technology has been investigated in the field of information system. this investigation measures whether or not the technology is successful in the society. the use of available information technology has something to do with the behavior of individual who uses it. jogiyanto (2007: 16) suggests that a model and theory is needed to explain the interaction between individuals and information system. one of the most commonly used theory in research on information technology is technology acceptance model or tam. this technology acceptance model is developed by davis et al. (1989) based on theory of reasoned action (tra) model. tra model can be applied since the decision made by individuals to accept an information system technology is a conscious action which can be explained and predicted by the behavioral intention. everyone has varied perception in viewing the development of information technology. information technology changes the way people accomplish their daily problems and tasks. in a more detail, tam model explains it acceptance with certain dimensions which can influence whether or not it is accepted by users. tam model adds to main constructs into tra model, namely perceived n.laily,f.s,riadani/journal of accounting and business education, 3 (2), march 2019 143 ease of use and perceived usefulness. tam has 5 main constructs, namely: (1) perceived usefulness, (2) perceived ease of use, (3) attitude toward using technology, (4) behavioral intention to use, and (5) actual technology use. the explanations of each construct above are as follows. the first construct is perceived usefulness, hereinafter referred to as usefulness. usefulness is defined as to what extent one believes that using a technology will improve their job performance (davis, 1985: 26). this construct is influenced by the ease of use construct. previous research indicated that usefulness is the most significant and important construct which influence attitude, intension and behavior (jogiyanto, 2008: 114). there are 6 indicators to measure this usefulness construct, namely work more quickly, improve job performance, increase productivity, improve job effectiveness, makes job easier and useful (davis, 1989). the second construct is perceived ease of use, hereinafter referred to as ease of use. ease of use is defined as to what extent people believe that using a technology will set them free from efforts (davis, 1985: 25). this construct influence usefulness, attitude, intension and actual use of technology constructs. however, it has most significant influence on usefulness construct, and on other constructs it has insignificant influence (jogiyanto, 2008: 115). there are 6 indicators to measure ease of use construct, namely the sistem’s ease to be learned (easy of learn), the system’s controllability (controllable), clear and understandable interaction with the system (clear and understandable), interaction flexibility (flexibility), easy to be skilled in using the system (easy to become skillful) and easy to use (davis, 1989). the third construct is attitude toward using technology, hereinafter referred to as attitude. attitude can be defined as one’s positive or negative feeling if they have to perform the behavior to be determined (davis et al., 1989). in tam model, attitude influences intension and is influenced by ease of use and usefulness. jogiyanto (2008: 116) also suggests that in previously conducted studies, some of them showed that attitude has a positive influence on intension, yet some others indicated that attitude has no significant influence on intension. therefore, some studies which employed tam excluded the attitude construct from ther models. the fourth construct is behavioral intention to use, hereinafter referred to as intension. intension influences actual use of technology and is influenced by attitude and usefulness. there are 2 indicators to measure the intension construct, namely using the system to complete the task (carrying out the task) and planned utilization in the future (amoroso and gardner, 2004). the fifth construct is actual technology use, hereinafter referred to as actual use of technology or simply use. in tam, actual use of technology is equal to the term behavior in tra, yet it is only to be used in technology context. this construct is directly influenced by intension and usefulness. influence of computer anxiety on perceived ease of use e-learning through computer selfefficacy computer anxiety is the anxiety in using computer and anxiety on the negative effect of computer use on the society (emmons, 2003). the social cognitive theory (bandura, 1986, 1991; wood & bandura, 1989) states that a behavior is the function of its consequence, it can be changed through cognitive mediation and social learning. the social cognitive theory shows that our self-arrangement mechanism can influence the relationship between our emotional passion and action or performance, and that this relationship is reciprocal. thus, a change in one factor can lead to changes in other factors. the most important self-arrangement mechanism has been identified as self-efficacy which has been proved significantly influential on individual intension and behavior (de vries, backbier, kok & dijkstra, 1995; igbaria et al., 1994; brubaker & fowler, 1990) and tightly related to anxiety (harrison & rainer, 1992). based on the interpersonal behavior theory developed by triandis (1980) in jogiyanto (2007), it is stated that behavioral intensions (in this case technology acceptance) is highly influenced, among other things, by the feeling that an individual has. on the other hand, tam theory which has been developed shows that self-efficacy influences perceived one’s ease of use in using technology. based on these theories, it can be then proposed that individuals with positive feeling towards computer use should have high capability in using the computer, hence it can result in their acceptance of a technology. when an n.laily,f.s,riadani/journal of accounting and business education, 3 (2), march 2019 144 individual has high confidence of their capability in using computer, it will not hard for them to use a new technology (perceived ease of use). this is supported by previous research conducted by igbaria and iivari (1995) which proved that computer self-efficacy had a direct effect on perceived ease of use. saade & kira (2009) had investigated the influence of computer anxiety on perceived ease of use as mediated by computer self-efficacy variable. in the first hypothesis, it was shown that computer anxiety had a direct influence on perceived ease of use. in the second hypothesis, after including computer selfefficacy as an intervening variable, the influence computer anxiety on perceived ease of use was lesser. computer self-efficacy has a significant mediating influence to reduce anxiety of lms use. based on the explanation above, the following hypothesis is developed: h1 = computer anxiety influences perceived ease of use of e-learning through computer self-efficacy. influence of age on perceived ease of use through computer self-efficacy currently, the increasingly higher and more complicated work loads require lecturers to use computer as an aid to finish their jobs. as the job demands grow, an individual will attempt to improve their skills and abilities in using computer. nevertheless, not every individual can easily accept or learn computer technology well, particularly in elder individuals. this is because they are more likely to have their ability to think decreased and less interested in learning a new technology. some researchers argued that more younger individuals used computer than their older counterparts. thus, the lack of experience in using computer causes the performance of individual at older age lower than the younger ones (dyck & smither, 1994). sibona & choi (2012) had conducted a study on facebook user satisfaction. one of their findings was that users at older age saw the site more difficult to be used than younger users. younger users might be more familiar with internet and it than the older ones. dyanrosi (2015) in his/her research also found that age had a negative significant influence on perceived ease of use. the path coefficient obtained from the research showed that the influence of age on perceived ease of use is inversely proportional, thus, the lower (younger) the age of an individual the greater their perceived ease of use would be. several years prior to these studies, chung, et al (2010) had investigated the difference of age in perception of online community conducted by those who had participated in this community. the research used technology acceptance model to investigate the factors influencing intension in the future to participate in online community. one of its findings revealed that age had no influence on perceived ease of use. in making decision whether to join or not in an online community, older adults were not necessarily more influenced by the ease of use in the online community than younger adults. the different findings between chung, et al (2010) and sibona & choi (2012) and dyanrosi (2015) make the researcher interested in placing computer self-efficacy as a mediating variable age and perceived ease of use of e-learning. younger individuals will find it easier to use e-learning since they have the ability to use computer. based on the explanation above, the following hypothesis is developed: h2 = age influences perceived ease of use of e-learning through computer self-efficacy. influence of gender on perceived ease of use through computer self-efficacy etymologically, the word ‘gender’ comes from english which means ‘sex’. gender is an attribute which is used as the basis to identify the difference between male and female as seen from their sociocultucal condition. several studies explained the importance of taking gender into consideration. gefen and straub (1997) explained that women had a positive influence on perceived usefulness, and men had a positive influence on perceived ease of use. other researchers, i.e. venkatesh and morris (2000), tested the difference between women and men in the use of information technology. their research found that women were more likely to use a technology under the influence of perceived ease of use and men were more likely to use a technology under the influence of perceived usefulness of that technology. sanjaya (2008) suggested that gender positively influenced perceived usefulness and perceived ease of use.another study found that gender had no influence on perceived ease of use, as the one conducted by sari & baridwan (2012) and dyanrosi (2015). this research result was n.laily,f.s,riadani/journal of accounting and business education, 3 (2), march 2019 145 consistent with what harmadi and hermana (2005) found in their research which analyzed the process of adoption in using information technology in a national private bank. their research revealed that gender did not influence perceived ease of use to use technology-based information system. given the inconsistent research results above, it is reasonable to suspect that a factor might mediate the influence of gender on perceived ease of use. some studies had shown the influence of one’s gender difference on their expertise in using computer (computer self-efficacy), such as the ones conducted by trisnaningsih (2004), rustiana (2004), tjandra (2007). rustiana’s (2004) research found that male students’ cse was better than the female ones. this was because men generally have higher ability to make innovations and conquer challenges. trisnaningsih (2004) in her research found generally held belief that men were more workoriented, objective, independent, aggresive, and had better abilities in general than women in terms of managerial responsibilities. on the other thand, women were deemed more passive, soft, consideration-oriented, more sensitive and had lower position in their accountability in an organization than men. another finding also showed that sex had some influence on attitude towards computer. harrison and rainer (1992) found that male end user computing personnel had higher computer self-efficacy than women. an individual with high self-efficacy will find it easier to accept new technology than those with low computer self-efficacy. this statement is suppotted by the result of research conducted by venkatesh and davis (1996) and hong et al. (2002). based on the explanation above, the researcher formulates the following hypothesis: h3 = gender influences perceived ease of use of e-learning through computer self-efficacy. methods this research is explanatory research, i.e. testing the influence of independent variables on dependent variables which has been hypothesized. this research explains how computer anxiety, age, and gender influence perceived ease of use of e-learning through computer self-efficacy. the population in this research is all lecturers of accounting department at x university. the sample in this research is all lecturers of accounting department at x university, amounting to 32 lecturers. according to arikunto (2006:134), if the research subject was less than 100, it is better to take them all as the sample, hence the research becomes population research. computer anxiety is an expression of negative feeling or exaggerated prejudice regarding difficulties caused by the utilization of computer which leads to antipathy to computer (supriyadi, 2003). to measure students’ anxiety level, the researcher used computer anxiety rating scale (cars) instrument developed by harrison and rainer (1992). the respondents were asked to choose an answer to a question in the form of four-point interval scale. cars instrument developed by harrison & rainer showed that there were two items which indicated the existence of computer anxiety forming indicator. the first indicator shows that there is a computer fear, and the second indicator indicates that there is a computer anticipation or the feeling of being challenged in using computer. the respondent’s age variable is known by asking the respondent to indicate their age in the questionnaire. meanwhile, gender variable was measured using fixed response item (1 = man; 2 = woman). the intervening variable in this research is computer self-efficacy (y). this computer self-efficacy by indriantoro (2000) was defined as the computer user’s efficacy in terms of computer application, computer operating system, file and hardware handlings, data storage and keyboard use. the term computer users means lecturers of accounting department at x university. computer user’s efficacy is measured using computer self-efficacy scale developed by compeau & higgins (1995). ease of use is defined as to what extent a person believes that using a technology will set them free from efforts (davis, 1986). perceived ease of use is part of tam factors. n.laily,f.s,riadani/journal of accounting and business education, 3 (2), march 2019 146 results sub-structure 1 path analysis is used to discover the strength of relationship of independent variables (computer anxiety, age, and gender) on the mediating variable (computer self-efficacy). table 1. relationship between independent variables and mediating variable unstandardized standardized coefficients coefficients model b std. error beta t sig. 1 (constant) 18.106 3.608 5.018 .000 computer_anxiety_x1 -.111 .085 -.245 -1.300 .205 age_x2 -.004 .048 -.018 -.091 .929 gender_x3 -.754 1.177 -.125 -.641 .527 from the table, it can be seen that computer anxiety, age and gender had sig value > 0.05, meaning that the three variables had no influence on computer self-efficacy. sub-structure 2 path analysis is used to discover the strength of relationship of independent variables (computer anxiety, age, gender, and computer self-efficacy) on the dependent variable (perceived ease of use of e-learning). table 2. relationship between independent variables and dependent variable unstandardized standardized coefficients coefficients model b std. error beta t sig. 1 (constant) 28.444 8.788 3.237 .003 computer_anxiety_x1 -.392 .154 -.437 -2.548 .017 age_x2 .028 .085 .057 .329 .745 gender_x3 3.552 2.077 .295 1.710 .099 cse_y .176 .337 .088 .522 .606 from the table, it can be seen that only computer anxiety influenced perceived ease of use of e-learning and neither age, gender nor computer self-efficacy had any influence on perceived ease of use of elearning. this was seen from the significance value which was greater than 0.05. discussion influence of computer anxiety on perceived ease of use of e-learning through computer self-efficacy. in general, to acquire computer self-efficacy a user needs to be "computer literate". a computer iterate individual should feel comfortable using computer technology to solve their problems and finish their jobs (holzinger, 1992). the rapid and dynamic change of technology may lessen one’s confidence in learning and using new technology such as e-learning. based on interpersonal behavior theory, one’s attitude consists of such components as cognition, affect, and other behavior-related components. one’s desire is influenced by believe and future consequence, thus it creates one’s affect as expressed with like or dislike attitude towards computer technology. one’s dislikeness to computer may be caused by fear of computer technology use or commonly known as computer anxiety (igbaria and pasuraman, 1989). heinssen et al. (1987) research n.laily,f.s,riadani/journal of accounting and business education, 3 (2), march 2019 147 found that students with higher computer anxiety had lower belief on their own ability as well as lower performance than those with lower computer anxiety. however, this research found that lecturers with low computer anxiety were not necessarily had higher computer self-efficacy. most accounting lecturers at this x university had low computer anxiety, yet most of them also had low computer self efficacy. thus, the result of this research did not confirm the many previously conducted studies, which found that an individual with low computer anxiety would have high computer self-efficacy. based on the previously developed tam, the ease of use of technology is influenced, among other things, by computer self-efficacy. their research had tested and analyzed the influence of technology acceptance model (tam) on land-related activity computerization. their research found that computer self-efficacy significantly influenced perceived ease of use. this phenomenon was possible since employees had high confidence in their ability and skill in using land-related activity computerization application. therefore, they found it easy to use the application with no need for great efforts. this research result did not support handayani and harsono’s finding (2016). this research showed that computer self-efficacy had no significant influence on perceived ease of use. this meant that the respondents thought that their ability in operating computer did not affect the ease of e-learning application. new technologies such as internet use, either for e-learning or other purposes have been closest part of human life. nowadays, e-learning has been an independent technology where its users can use media other than computer to access it. this led to the respondents’ belief that computer self-efficacy had no influence on perceived ease of use of e-learning. this research confiemd the study conducted by nurhayati (2011). this research also showed the direct influence of computer anxiety on perceived ease of use of elearning. the standardized coefficients value indicated a negative number, meaning that computer anxiety negatively influenced perceived ease of use of e-learning. the lower an individual’s anxiety in using computer, the higher their perceived ease of use in using e-learning. this result was supported by the research conducted by saade & kira (2009) which found the negative effect of computer anxiety on perceived ease of use. computer self-efficacy (y) in this research did not mediate the relationship between computer anxiety and perceived ease of use (z). this was indicated by the value of indirect influence between computer anxiety on perceived ease of use through computer self-efficacy whose value was less than the direct influence of computer anxiety on perceived ease of use.this research did not support saade and kira’s (2009) research, where it was found that computer self-efficacy had a significant mediating influence to lessen anxiety of lms (learning management system) utilization. influence of age on perceived ease of use of e-learning through computer self-efficacy based on xyz generation theory, most accounting lecturers at x university were included into x and y generations. the x generation was those born in 1965 to 1980. the years when those from this generation were born were the beginning of pc (personal computer) use, video games, cable tv, and the internet. the y generation was born in 1981 to 1994. this generation used instant communication technologies such as email, sms, instant messaging and social media such facebook and twitter. referring to this generation theory, it could be said that lecturers in younger generation were inevitably more familiar with technology advancement, particularly in terms of computer use. this had been proven by the research conducted by jum’ati and ismoyo (2014), where older respondents showed lower computer self-efficacy. unlike this thought, this research showed that respondent’s age had no influence on computer selfefficacy. the advancement of technology had benefited every individual from various ages. thus, computer self-efficacy was not just owned only by lecturers at a certain age range. not every individual at younger age had higher computer self-efficacy. this research result was supported by unlu and suel’s (2014) research which found that there was no significant relationship between age and computer selfefficacy. n.laily,f.s,riadani/journal of accounting and business education, 3 (2), march 2019 148 the technology advancement had demanded people to keep on learning new technologies and this applied to both younger and older lecturers. lecturers should be capable of using both computer and the internet to develop their teaching methods. therefore, age was not an obstacle for them to learn and use elearning as a teaching and learning method. the result of analysis using spss in chapter iv revealed that respondents’ age did not directly influence perceived ease of use of e-learning. this result was also supported by the research conducted by chung, et al (2010) who found that age did not affect perceived ease of use. based on the multiplication result, it was found that age had no influence on the perceived ease of use variable. this was proven by the greater value of direct influence coefficient of age on perceived ease of use than the indirect influence through computer self-efficacy variable. influence of gender on perceived ease of use of e-learning through computer self-efficacy. gender is one factor necessary to be investigated in relation to technology application. the theories from psychology and sociology fields suggested that gender difference in competence and use of information technology (the internet) occurred due to the sex-based role formation (mira, 1987). for example, when the society associates computer with man characteristics, then woman will avoide information technology. this leads to woman’s disadvantage in the field. rustiana (2004) proved that men’s ability in computer was better than women. this was because men generally had higher ability and willingness to make innovations and conquer challenges. based on the analysis in chapter iv, it was found that the self-confidence of accounting lecturers at x university in using computer was not influence by gender. this research confirmed the study conducted by unlu and suel (2014). this research showed the absence of direct influence of gender on perceived ease of use of e-learning. thus, the gender difference hypothesis which believed that men had better ability in information technology acceptance was not proven. this result supported the hypothesis or theory on demolishing gender stereotype which believed that currently the gender characteristics embedded to men and women were nearly the same, particularly in relation to information technology. the statement was made based on the fact that women were more likely to emulate men in terms of characteristics and capability at work. this testing result added another inconsistency with previous studies' results which obtained varied findings. this research confirmed the study conducted by belle, et al (2005). their research revealed the insignificant relationship in perceived ease of use of technology between men and women. computer selfefficacy (y) in this research did not successfully mediate the relationship between gender (x3) and perceived ease of use (z). this statement was indicated by the value of indirect influence of gender on perceived ease of use through computer self-efficacy whose value was less than the direct influence of gender on perceived ease of use. conclusion this research results indicated that, firstly, no significant influence was found of computer anxiety on perceived ease of use through computer self-efficacy; secondly, no significant influence was found of respondents' age on perceived ease of use through computer self-efficacy, thirdly; no significant influence was found of gender on perceived ease of use through computer self-efficacy. additionally, accounting lecturers at x university should improve their ability in computer, particularly those lecturer with low computer self-efficacy, since this research indicated that some lecturers still had low self-confidence in using computer, i.e. at a percentage of 42%. if they do just that then it will be helpful considering the increasingly rapid development of technology in education. references a-alak b.a & alnawas i.a.m. 2011. measuring the acceptance and addoption of e-learning by academic staff. knowledge management & e-learning: an international journal, 3(2) arikunto, suharsimi. 2006. prosedur penelitian: suatu pendekatan praktik. jakarta: bumi aksara n.laily,f.s,riadani/journal of accounting and business education, 3 (2), march 2019 149 bandura, a. 1982. 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auditor independence mediate the relationship between auditor rotation and audit quality? lutfi ardhani 1 bambang subroto 2 bambang hariadi 3 1 accounting department, faculty of economic, uin maulana malik ibrahim malang, indonesia 2,3 accounting department, faculty of economic, universitas brawijaya, indonesia email: lutfi.ardhani@uin-malang.ac.id doi: http://dx.doi.org/10.26675/jabe.v4i1.8145 abstract: this research was conducted based on issues related to the decline in public trust in the ability of auditors to produce quality audits. this study aims to provide empirical evidence about audit quality that is influenced by auditor rotation. this research aims at providing an empirical evidence of the influence of auditor rotation on audit quality. this is an explanatory study using 90 auditors in indonesia as its sample. the sample is taken using random sampling and the data are collected using questionnaire and interview with several auditors. the research results indicate that auditor rotation is not found to have direct influence on audit quality. the research also fails to provide empirical evidences of the role of auditor’s independence auditor as an intervening variable. nevertheless, the research does proves that auditor’s independence has positive influence on audit quality. keywords: auditor rotation, auditor’s independence, audit quality introduction the audit cases occuring around 2000s were mostly related to audit quality issues. this was what led to the modification of auditing standards to improve audit quality and at the same time regain the public trust on both the auditor and public accountant professions. however, this standard modification neither immediately prevented all violations from occuring nor improved the audit quality at once. the violation cases related to audit quality and involving auditors kept on occuring in indonesia. an example of the recent case occuring in indonesia was the audit of pt sunprima nusantara pembiayaan’s (snp finance) financial statements for 2012 to 2016 fiscal years which involved the public accountant marlinna, public accountant merliyana syamsul, and public accountant office (kap) satrio bing, eny & rekan (deloitte indonesia). in this case, the public accountants marlinna and merliyana syamsul had not completely complied with the audit standards-public accountant professional standards in performing the general audit of snp finance’s financial statements. meanwhile, kap satrio bing eny & rekan had neither well-defined policies nor procedures in the kap quality control system related to the threat of closeness of senior members of partnership team. in addition to those case, a case had just been releaded by pcaob (public company accounting oversight board) on 9 february 2017 which involved the public accountant office of ernst & young (ey) partner in indonesia, namely kap purwanto, sungkoro & surja with a telecommunication company journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ l. ardhani, b. subroto, b. hariadi/journal of accounting and business education, 4 (1), september 2019 2 for the result of financial statements audit of a year ending on 31 december 2011 which was not equipped with adequate evidences. for this case, kap ey partner was sentenced to pay a fine at us$ 1 million (around rp 13.3 billions) to us regulator. as a result of these continuously occuring violations, users of financial statements (investors, creditors, and others) began to re-question the existence of public accountant as an independent party in assessing the reasonability of financial statements issuing a highquality audit report (purnamasari, 2006). these scandals encouraged regulators (standards board) to find a way of minimizing the fraud and improving the quality of audit produced and thus the new standards known as isa (international standards on auditing) were applied. isa was adopted and implemented by indonesia per 1 january 2013 and it was epected to improve the auditor’s performance and eventually resulted in improved audit quality. one of kpmg partner stated that isa aimed at building understandable, well-defined standards which could be applied consistently to give higher ensurance in relation to the practice uniformity throughout the world. tuanakotta (2014) suggested that the reason why indonesia adopted isa could be seen from the market power and value added to be obtained for doing so. several major kaps had prepared themselves or even had implemented isa before iapi eventually adopted isa. these kaps generally had a global network, thus they were demanded to serve their global and international clients who had adopted the standards issued by the international federation of accountants (ifac). isa was also expected to improve the audit quality to allow existing and potential investors to have better financial statements. isa depicted transparent and high-quality auditing standard acceptable throughout the world (lindberg & seifert, 2011). previous studies used different measurement to assess audit quality since no accurate measurement was available yet in relation to audit quality. several researchers defined audit quality based on deangelo (1981) who explained that audit quality served as a probability for an auditor to find and report violations in the client’s accounting system. meanwhile, according to watkins, hillison, & morecroft (2004), audit could be said to have high quality if the auditor could give ensurance that there was neither material misstatements (no material misstatements) nor fraud in the financial statements audit. furthermore, the international auditing and assurance standards board (iaasb) built a framework for audit quality which consisted of such elements as input, process, output and key interaction within the financial reporting supply chain and contextual factors. this measurement was also used by robert knechel, krishnan, pevzner, shefchik, & velury (2013) who classified audit quality indicators into four, namely input, process, outcome and context. this research will use input, process and output to assess the audit quality in reference to iaasb. input is the competence/expertise an auditor should have such as education, knowledge and experience. meanwhile, process is an auditor’s activities when performing the audit. finally, output is the judgment issued by an auditor as the audit process comes to an end. audit quality is influenced by external and internal factors with the internal ones being from the auditor. one of the external factors allegedly influencing audit quality is auditor rotation. chi, (2011) found that the auditor rotation used to mitigate the impact of audit tenure could improve audit quality. meanwhile, an auditor’s independence is classified as an internal factor which can influence audit quality auditor rotation is suspected to influence audit quality with auditor’s independence serving as an intervening variable. research result indicated that the low independence of auditors in egypt made auditor rotation compulsory to be done in order to improve independence and eventually the audit quality (mohamed & habib, 2013). the auditor rotation obligation in indonesia is governed in law no. 5 year 2011 article 4 paragraphs 1 and 2 which state that the provision of audit service by public accountants and/or kap to a client’s historical financial information for some fiscal years in a row can be limited within a certain period of time. on 6 april 2015, the government had issued the government regulation (pp) no. 20 year 2015 concerning public accountant practice (pp 20/2015) which constituted a further arrangement of law no. 5 year 2011 concerning public accountant article 11 paragraph (1) which explained that the provision of audit service to historical financial information as referred to in article 10 paragraph (1) point a of an entity by a public accountant was limited not longer than 5 (five) consecutive fiscal years. l. ardhani, b. subroto, b. hariadi/journal of accounting and business education, 4 (1), september 2019 3 independence has always been an interesting topic since many studies have proven that currently an auditor’s independence is subjected to questions due to the large number of cases which involved auditors. this is possible due to the “special relationships/closeness” between clients and the auditors who have alliance for a very long time, resulting in the auditor’s decreasing objectivity and independence to the client. to mitigate this closeness between auditors and clients, pp 20/2015 article 11 paragraph (1) required auditors to rotate in which an auditor was not allowed to audit for the same client for 5 consecutive years. this is to maintain an auditor’s independence to allow high quality audit. the tighter the compulsory rotation is done by kap for its auditor, the higher the independence of an auditor and the higher the audit quality (copley & doucet, 1993). the result of research conducted by dattin (2017) in france showed that the mandatory auditor rotation could improve auditor’s independence, yet it did not significantly influence the audit quality. this is because of the difficulty in evaluating the effectiveness of system in france in improving the audit quality due to the limited number of studies on that matter. this research finding contradicted tobi, osasrere, & emmanue (2016) who successfully proved that audit quality could be improved by rotating auditors and daniels & booker (2011) who also succeeded in finding that auditor rotation could influenced auditor’s perceived independence and audit quality. however, onwuchekwa, erah, & izedonmi (2012) found an empirical fact that auditor rotation had negative effect on audit quality. these studies with varied empirical evidences give other researchers a chance to develop a model and re-test the correlation between auditor rotation, auditor’s independence and audit quality. moreover, patrick, zayol, kukeng vitalis (2017) reviewed some literatures related to the relationship between independence and audit quality. their review results revealed that auditor’s independence is one of the important determinants which influenced audit quality. this confirms the theory of attribution which suggests that the behavior of a person (in this research an auditor) is influenced, among other things, by external factors, in this case auditor rotation. an auditor is more likely to perform better when external pressure in the form of rotation-related regulation is present. this research is a development of previous studies which failed to prove the accurate and clear-cut correlation between auditor rotation, auditor’s independence and audit quality. in this research, auditor’s independence is treated as an intervening variable which mediates the correlation between auditor rotation and audit quality, rather than an independent variable with direct influence on audit quality. based on the explanation and studies mentioned above, the researcher makes a justification which later needs to be proven and re-tested that audit quality is influenced by auditor’s independence in performing financial statements audit and the auditor’s independence will also improves if kap performs the compulsory rotation to their auditors to produce high-quality audit reports. . literature review and hypotheses agency theory watkins et al., (2004) suggested there were four drivers which could influence audit quality. two drivers were from the demand side and two other drivers came from the supply side. the drivers from the demand side were client’s risk strategy and agency conflict. meanwhile, the drivers from supply side were the auditor risk management strategy and audit fee. from watkins et al., (2004) opinion above, it can be seen that agency conflict can also play a role of a driver of audit quality. in agency theory, it is suggested that the function of auditing is a mechanism to mitigate agency conflict between managers who act as the agent and the company owners as the principal. both parties need an auditor to minimize information asymetry between the owners and the managers. the bigger the agency conflict is, the higher the agency cost, and the higher the demand for quality auditor would be. an important note of the analysis performed by watkins et al. (2004) is that the agency conflicts are varied between companies and from time to time. the agency conflict occuring in a company whose owners and managers are not separated or relatively not separated is different from the agency conflict occuring in a company whose managers and owners are separated. therefore, the influence of agency l. ardhani, b. subroto, b. hariadi/journal of accounting and business education, 4 (1), september 2019 4 conflict on audit quality or demand for audit quality will also be varied in each company. the agency theory proposed by jensen & meckling (1976) explains the agency relationship between the principal as the owner or shareholders and the manager who acts as an agent. managers are contracted by the principal to work for the principal’s interest and to report to the principal. if the agent and the principal work and share the same goals, i.e. to maximize the company's value, it can be said that the agent acts in favor of the principal’s interest. watts & zimmerman (1990) argued that the financial statements made in accounting numbers were expected to minimize the conflict among the parties in interests. using the financial statements reported by the agent as a form of their performance accountability, the principal can assess, measure and monitor to what extent the agent has acted and worked to improve the principal welfare and as the basis for providing compensation or bonus to the agent. in company where owner as the principal and the manager as an agent who runs the company are separated (not a company managed by the owner themselves) agency problems are frequently occuring since it is assumed that each of the parties tries to maximize their utility functions. the principal and the agent are assumed to constantly act rationally based on their respective economic interests. this wish to maximize their respective economic benefits will cause a clash of interests between them (conflict of interest). the principal is assumed to always want to maximize the organization goal achievement such as company profit and willing to take the risk or at least risk neutral. meanwhile, the agent is assumed to always put his/her interests to obtain compensation/bonus and avoid risk (risk averse) first. in the principal point of view, the compensation given to the agent is based on the result, yet in the agent’s perspective, the compensation system should not consider merely the result, rather the effort made should also be taken into account. the problem in this relationship is known as asymmetry information, where the agent is in possession of more information on the company than the principal, making the principal unable to determine whether or not the efforts made by the agent had been actually optimal. these agency problems lead to the principal’s need for an independent third party (in this case an auditor) who will assess the reasonability of financial statements made in the form of accounting numbers prepared by the agent in order to minimize the potential conflict between the parties in interest. the appointed auditor is required to have independence to allow him/her to bridge the interests from both the principal and the agent. this way the principal would know the actual condition of their company and assess the agent’s performance and the agent would receive the compensation/bonus based on his/her performance. the existence of this independent auditor in the relationship between the principal and the agent is also intended to facilitate the creditor and government’s interest at the same time. from the audited financial statements, the creditor can see the feasibility of the company to receive loans and the government can see the implementation of its policies (such as taxation) in the relevant company. atribution theory attribution theory studies the process of how an individual interpret an event, reason or cause of their behavior. this behavior was developed by heider (1958) who argued that one’s behavior was determined the combination of two factors, i.e. internal and external factors. the term internal factors meant the factors from within oneself such as ability or effort and the external factor meant those from beyond oneself. based on this theory, an individual will be motivated to understand their surrounding environment. for example, an employee can be a disciplined worker since discipline has been their characteristics or maybe because of other factors beyond them, they are disciplined since the circumstance requires so, such as when the are afraid of being fired or prevented from being promoted by the company if they are disciplined. if we see/conclude that this individual does something due his/her personality (disciplined), then we have made an internal attribution. yet, if we see or conclude that what this individual does is due to the pressure of a certain circumstance (afraid of being fired or prevented from being promoted) then we have done an external attribution. in research on behavior, this theory is applied using internal locus of control and external locus of control. in this research, the attribution theory is used to explain how internal and external factors influence an auditor’s behavior. the internal factors in this research’s context is auditor’s independence and the auditor rotation is the external factor which may l. ardhani, b. subroto, b. hariadi/journal of accounting and business education, 4 (1), september 2019 5 influence the auditor’s behavior; these factors will influence the quality of audit produced by the auditor (lubis, 2010). influence of auditor rotation on auditor’s independence auditor rotation is auditor interchange to audit a company. auditor rotation can be voluntary or mandatory. the voluntary auditor rotation happens if a company (client) voluntarily changes its auditor themselves and the mandatory auditor rotation occurs if it is required by rules. in indonesia, auditor rotation is mandatory under the law no. 5 year 2011 and pp 20/2015 which state that public accountants are allowed to audit a client only for 5 consecutive fiscal years. the issue of audit rotation has been an interesting topic since auditor rotation is tightly related to independence. auditor rotation is claimed as one of ways to improve independence since being limited to audit a client thus this auditor’s independence can be maintained. research on auditor rotation conducted by chi (2011) found that the auditor rotation used to mitigate the impact of audit tenure could improve audit quality. this indicates that auditor rotation can reduce their closeness to and familiarity with the client which are suspected to decrease their professionalism scepticism and independence. meanwhile, coyle (2010) who studied 20 kaps and interviewed the regulators found that audit rotation is a way of improving auditor’s independence. mohamed & habib ( 2013) also showed that the low independence of auditors in egypt made the auditor rotation mandatory in order to improve their independence and eventually the audit quality. based on the explanation above, it can be concluded that an auditor’s independence will be maintained if the company rotate their auditors. this is in line with the attribution theory which suggests that one's behavior is affected by two factors, namely internal and external factors. auditor rotation is one of external factors which influences an auditor’s independence. as suggested by coyle (2010), audit report is the final result of audit process. based on this explanation, it is therefore hypothesized as follows: h1: auditor rotation positively influences auditor’s independence influence of auditor’s independence on audit quality the auditor profession is tightly related to independent attitude. independence is an objective, impartial and unbiased attitude. independence in minds is an old requirement that a member should be independent in fact. meanwhile, independence in appearance is the interpretation of independence in fact. if an auditor in independent in fact yet the user believes that when an auditor becomes an advisor for the client, most of the values of audit function have vanished. from the agency theory perspective, the auditor profession plays a highly important role to minimize agency conflict between the principal and the agent. the agency theory proposed by jensen & meckling (1976) explains the agency relationship between the principal as the owner or shareholders and the manager who acts as an agent. managers are contracted by the principal to work for the principal’s interest and to report to the principal. if the agent and the principal work and share the same goals, i.e. to maximize the company's value, it can be said that the agent acts in favor of the principal’s interest. however, in fact agents not necessarily act for the principal’s interests. agents are assumed to keep on trying to maximize their own interests hence an agency conflict occurs. these agency problems lead to the principal’s need for an independent third party (in this case an auditor) who will assess the reasonability of financial statements made in the form of accounting numbers prepared by the agent in order to minimize the potential conflict between the parties in interest. the appointed auditor is required to have independence to allow him/her to bridge the interests from both the principal and the agent. it is suspected that independence influences audit quality. the higher the independence of an auditor, the higher the quality of audit he/she produces. on the contrary, the less independent an auditor, the less likely for him/her to produce a high quality audit since the auditor is less likely to be serious in finding and identifying material errors/frauds. even if the frauds are found, it is highly likely that the auditor will not report them. patrick, zayol, kukeng vitalis (2017) reviewed some literatures related to l. ardhani, b. subroto, b. hariadi/journal of accounting and business education, 4 (1), september 2019 6 the relationship between independence and audit quality. their review results revealed that auditor’s independence was one of the important determinants which influenced audit quality. this review was made in nigeria, particularly in banking sector. the research also suggested further investigation on the relationship between auditor’s independence and audit quality beyond nigeria. this research finding is supported by the research conducted by zamzami, tantri, & timur (2018) who found that auditor’s independence positively influences audit quality. from the explanation above, it is hypothesized as follows: h2: auditor’s independence positively influences audit quality influence of audit rotation on audit quality with independence as an intervening variable auditor rotation also has some influence on audit quality through independence. this is supported by tobi et al., (2016) who had successfully proved empirically that auditor rotation had positive significant influence on audit quality through independence. this means if kap rotates their auditors, it is more likely for an auditor’s independence to be maintained, hence the auditor would perform well during the audit process and, eventually, the audit quality would be high. according to attribution theory, auditor rotation can be classified as an external factor which might influence an auditor’s behavior since auditor rotation is set forth in regularions which require every company to rotate their auditors not longer than 5 years in a row. in this case, auditor rotation as an external factor will indirectly influence an auditor’s behavior in producing high quality audit. coyle (2010) provided empirical evidence that audit rotation is a way to improve an auditor’s independence. unlike coyle (2010) and tobi et al., (2016) , velte & stiglbauer, (2012) found no correlation between audit quality and auditor rotation. this research result shows that an auditor’s independence improvement cannot be obtained solely by rotating auditors. in line with velte & stiglbauer (2012), lopo & aldecir, (2014) did not found the correlation between audit rotation and audit quality either in brazil. therefore, it can be hypothesized as follows: h3: auditor rotation positively influences audit quality with independence as an intervening variable methods this research uses quantitative approach and is classified as explanatory research, i.e. research which tries to explain the causal relationship between research variables through hypothesis testing. the data used in this research are primary and secondary data. the secondary data are obtained from the website of pppk of ministry of finance on may 2016, previously known as ppajp to obtain data on the number of kaps throughout indonesia and the primary data are those obtained directly from the subjects, i.e. auditors. the sample used is 90 auditors in indonesia. the data are collected using questionnaire and interview and the analysis using path analysis. results the first hypothesis proposed in this research is that auditor rotation (x1) positively influences auditor’s independence (y1). based on the table, it can be seen that the t statistic value at 0.905 with significance of 0.368 is greater than the p value 0.05, thus ho is accepted, meaning that the path coefficient is insignificant. the result of data analysis can be seen in the following table: table 1. regression results variable sig t statistic decision auditor rotation 0,368 0,905 h0 accepted auditor independence 0,000 6,465 h0 rejected l. ardhani, b. subroto, b. hariadi/journal of accounting and business education, 4 (1), september 2019 7 the second hypothesis proposed in this research is that there is a positive influence of auditor’s independence on audit quality. based on the table, it can be seen that the t statistic value of 6.465 with significance of 0.000 is less than p value 0.05, hence ho is rejected, meaning the path coefficient is significant. therefore, it can be concluded that auditor’s independence positively influences audit quality. the third hypothesis proposed in this research is that there is positive influence of auditor rotation on audit quality with auditor’s independence as an intervening variable. based on table 2, it can be seen that there is no direct influence of auditor rotation on auditor’s independence as indicated by a significance of 0.368, which is greater than p value 0.05 at a standardize coefficient (beta) value of 0.096 and there is a direct influence of auditor’s independence on audit quality at a significance of 0.000 and the beta value of 0.567, thus the total influence of audit rotation on audit quality through auditor’s independence is 0.005 (0.096 x 0.55). therefore, it can be concluded that there is no indirect influence of audit rotation on audit quality through auditor’s independence. the result can be seen in the following table. table 2. path coefficient, direct influence, indirect influence and total influence influence variable path coefficient direct influence indirect total x on y 0.096 0.096 0.096 y on z 0.567 0.567 0.567 x on z through y 0.096 0.567 0.055 0.005 discussion influence of auditor rotation on auditor’s independence the research result indicates that the auditor rotation variable has no influence on auditor’s independence. from this finding, it can be interpreted that auditor’s independence is not influenced by the presence or absence of rotation. this means that auditor will still maintain their independence even if there is no any rotation. mautz & sharaf (1962) suggested that the lengthy relationship between an auditor and his/her client would influence his/her independence since his/her objectivity would decrease as time went. basically, the auditor rotation made kaps is expected to improve auditor’s independence since it helps reduce behavioral threats which may decrease their independence which may eventually lower the audit quality. however, on the other hand, from the interviews with several auditors, it is revealed that it is highly likely for an auditor to miss something (audit evidence) in their first year of performing an audit. for this reason, they think there is no need for a compulsory rotation. auditors are demanded to understand the client business thoroughly before performing the audit and this cannot be done by an auditor only at the beginning they doing the audit thus a new auditor has no adequate knowledge on the client’s business operation, resulting in the auditor failing to detect material misstatement in the financial statements due to lack of information. in addition, new assignment will increase costs and thus increases the overal audit costs and rotation poses risk of audit below the standards for the auditor has not really known their clients. the overal data analysis shows that most auditors who serve as the respondents had never been rotated when doing the audit at 52 auditors or 57.78%. it is possibly because the respondents in this research are mostly junior auditors working for less than 2 years, hence they have never been rotated. this research result is in line with the studies conducted by tobi et al., (2016) and velte & stiglbauer, (2012) who failed to find the relationship between auditor rotation and independence and audit quality. this research result shows that an auditor’s independence cannot be improved only by rotating them. also confirming velte & stiglbauer (2012) research, lopo & aldecir (2014) also failed to find the relationship between audit rotation and audit quality in brazil. furthermore, mansi, maxwell, & miller (2004) suggested that investors at capital markets expected surprisingly preferred auditors with longer experience l. ardhani, b. subroto, b. hariadi/journal of accounting and business education, 4 (1), september 2019 8 and learning with a company considering that the risk encountered by the company also increases, hence the longer relationship between auditors and client is more preferred by the investor for finding material misstatement without unnecessarily concerning any lowered independence. the research result does not support the research conducted by chi (2011) who found that the auditor rotation used to mitigate the impact of audit tenure could improve the audit quality and coyle (2010) who studied 20 kaps and performed interviews with the regulators found that audit rotation was a way of imrpoving auditor’s independence and mohamed & habib (2013) on the need for rotation to improve auditor’s independence. this research result also contradicts the research conducted dattin (2017) in france who douns that the auditor rotation obligation could improve auditor’s independence yet insignificantly influenced the audit quality. direct influence of auditor’s independence on audit quality the fifth hypothesis which states that there is a positive influence of auditor’s independence on audit quality is accepted. this can be interpreted that the higher the auditor’s independence the higher the quality of audit produced. the respondent answers on the independence variable shows a very high value at 46.9%, meaning that respondents perceive themselves independent. this independence is shown in three dimensions, namely firstly, programing independence i.e. independence from control or influence in choosing the audit techniques and procedures and the their development in their application. this means that the auditor is free to decide on their own programs, both the steps and the amount of jobs to be performed. the second dimension is investigative independence, i.e. the independence in determining the area, activity, personal relationship, and managerial policies to be tested. the third dimension is reporting independence, i.e. the independence in giving statement of fact generated from the testing or recommendation or opinion as the final outcome of the audit process when an auditor has high independence as reflected in those three dimensions, the quality of audit will also be high. currently, an auditor is demanded to be capable of winning back the public trust considering the great number of cases which involve auditors and thus question their independence. this research result supports the result of research conducted by patrick, zayol, kukeng vitalis,(2017) who reviewed some literatures related to the relationship between independence and audit quality. their review results revealed that auditor’s independence is one of the important determinants which influenced audit quality. this review was made in nigeria, particularly in banking sector. the research also suggested further investigation on the relationship between auditor’s independence and audit quality beyond nigeria. this research finding is supported by the research conducted by zamzami et al. (2018) who found that auditor’s independence positively influences audit quality. audit quality would improve if the auditor performing the audit had high independence. indirect influence of auditor rotation on audit quality with auditor’s independence as an intervening variable the third hypothesis proposed in this research which states that there is a positive influence of auditor rotation on audit quality with auditor’s independence as an intervening variable is rejected. the research result shows that auditor’s independence is proven not mediating the relationship between auditor rotation and audit quality. this means audit quality is not influenced by rotation which aims to improve auditor’s independence. many previous studies argued that the audit quality and auditor’s competence will decrease as the time goes since the auditor has built a closeness/special relationship with the client and, as a consequence, they will lose their professional scepticism. however, the interview reveals that rotation does not necessarily have impact on audit quality since audit failure is more likely with auditor rotation. the reasons is that replacing the old with the new auditors will take some time and costs higher to grasp what the client business is. in addition, the minimum knowledge of newly appointed auditor on the client business also lower his/her meticulosity and punctiliousness in detecting material misstatements in the l. ardhani, b. subroto, b. hariadi/journal of accounting and business education, 4 (1), september 2019 9 financial statements and thus will affect the quality of audit he/she produces and the opinion he/she issues. the research result does not support castellani (2008) research who stated that the very existence of auditor rotation will improve the auditor’s independence and eventually the audit quality will improve. however, the research result is in line with the research conducted by tobi et al. (2016) , velte & stiglbauer (2012) who failed to find the relationship between auditor rotation and independence and audit quality. this research result showed that an auditor’s independence improvement could not be obtained only by rotating auditors. in line with (velte & stiglbauer, 2012) research, (velte & stiglbauer, 2012) also failed to find the relationship between audit rotation and audit quality in brazil. conclusion this research tests the influence of auditor rotation on audit quality with auditor’s independence as an intervening variable. based on the research result, it can be concluded that audit quality is influenced only by auditor’s independence, and auditor rotation has no influence on the auditor’s independence and, furthermore, it does not influence the quality of audit produced. this indicates that basically auditors are independent and demanded to remain independent in every assignment, free from any influence of closeness with clients (which is attempted to be mitigated using auditor rotation) so that they will produce high-quality audit report. references arens, a. a., & loebbecke, j. k. 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(2018). effects of auditor independence and experience, size of client’s financial health and audit fee on audit quality: an empirical study on public accounting firms in indonesia. journal of economics, business and management, 5(1), 69–73. https://doi.org/10.18178/joebm.2017.5.1.488. b. f. arianti/journal of accounting and business education, 4 (2), march 2020 the effect of independent commissioner’s moderation of csr and institutional ownership on tax avoidance baiq fitri arianti accounting undergraduate study program, faculty of economics, universitas pamulang, indonesia email: akt.fitri1983@gmail.com doi: http://dx.doi.org/10.26675/jabe.v4i2.8271 abstract: this research aims at providing empirical evidence of the effects of corporate social responsibility (csr) and institutional ownership on tax avoidance with independent commissioner as the moderator. the study’s population is 66 mining and agricultural companies listed in the indonesia stock exchange from 2013 2017. employing a purposive sampling technique, 10 mining and agricultural companies are taken as the samples out of 50 annual reports from 2013 2017 observed. the research employs the moderated regression analysis (mra) as the data analysis technique. the research results indicate that corporate social responsibility (csr) variable does not influence tax avoidance and institutional ownership variable influences tax avoidance. independent commissioner may weaken the effect of corporate social responsibility (csr) on tax avoidance and strengthen the effect of institutional ownership on tax avoidance. the implication of this research is to examine the importance of tax payment and expectedly increase the community’s awareness, especially related parties, of the obligation to pay their taxes appropriately and, with the research’s results, the public is expected to be aware of the importance of paying taxes, especially large companies, so as not to take tax avoidance measures for indonesia’s improved and stable economy. keywords: corporate social responsibility, institutional ownership, tax avoidance, independent commissioner introduction tax is the most potential source of state revenue occupying the highest percentage in the state budget (apbn) compared with any other sources. in this regard, the government, particularly the directorate general of taxes (djp), is expected to optimize state revenue through its functions in driving sustainable and equitable economic growth. companies also tend to search for a way to reduce the amount of tax they have to pay (ngadiman & puspitasari, 2014). to reduce the amount of tax they should pay, company may reduce the tax value in compliance with prevailing tax regulation (tax avoidance) or reduce the tax value by committing unlawful act (tax fraud) (maraya & yendrawati, 2016). the existing field facts show that until now state tax-revenue is not maximal yet. minister of finance, sri mulyani, acknowledges that the trend of tax receipt in indonesia has declined. current realization of tax receipt is lower than target state budget (apriliyana & suryarini, 2018). journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v4i2.8271 b. f. arianti/journal of accounting and business education, 4 (2), march 2020 99 table 1. realization of state revenue in 2016 – 2018 (in trillion rupiahs) year apbn target apbn realization decline percentage 2016 rp 1,355 rp 1,141.45 rp 213.55 118.7 % 2017 rp 1,284 rp 770,7 rp 513.3 166.6% 2018 rp 1,350 rp 1,424.00 rp 74 94.8 % source: ministry of finance (2019) table 1 above shows that the declining amount of realization indicates that tax receipt is not optimal yet, causing a presumption that the tax payers avoid taxes. in addition, tax also contributes the highest proportion to the state revenue in apbn. however, indonesia is classified into a state with mid-lower revenue with an average tax ratio of 19% -26% from gross domestic product (gdp). the budget analysis bureau and secretary general of implementation of dpr-ri state that according to the data issued by the national public procurement agency (lkpp), the indonesia’s tax ratio increases in the period 2002-2012 from 11.5% to 13.3% in 2009. the tax ratio declines to 11.1% in 2009 and consistently increases to 11.9% in the period 2011-2012. imf explains that indonesia’s actual tax revenue relatively to gdp is the lowest among the g-20 countries, including other developing countries. sri mulyani, minister of finance of the republic of indonesia, explains that indonesia’s tax ratio is still lower than 11% in 2016, the world’s lowest tax ratio (aini & sutejo, 2017). based on the foregoing phenomena, there is clearly an indication of tax avoidance by individual and corporation taxpayers. however, this research focuses on corporation taxpayer. according to the research conducted by apriliyana & suryarini (2018), companies in indonesia indicate that they avoid tax, as may be observed with the existence of tax amnesty program policy starting from july 1, 2016 to march 31, 2017. meanwhile, according to the research conducted by lin, cheng & zhang (2015), companies tend to view tax payment as an important social obligation in regions without advanced market economy, law infrastructure and lacking professional mediator, unethical awareness of and commitment to social obligation, lack of trust in the government, and consequence of low cost from customer. however, these companies may be involved more in other low cost csr activities in balancing negative view related to their aggressive tax reporting. companies’ good corporate governance mechanism is directly proportional to their compliance with fulfillment of tax obligation (sandy & lukviarman, 2015). another form of the implementation of the good corporate governance (gcg) concept is to apply the corporate social responsibility (csr). corporate social responsibility is a phenomenon of company’s strategy to accommodate its stakeholders’ needs and interests (maraya & yendrawati, 2016). bigger proportion of independent commissioners in the structure of board of commissioners will present better supervision and may limit management’s chances of fraud (raharjo, 2014). independent commissioner in a company may also give instructions and directions in managing the company and formulating corporate strategy better, including in determining policies related to effective tax rate to be paid by company. this is different from the research conducted by meila & devi (2018) which states that independent commissioner significantly influences tax avoidance. institutional ownership indicates a comparative ownership. institutional ownership in a company will drive more optimal supervision of management’s performance, since shareholding represents a source of power which may be exercised in support of the management or otherwise. the higher the investment value placed in an organization, the higher the monitoring system in the organization is, thus institutional ownership influences tax avoidance (diantari & ulupui, 2016). company’s involvement in tax avoidance practice becomes something common and legal to be performed by companies, but is not desired by the government (budhi & noviari, 2017). the government expect companies to pay their taxes without tax avoidance mechanism. company’s effort to optimize corporate profit remains company’s reason for performing tax avoidance, which is deemed bad for the society. many csr researches on tax avoidance have been conducted, such as that conducted by ningrum et al., (2018) which discusses relationship between csr disclosure on tax avoidance and etr (effective tax rates) proxy. another research conducted by muzakki (2015) shows that corporate social b. f. arianti/journal of accounting and business education, 4 (2), march 2020 100 responsibility (csr) significantly influences tax avoidance. higher disclosure of corporate social responsibility (csr) will reduce company’s tax avoidance practice. therefore, the higher the csr disclosure, the higher the tax avoidance is conducted. in the context of indonesia, there is no research conducted related to csr and institutional ownership on tax avoidance, especially in connection with independent commissioner. the indication of tax avoidance practice in foreign investment company sector, indonesia’s low tax ratio compared to that of some asean countries and mining sector’s low tax ratio compared to the national tax ratio as well as the tax audit findings on some mining companies leading to tax deficiency notice are phenomena which represent tax avoidance attempts (hidayat et al., 2016). from the perspective of psychological theory, namely the theory of planned behavior, in relation to tax avoidance, companies should be willing to pay their taxes, thus this variable also influences the three variables: csr, institutional ownership and independent commissioner. meanwhile, according to the agency theory and the stakeholder theory, in relation to csr, independent commissioner and institutional ownership on tax avoidance, every company should perform their activities not only for the sake of shareholders, but also all stakeholders, including the government through compliance with tax obligation and non-performance of tax avoidance. the phenomena and research above encourage the author to perform a research on the topic of tax avoidance and use the effective taxes rate (etr) proxy. etr is the effectiveness of corporate tax payment which reflects the amount of tax avoidance on the calculated tax rate on corporate profit. etr represents the percentage of company’s actual tax payment from its commercial profit. the lower the etr value, the higher the tendency of a company to perform tax avoidance. this research is conducted aiming at empirically describing and explaining the influence of csr and institutional ownership on tax avoidance as well as the influence of independent commissioner. this research is regarding the moderation effect of independent commissioner of csr and institutional ownership on tax avoidance and supports the research conducted by amalia (2019) proving that there is positive correlation of csr disclosure with tax avoidance, differently from the researches conducted by jamei (2017), gulzar et al., (2018) and apriliyana & suryarini (2018) showing that there is no significantly correlation between the number of board members, proportion of non-assigned members, institutional ownership and tax avoidance or institutional ownership and csr quality does not influence corporate tax avoidance with tax rate as the indicator. literature review and hypotheses csr is important to company, and the government, serving as the regulator, is one of company’s stakeholders. therefore, company should regards the government’s interest. the theory of planned behavior in relation to tax avoidance behavior in this research states that companies are to abide by and comply with all regulations established by the government, fulfill tax payment and not perform tax avoidance (ningrum et al., 2018). the agency theory in relation to institutional ownership also separates management and shareholders. the purpose of this separation is for effective and efficient corporate management in employing the best agent to manage the company. meanwhile, according to the stakeholder theory in relation to corporate social responsibility, it is a form of corporate social responsibility to all of its stakeholders. therefore, corporate social responsibility is important to company. corporate social responsibility corporate social responsibility (csr) is a mechanism in company aiming at integrating company’s concern about or care of surrounding environments and company’s interaction with stakeholders more than social responsibility, particularly in law. corporate social responsibility is based on the idea that company does not only have economic and legal responsibilities, but also responsibilities to other concerned parties (stakeholders) (purnomo & widianingsih, 2012). in indonesia, corporate social responsibility is regulated in law no. 40 of 2007 on limited liability company article 74 that “company operating in business activities in the field of and/or related to natural resources is obliged to perform social and environmental responsibilities”. b. f. arianti/journal of accounting and business education, 4 (2), march 2020 101 institutional ownership institutional ownership is institution with big interest in share investment in a company (laily, 2017). existing institutional ownership in a company results in supervision by the institution with shareholding in the company by monitoring the management’s performance, including tax avoidance practice. the research conducted by ngadiman & puspitasari (2014) states that institutional ownership is shareholding percentage by institution party. dewi & jati (2014) supportively argue that institutional ownership is the party to monitor company with big institutional ownership (more than 5%), identifying its high capability to monitor the management. the institution may be in the form foundation, bank, insurance company, investment company, pension fund, limited liability company (pt) and other institution. existing institutional ownership in a company will encourage more optimal supervision over the management’s performance. because of corporate responsibility to shareholders, institutional owner has incentive to ensure that corporate management makes decision which will maximize shareholder’s welfare. independent commissioner independent commissioner is defined as an individual unaffiliated in any regards to controlling shareholders, unaffiliated to any director or board of commissioners, and not assuming director position in related company. in indonesia stock exchange, there is a regulation that a company must have independent commissioners at least 30% of the board of commissioners, thus the supervision may be performed in such a way (annisa & kurniasih, 2012). board of commissioners may consist of one or more person. board of commissioners is an assembly, that in case the board of commissioners consists of more than 1 (one) member, each member of board of commissioners cannot act individually, but under board of commissioners’ decision. the number of members of board of commissioners may be regulated in company’s articles of association. in addition, company may regulate 1 (one) or more independent commissioners and 1 (one) delegated commissioner. tax avoidance laily (2017) defines tax avoidance as taxpayer’s act to unclearly violate the law, although it is sometimes clearly interpreted as law not according to law makers’ purposes and objectives. tax avoidance is a tax avoidance activity while abiding by prevailing rules, which means that tax avoidance is performed under corridor of tax laws and regulations. tax avoidance or tax resistance is a constraint in tax collection, causing state treasury’s reduced revenue (bachtiar, 2015). tax avoidance is company’s attempt to minimize the amount of tax it have to pay by lowering corporate profit. tax avoidance means tax avoidance attempt legally and safely performed by taxpayer since it is not contradictory to tax provisions, in which the method and technique used tends to utilize existing weaknesses (grey area) in tax laws and regulations, in order to minimize the amount of payable tax (agustina & aris, 2017). company which performs tax avoidance is deemed socially irresponsible. the correlation between independent variable (corporate social responsibility and institutional ownership), independent commissioner moderation variable and dependent variable is that tax avoidance may be described in the following research model: b. f. arianti/journal of accounting and business education, 4 (2), march 2020 102 figure 1. the correlation between independent and dependent variable corporate social responsibility on tax avoidance csr is a form of company’s responsibility to all of its stakeholders. tax is one form of corporate social responsibilities to stakeholders through the government. when company performs tax avoidance, its reputation will be prejudiced in the society’s and stakeholders’ perspective. company’s decision to reduce its tax rate or perform tax avoidance is influenced by its attitude towards csr. company performs csr for the society’s positive support in maintaining its survival. company is demanded to perform its activities pursuant to prevailing values and norms in the society. company with good reputation will maintain its reputation by performing responsibility for its activities and not performing tax avoidance practice or in case company is involved in tax avoidance, it is socially irresponsible. this shows that the more a company discloses its csr, the lower its tax avoidance level is. the research conducted by ningrum et al., (2018) shows correlation or csr with tax avoidance, in which the higher a company’s csr disclosure level, the lower its tax avoidance level is. based on the explanation, this research takes the following hypothesis: h1: corporate social responsibility influences tax avoidance institutional ownership on tax avoidance institutional ownership is shareholding by the government, foreign investor, insurance company or bank with bigger role in supervision over corporate management (dewi & jati, 2014). corporate management, besides fulfilling company’s interest, must also consider institutional parties’ interest. this is supported by the stakeholder theory, that the existence of company is determined by stakeholders. company will consider shareholders’ interest because of company management’s moral commitment to stakeholders, and this moral commitment will encourage company to formulate corporate strategy (taking stakeholders’ interest into account), in which corporate strategy will influence corporate financial performance (indriawati, 2017). tax avoidance is an example of strategies used by corporate management in improving corporate profit. institutional ownership should be able to prevent corporate management from performing tax avoidance since it plays an important role in controlling and influencing managers, but pressure from institutional parties not to fulfill its interest may cause corporate management to perform tax avoidance to improve the profit. this research supports the research conducted by mahdi & fariba (2013) that institutional ownership positively influences tax avoidance. based on the explanation, this research takes the following hypothesis: h2: institutional ownership influences tax avoidance independent commissioner moderates corporate social responsibility on tax avoidance independent commissioner is part of board of commissioners derived from independent party (unaffiliated to company). there is a tendency that the higher the ratio of independent commissioners, the h1 corporate social responsibility (x1) independent commissioner (z) institutional ownership (x2) h2 tax avoidance (y) h3 h4 b. f. arianti/journal of accounting and business education, 4 (2), march 2020 103 lower the tax avoidance is performed by corporate management. bapepam regulation requires the proportion of independent commissioner of only 30%. the more the number of independent commissioners, the higher its influence in supervision over management’s performance is. this supervision may reduce any arising agency issues like management’s opportunistic attitude towards tax burden reduction. with stronger supervision, management will more carefully make decision and transparently operate the company, thus tax avoidance may be minimized for the company to maintain its survival. the research conducted by simorangkir et al., (2018) states that it is important for independent commissioner to monitor corporate behaviors or attitudes and decisions in consideration of the needs of the society and in compliance with prevailing regulations where company operates its business. therefore, independent commissioner must be able to monitor management’s attitudes, behaviors, decisions and acts so that they will not perform any act which may threaten company’s legitimacy, such as tax aggressiveness. this research supports the research conducted by lanis & richardson (2012) wjocj finds that board of independent commissioners is able to reduce tax avoidance. company which performs tax avoidance is deemed socially irresponsible and in contrary to the corporate social responsibility principle. based on the explanation, this research takes the following hypothesis: h3: independent commissioner may moderate the influence of corporate social responsibility on tax avoidance independent commissioner moderates institutional ownership on tax avoidance board of independent commissioner is member of commissioners derived from outside the company and unaffiliated to controlling shareholder, member of directors and other board of commissioner (diantari & ulupui, 2016). the agency theory states that the higher the number of board of independent commissioners, the better they supervise and control executors’ acts and directors’ acts, with regard to opportunistic behavior. institutional ownership will influence corporate management’s tax avoidance policy. in case of the higher the concentration of institutional short-term shareholding, the higher the tax avoidance is, but the higher the concentration of long-term shareholding, the more reduced the tax avoidance policy is. on the contrary, bigger proportion of independent commissioner may improve shareholder’s shareholders’ performance and wealth (santoso & muid, 2014). the existence of board of independent commissioner strengthens correlation between institutional ownership and tax avoidance, thus it may reduce tax avoidance performed by corporate management (kholbadalov, 2012). based on the explanation, this research takes the following hypothesis: h4: independent commissioner may moderate the influence of institutional ownership on tax avoidance methods this quantitative research employs a descriptive method. the research location is mining and agricultural companies listed at the indonesia stock exchange (bei) in the period 2013 – 2017 (5 years) obtained by accessing bei website (www.idx.co.id). the research aims at testing the influence of csr and institutional ownership on tax avoidance with independent commissioner as the moderator. the population is 66 mining and agricultural companies but not all of them are taken as the research objects in adaptation to the sampling method, purposive sampling method, with 10 companies are meeting certain criteria pursuant to the sampling method, which are: http://www.idx.co.id/ b. f. arianti/journal of accounting and business education, 4 (2), march 2020 104 table 2. sampling criteria criteria samples meeting the criteria manufacturing companies registered at bei 66 companies which issues complete annual report from 2013-2017 (20) companies which have not suffer loss during observation (10) companies with annual report containing information (data) needed in the research (26) total observation 10 in control of the influence of independent variable (csr) on dependent variable (tax avoidance) not to be influenced by any other non-studied factors and in control of the influence of moderating variable (independent commissioner), this research employs each variable so as to strengthen the research model, with an explanation that tax avoidance is any efforts performed to reduce tax burden with comparison between tax burden and profit before tax as the indicator (dyreng et al., 2017). corporate social responsibility is company’s commitment to participating in sustainable economic development in improving the quality of life and environment beneficial to the company itself and the society with an indicator that in case of csr disclosure, the score is 1 and if otherwise, the score is 0 (apriliyana, 2018; jessica, 2014). institutional ownership is the number of shareholders from out of the company, particularly institution, either financial or non-financial (putra et al., 2018) with comparison between the amount of institutional shares and the amount of issued shares as the indicator (dewi & jati, 2014; diantri & ulupui, 2016; putra et al., 2018). independent commissioner variable is defined as individual unaffiliated in any regards to controlling shareholder, without affiliated relationship with directors or board of commissioners, not assuming position as director of a company related to measurement instrument, which is comparison between the number of independent commissioners and number of all members of board of commissioners (annisa & kurniasih, 2012). this research employs moderate regression analysis (mra) to analyze the data and an interaction test instrument of special application of multiple linear regression, of which regression equation contains interaction element (two or more multiplication of independent variable). the interaction test is conducted by multiplying the variables hypothesized as moderating variable by the independent variable. one of the characteristics to note in the calculation in regression analysis is the moderating effect or interaction effect, which is the existing condition when a variable influences the form of relationship between other independent variable and dependent variable (sugiyono, 2016). results hypothesis test is conducted using the moderated regression analysis model or interaction test in examining whether a variable taken as the moderation variable may strengthen or otherwise (weaken) the relationship between independent variable and dependent variable. below is the result of moderation test of each variable. b. f. arianti/journal of accounting and business education, 4 (2), march 2020 105 table 3. result of moderated regression analysis test variable unstandardized coefficient standardized coefficient sig b beta csr 0.453 0.557 0.360 institutional ownership 1.206 2.154 0.025 independent commissioner 4.392 2.324 0.001 csr* independent commissioner 0.000 -1.165 0.201 io* independent commissioner 0.000 -3.953 0.005 in the result of mra on interaction above, the significance value of t test of csr variable is 0.360. this value is higher than 0.05, showing that csr variable does not influence tax avoidance and institutional ownership variable is 0.025. the value is lower than 0.05, showing that institutional ownership variable influences tax avoidance. the interaction value test result shows that moderating variable x1*z has t count value of -1.298  t table 2.000 with significance level of 0.201, higher than 0.05. this means that independent commissioner variable is moderation variable which weakens the relationship of csr variable with tax avoidance. furthermore, x2*z has t count of -2.924  t table 2.000 with significance level of 0.005, lower than 0.05. this means that independent commissioner variable is moderation variable which strengthens the relationship of institutional ownership variable with tax avoidance. the result may be observed in the following table: table 3. recapitulation of data analysis result hypothesis criteria interpretation conclusion csr 0.925  = 0.925  2.000, level over 5% hypothesis is rejected csr does not influence tax avoidance io 2.313 ≥ = 2.313 ≥ 2.000, level 5% hypothesis is accepted institutional ownership influence tax avoidance csr* independent commissioner -1.298  = -1.298  2.000, level over 5% hypothesis is rejected independent commissioner weakens the influence of csr on tax avoidance io* independent commissioner -2.924  = -2.924  2.000, level 5% hypothesis is accepted independent commissioner strengthen the influence of institutional ownership on tax avoidance discussion csr’s influence on tax avoidance the result of the first hypothesis test (h1) shows that csr does not significantly influences tax avoidance. the lower the csr value, the lower the etr value is, in which lower etr value shows high tax avoidance level. this explains that the lower a company performs csr activity, the lower its responsibility in performing its tax obligations is, or the lower a company’s csr, the higher it performs tax avoidance. csr is the form of accountability to the society (environment, customer, employee, supplier and other b. f. arianti/journal of accounting and business education, 4 (2), march 2020 106 community). tax compliance is the form of taxpayer’s accountability to the government. csr is negatively correlated with tax compliance. therefore, csr is not inversely proportional to tax avoidance. this research result supports the research conducted by permata & adiwibowo (2017), that companies with socially irresponsible csr activity has higher involvement in tax avoidance. meanwhile, other researches show that csr variable does not significantly influences tax avoidance practice proxied with etr. therefore, the first hypothesis is unacceptable (rejected) (h lionita & kusbandiyah, 2017; ayufa et al., 2018). this shows that the extent of csr disclosure a company makes in its annual report does not influence its tax avoidance practice, which means that in case csr disclosure level is higher, the company does not necessarily perform tax avoidance. in addition, csr has become an obligation in some companies and csr application positively influences company, environment and surrounding society, helping company smoothen its operational processes and free of any disturbance. institutional ownership’s influence on tax avoidance the result of the second hypothesis test (h2) shows that institutional ownership significantly influences tax avoidance. this research result conforms to the agency theory which explains there is relationship between shareholders (principal) and managers (agent), in correlation with tax avoidance’s influence on institutional ownership, when the relationship between shareholders and managers in a company is good, the company will not perform tax avoidance. on the contrary, when there is bad relationship in the company or there is asymmetry of information between shareholders and managers, it will cause tax avoidance act. this research result conforms to the research conducted by prasetyo & bambang (2018), that institutional ownership influences tax avoidance. in addition, the research conducted by meila (2018) shows that institutional ownership influences tax avoidance, which means that institutional ownership is important in improving and optimizing supervision, since it is deemed able to control any decision made by managers effectively. with higher institutional ownership, the better the supervision over manager is and it may reduce conflict of interest between the management, thus agency issue is reduced, and reduce the chance of tax avoidance or the higher the institutional ownership, the stronger the control of external party over the company is, allowing tax avoidance practice. independent commissioner weakens corporate social responsibility on tax avoidance the result of the third hypothesis test (h3) may be concluded that board of independent commissioner cannot moderate or weaken csr’s influence on tax avoidance. board of independent commissioner is derived from out of the management, thus board of independent commissioner tends not to be influenced by management’s act, but they tend to encourage corporate management to disclose wider information to shareholders and stakeholders. board of independent commissioner plays a role in supervising management’s act in csr disclosure. with board of commissioner’s supervision, csr disclosure may be improved appropriately without certain purpose to be achieved by the management. this research supports the research conducted by christina et al., (2019), that independent commissioner cannot moderate the relationship between corporate social responsibility and tax avoidance, which means that when independent commissioner finds improved csr disclosure, tax avoidance practice will be reduced, thus bigger proportion of commissioners in company may prevent tax avoidance practice. independent commissioner strengthen institutional ownership’s influence on tax avoidance the result of the fourth hypothesis test (h4) may be concluded that independent commissioner may strengthen institutional ownership’s influence on tax avoidance. this hypothesis supports the agency theory, that institutional ownership has the capability to monitor the management effectively, as shown with the amount of shares owned by institutional investor, which encourages the management to focus their concern more on corporate performance, reducing opportunistic behavior and selfish behavior (oktaviani, 2019). in case shareholding cannot become a monitoring mechanism over corporate managers, causing it unable to reduce the management’s opportunistic behavior, it is likely that the institutional party does not perform its supervisory duty well. board of independent commissioner is a part derived from out of the management, board of commissioners tends not to be influenced by management’s act, but they tend to b. f. arianti/journal of accounting and business education, 4 (2), march 2020 107 encourage corporate management to disclose csr more widely to shareholders (prasetyo & bambang, 2018). the existence of board of independent commissioner may reduce tax avoidance practice and is expected to strengthen the relationship between institutional ownership and tax avoidance which will thus reduce tax avoidance act by the management. therefore, it is likely that institutional party’s supervision in prevention of tax avoidance does not run well as expected, since institutional ownership is of shares of minority. conclusion based on the result of data analysis and discussion as described above, we may conclude that csr does not influence tax avoidance. the second hypothesis shows that institutional ownership influences tax avoidance. furthermore, independent commissioner weakens csr’s influence on tax avoidance and independent commissioner may strengthen institutional ownership’s influence on tax avoidance. this research is still bound by limitation and needs development in further research, that this research only employs 4 variables, namely csr, institutional ownership, independent commissioner and tax avoidance variables, is conducted in a limited period from 2013-2017 and is only conducted with companies operating in manufacturing sector only. besides, the tax rate of each of sample companies is not known, thus the researcher cannot categorize whether or not the sample companies perform tax avoidance. in addition, csr disclosure is also not classified based on indicator group. further research is expected to take longer period and classify csr disclosure based on indicator group, thus it may identify which indicator group dominantly reduces tax avoidance. in consideration of some existing limitations, the research suggests further research to add other variables to detect company’s tax avoidance activity, such as audit quality, gcg mechanism and others and add other measurement model approach to proxy tax avoidance act measurement to strengthen further research’s findings. based on the research result, the research implication is that it has social impact of examining the importance of tax payment and is expected to enhance the society’s willingness, especially related parties, to pay their tax in the appropriate amount, which will have impact on indonesia’s economy. in economic perspective, the research impact is that it discusses tax, especially tax avoidance which causes tax receipt to never reach target rate. with this research, the society is expected to be aware of the importance of tax 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(2016). metode penelitian kuantitatif, kualitatif danr & d. bandung: alfabeta. d. t. irafahmi, p.j. williams, n. liem/journal of accounting and business education, 7 (1), september 2022 45 the effect of constructive alignment in course design on accounting students’ development of written communication competence diana tien irafahmi1 p john williams2 nena lim3 1 department of accounting, universitas negeri malang, indonesia 2 school of education, curtin university, australia 3 school of accounting, curtin university, australia email: diana.tien.fe@um.ac.id doi: http://dx.doi.org/10.26675/jabe.v7i1.29729 abstract: the purpose of this study was to examine the effects of constructive alignment (ca), that is aligning learning outcomes, learning activities and assessment tasks, on students’ development of competence in written communication. a counterbalancing twophase experimental design was adopted. third-year undergraduate accounting students in an advanced auditing course were randomly assigned into two groups. in phase 1, group 1 received the constructive alignment intervention, and group 2 studied in a traditional learning situation. in phase 2, the order of intervention was reverse, where group 2 received the intervention, and group 1 did not receive the intervention. participants’ written competency was measured before and after each phase by using an auditing writing test. qualitative comments were also collected in group interviews. the study found that in the phase when students received constructive alignment intervention, they write better than the students who did not receive constructive alignment intervention. this finding indicates that constructively aligning learning outcomes, learning activities, and assessment tasks around writing help improve accounting students’ written communication competence. for decades, accounting practitioners and employers have been lamenting over the inadequacy of accounting students’ written communication competence. results of this study provide useful and positive evidence to accounting educators on the importance of aligning components in course design to develop students’ communication competence as required by the profession. educators who intend to develop students’ competence in written communication can be encouraged to redesign their courses according to the constructive alignment framework. article history received: 24 august 2022 revised: 5 september 2022 accepted: 28 september 2022 keywords accounting education, auditing, written communication competence, constructive alignment, graduate attributes citation: irafahmi, d.t., williams, p.j., & lim, n. (2022). the effect of constructive alignment in course design on accounting students’ development of written communication competence. journal of accounting and business education, 7(1),45-58 introduction effective writing is essential to success in accounting workplaces (christensen & rees, 2002; fleet & turner, 2003; may & may, 2009). it is no longer sufficient for accounting graduates to possess only discipline knowledge (fouché, 2013; howcroft, 2017; yap, ryan, & yong, 2014) because repeated journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ mailto:dianatien.irafahmi@postgrad.curtin.edu.au http://dx.doi.org/10.26675/jabe.v7i1.29729 d. t. irafahmi, p.j. williams, n. liem/journal of accounting and business education, 7 (1), september 2022 46 evidence has indicated that employers prefer graduates who can communicate effectively in writing and orally (bui & porter, 2010; crawford, helliar, & monk, 2011; lim, lee, yap, & ling, 2016; mandilas, kourtidis, & petasakis, 2014; tan & laswad, 2018). despite the importance of communication for accountants, literature continues to express concern about accounting graduates’ communication skills (christensen & rees, 2002; kunz & de jager, 2019; moore & morton, 2017; riley & simons, 2016; stevens, 2005; stout & sorensen, 2015). professional accounting bodies such as the international accounting education standard board (iaesb) (iaesb, 2019) and the american institute of certified public accountants (aicpa) (aicpa, 2018) have responded to this problem by outlining good communication competence as one of the learning outcomes that should be developed throughout the accounting education curriculum. however, limited guidance is available to help accounting educators meet the professional accounting bodies’ expectation (ballantine & larres, 2009). this study relies on an integrative learning approach known as constructive alignment (ca), which aligns three main components of course design: the intended learning outcomes, the learning activities and the assessment tasks (biggs, 1999; biggs & tang, 2011; joseph & juwah, 2012; larkin & richardson, 2013; treleaven & voola, 2008). the aim of the study is to examine if the implementation of ca facilitates students’ development of competence in written communication. prior studies have focused on the views among accounting stakeholders of the importance of written communication (e.g., camacho, 2015; crawford et al., 2011; frecka & reckers, 2010; nellermoe, weirich, & reinstein, 1999) or reporting a communication skill gap between accounting graduates and practitioners (e.g., christensen & rees, 2002; riley & simons, 2016; stevens, 2005). despite the value of the prior studies, apostolou, dorminey, hassell, and watson (2013) pointed out that research into the identification of importance of professional competences in accounting has been well documented. future research ‘must shift away from documenting the importance ... toward identifying the best ways to teach these competence’ (apostolou, hassell, rebele, & watson, 2010, p. 146). some efforts have been made to improve accounting students’ writing skills (christensen, barnes, & rees, 2011; graham, hampton, & willett, 2010; holmes, zhang, & harris, 2018), but their focus was on adding components such as short essay, rubric, or feedback without considering writing in the context of course design (biggs, 1996; wessels, 2010; willcoxson, wynder, & laing, 2010). this study contributes to the accounting education literature by providing empirical evidence on the effect of ca, a framework that takes into consideration the interrelationships among different aspects of course design, on students’ communication competence. while researchers have claimed that aligning learning outcomes with teaching and learning processes and assessment will facilitate the development of students’ competencies (lawson et al., 2014; lawson et al., 2015; wessels, 2010; willcoxson et al., 2010), it remains unclear whether adoption of ca in accounting classrooms would result in positive impacts on students’ development of communication competence. therefore, research on ca in accounting education is of value (gunarathne, senaratne, & senanayake, 2019; irafahmi, williams, & kerr, 2021; van rooyen, 2020). as the communication competence problem is not limited to accounting graduates (e.g., brownell, price, & steinman, 2013; haldane, hinchcliff, mansell, & baik, 2017), the ca approach may also be useful for other disciplines. joseph and juwah (2012) and teater (2011) have implemented ca in the context of nursing and social work, but they did not specifically use ca to solve the problem of lack of communication skills. educators from various disciplines can redesign their courses accordingly to improve their students’ communication ability. this study contributes to the ca literature because it addresses many important issues that were not addressed by past studies. while researchers have documented the positive impact of implementing ca (e.g., joseph & juwah, 2012; larkin & richardson, 2013; treleaven & voola, 2008), their research design typically did not consider the impact of control variables such as different teaching staff members on the implementation of ca (larkin & richardson, 2013). in addition, prior research did not explore the ongoing learning experience and performance of students after their exposure to ca. the counterbalanced experimental design of this study helps to examine whether ongoing support is needed to ensure continuity of skill development. d. t. irafahmi, p.j. williams, n. liem/journal of accounting and business education, 7 (1), september 2022 47 this paper proceeds with a review of literature on the gaps in communication competence as perceived by accounting stakeholders, followed by the literature describing written communication competence for auditors, and the ca framework. the paper then describes the research method, the findings and discussion of the findings. the paper concludes with some recommendations for accounting educators who desire to develop students’ competence in written communication. . literature review communication competence gap graduates’ competence in communication has received wide attention in accounting education literature. not only is it considered important in the workplace (siriwardane & durden, 2014; siriwardane, low, & blietz, 2015; tan & laswad, 2018), but it is also regarded as an area where there is a substantial competence gap (lin, krishnan, & grace, 2013; mandilas et al., 2014; phan, yapa, & nguyen, 2020). employers and practitioners consider communication competence to be vital for career success but educators and students tend to underestimate its importance (howcroft, 2017; lin et al., 2013). tan and laswad (2018) conducted a content analysis on accounting job advertisements in australian and new zealand. the results showed that communication is listed as one of the most frequently required behavioral skills in job advertisements, indicating an extension of the work of accountants from handling numbers to communicating numbers and information effectively to others (tan & laswad, 2018). findings from a study of the big four accounting firms also indicated that communication is an essential competency for accounting graduates (bui & porter, 2010). employers surveyed in howcroft’s study (2017) pointed out that technical accounting knowledge must be accompanied by good communication ability for graduates pursuing a career in accounting. similarly, practitioners stressed that communication competence is a key determinant for hiring entry-level accountants; therefore, graduates should pay more attention to upskill their competency (riley & simons, 2016). teaching practice in accounting education, however, seems to emphasize technical skills related to the accounting discipline (fouché, 2013; yap et al., 2014) and is not tuned in to the current and future demands of the accounting profession (diller-haas, 2004). hence, it is unsurprising that the literature continues to report the inadequacy of accounting graduates in meeting professional requirements. for example, a survey in hong kong shows that accounting graduates were considered weak in written and oral communication (chen, 2013). while the importance of oral communication cannot be neglected, some research indicates that written communication is more frequently used by entry level accountants in their work (siriwardane et al., 2015). other studies have suggested that students master oral communication better than written communication (bui & porter, 2010). students perceived that they did not develop sufficient writing skills during their studies (oussii & klibi, 2017). hence, employers remain concerned about writing skill development in undergraduate education (clokie & fourie, 2016; howcroft, 2017). written communication competence for auditors auditors have to communicate with others in both written and oral formats. auditing standard isa 260 (ifac, 2015) states that auditors should provide written documents to communicate the significant findings of the audit if in the professional judgment of the auditor, oral communication would not be adequate (para. a37 – a45). written audit documentation helps auditors demonstrate that audit procedures were properly conducted, audit evidence was properly collected, and the audit conclusions were derived appropriately. there are two categories of written documents in auditing: internal documents and external documents (goby & lewis, 1999). internal documents include memos, periodic reports, and working papers. external documents include audit reports, confirmation letters, management advisory letters, letters of representation, and other correspondence to clients (goby & lewis, 1999). unlike external documents which have a standardised format and are mostly written by managers and supervisors (goby & lewis, 1999; nellermoe et al., 1999), internal documents typically have a non-standard format and are prepared by entry-level accountants (siriwardane et al., 2015). d. t. irafahmi, p.j. williams, n. liem/journal of accounting and business education, 7 (1), september 2022 48 many studies acknowledge the importance of written communication for accountants and auditors (camacho, 2015; crawford et al., 2011; frecka & reckers, 2010; mandilas et al., 2014; nellermoe et al., 1999). for example, camacho (2015) found that auditors spent one-third of their time on writing. similarly, nellermoe et al. (1999) found that accounting professionals spent about one-third of their time on writing. surveys of auditors in the u.s.a. also concluded that writing audit reports is one of the most important aspects of an auditors’ job (frecka & reckers, 2010). in europe, a survey of chartered accountants concluded that written communication competence is important and the development of such competence should be at the undergraduate level (crawford et al., 2011). overall, these studies show that written communication is a prominent part of auditors’ work. unfortunately, the literature continues to report a gap between professionals’ written communication expectations and accounting graduates’ skills (kunz & de jager, 2019; moore & morton, 2017; siriwardane & durden, 2014; stout & sorensen, 2015). christensen and rees (2002) found that employers were dissatisfied with employees’ writing skills, and were concerned about the organization and clarity of their written documents. similar findings were reported in a study by stevens (2005) who emphasised the need for university graduates to improve their writing skills, especially skills related to the clarity and development of ideas. a survey of public accounting firms revealed that practitioners were concerned about misspelling and poor grammar of entry level accountants (riley & simons, 2016). the message from the literature is obvious: writing is a competency that should be developed in the accounting education curriculum (aicpa, 2018; iaesb, 2019). in the pre-certification core competency framework, aicpa (2018) states that effective communication is a core professional skill of accounting graduates. in the same vein, iaesb (2019) specifies communication competence to be one of the learning outcomes for accounting graduates. accounting graduates must be able to ‘communicate clearly and concisely when presenting, discussing and reporting in formal and informal situations, both in writing and orally’ (iaesb, 2019, p. 45). unfortunately, despite their requirements, neither aicpa nor iaesb provides explicit guidance for effective development of written communication competence. developing students’ written communication competence two types of strategies that incorporate writing skill development into the accounting curriculum have been outlined in the literature. the first approach simply adds an independent writing course to the curriculum, and the second approach integrates writing components into existing accounting courses (gingras, 1987). generally, the second approach is preferable due to time and cost effectiveness (gingras, 1987; graham et al., 2010). some researchers argue that students need to put their discipline knowledge into their writing product. hence, providing a standalone writing course in the curriculum is not as useful as embedding the mechanics of writing within existing courses (christensen et al., 2011; holmes et al., 2018). by incorporating a written communication components within each relevant discipline, students will ‘learn to write’ and ‘write to learn’ (christensen et al., 2011). although many researchers agree that the embedding strategy is the most effective, it is difficult to implement. the accounting curriculum has already been overloaded with technical knowledge components, leaving the educators little leeway to teach written communication. this issue inhibits educators’ willingness and commitment to add writing skills components into their courses (de lange, jackling, & gut, 2006; hossain, kummer, & o’leary, 2015). researchers’ suggestions include a minimal instruction intervention approach incorporating a rubric, feedback and handouts (holmes et al., 2018), using short essays (christensen et al., 2011), and implementing a writing session (graham et al., 2010). however, some argue that attempts to develop students’ competencies need to take place in the context of course design, instead of just adding new components such as writing tasks and feedback (biggs, 1996; mladenovic, 2000; wessels, 2010; willcoxson et al., 2010; zhao, 2016). wessels (2010) and willcoxson et al. (2010) described that one potential way to develop competence is by aligning three elements in the course design: the intended learning outcomes, the learning activities and the assessment tasks. in general education literature, this alignment principle in the course design is known as constructive alignment (biggs, 1996, 1999; biggs & tang, 2011). thus, constructive alignment is deemed appropriate to assist in this issue (biggs & tang, d. t. irafahmi, p.j. williams, n. liem/journal of accounting and business education, 7 (1), september 2022 49 2011; treleaven & voola, 2008; wang, su, cheung, wong, & kwong, 2013). constructive alignment (ca) ca is a framework in education that has potential to enhance the quality of teaching and learning (biggs, 2014; biggs & tang, 2011; nightingale, carew, & fung, 2007; wang et al., 2013; zhao, 2016). according to this framework, the key to helping students develop specific competencies is by enhancing the quality of teaching, which is attained by aligning the three main components of course design: the intended learning outcomes, the learning activities and the assessment tasks (biggs, 1996, 1999; zhao, 2016). the interrelated elements of course design will enable students to engage deeply in their study, thus students will have a better opportunity to achieve the desired outcomes (biggs, 1996, 2014; biggs & tang, 2011). to align the elements in course design, the first thing to do is to formulate the intended learning outcomes (in this case is to be able to write an audit documentation) and then to design the learning activities and assessment tasks that support the attainment of the intended learning outcomes, such as by providing writing activities and writing tasks (irafahmi et al., 2021). ca has been implemented in various disciplines (joseph & juwah, 2012; morselli, 2018; teater, 2011; treleaven & voola, 2008). joseph and juwah (2012) compared the clinical skill acquisition of nursing students who participated and did not participate in a constructively aligned curriculum. they found that those in constructively aligned curriculum were perceived to acquire more clinical skills compared with those in non-aligned curriculum. in a study that examines the application of ca in a marketing course, treleaven and voola (2008) found that students felt confident in their development of critical thinking and lifelong learning. similarly, teater (2011) found that in a social work course, the use of ca contributed to improved student confidence in applying social work theories into practice. ca has been reported to have strong a linkage with the improvement of students’ learning approach (lawson, 2011; wang et al., 2013). students’ learning approach, or how students learn, could be classified into two types: deep and surface (biggs & tang, 2011). a deep learning approach occurs when students engage in appropriate and meaningful learning activities to achieve the learning outcomes (biggs & tang, 2011). in a study comparing two programmes that have different degrees of ca, wang et al. (2013) revealed that students in the more ca-oriented program were more likely to apply the deep learning approach instead of surface approach in their studies than were students in the less ca-oriented program. this study’ conclusion is consistent with the results in another study that examined students from seven different programmes (lawson, 2011). lawson (2011) found that highly aligned courses foster a deep approach to learning. while positive outcomes from the implementation of ca have been reported in the literature (joseph & juwah, 2012; larkin & richardson, 2013; treleaven & voola, 2008), the impact of variables such as different teaching staff members and different characteristics of participants were not considered in those studies. the current study adds to this literature by controlling for important factors that may contribute to the pattern of results observed in prior literature. moreover, the indicators for successful implementation of ca were mostly derived from data collected about the perspectives of students under investigation ( l a r k i n & r i c h a r d s o n , 2 0 1 3 ; l a w s o n , 2 0 1 1 ; t e a t e r , 2 0 1 1 ; w a n g e t a l . , 2 0 1 3 ; z h a o , 2 0 1 6 ) . to gain a more accurate understanding of students’ development of competence, the use of a direct measure of students’ achievement, such as utilising students’ actual writing tasks is warranted (wang et al., 2013). to examine the benefit of ca in the context of developing accounting students’ written communication competence, this study examines the following research question: does ca in course design affect accounting students’ development of written communication competence? based on prior literature, it is expected that students in the constructively aligned course will have better development of written communication competence than students in traditional course. methods this study is part of a larger study aiming to improve the competence of accounting students in an auditing course. the larger study examines the development of several areas of competence, including auditing, information technology, teamwork, ethics, professional scepticism and judgment, and written d. t. irafahmi, p.j. williams, n. liem/journal of accounting and business education, 7 (1), september 2022 50 communication. this paper specifically reports the development of written communication competence. this study employs a mixed methods, counterbalancing experimental design. quantitative data were gathered from auditing writing tests conducted before and after each intervention, and qualitative data were collected from group interviews. the study was conducted in two phases, each lasted for six weeks. two groups of students received intervention in reverse order. third-year undergraduate accounting students in a public university in indonesia were invited to participate in the study. ethics approval to conduct research with human participants was granted by the university research ethics committee. participants were recruited through an online announcement posted in the university enrollment system. out of 521 students, 179 agreed to participate in the study. the enrollment system in the university randomly assigned the participants to two groups: group 1 and group 2. in phase 1, 89 students in group 1 received the ca intervention, while 90 students in group 2 were taught in traditional approach (non-ca intervention). in phase 2, group 2 received the ca intervention, but group 1 did not. this is called a counterbalancing procedure because all participants were given opportunities to experience the ca intervention, although at different times during the experiment. the differences between ca intervention and non-ca intervention lie in the clarity of the intended learning outcomes, and the alignment of learning outcomes, learning activities and assessment tasks. in each phase of the study, when students received the ca intervention, written communication competence was formulated as one of the intended learning outcomes, and the instructor frequently emphasised this expectation to students. the instructor provided guidance and example of good structure of audit documentation in the beginning of the meeting, and within the duration of the intervention, students learned about auditing concepts as well as writing skills through preparing audit memorandum in a number of case studies (see e.g., bagley & harp, 2012; miller & savage, 2009). students received verbal and written feedback for the writing tasks. in the portion of the phase where students received no intervention, students studied in a teaching situation that was historically implemented in the auditing course. the intended learning outcomes indicated the expectation for students to write, but the learning activities did not involve supporting the outcomes through writing activities. the main learning activities were lecturing and student presentations, and the focus was on delivering content knowledge. since there were no writing activities, feedback on writing was not provided in this learning environment. in the final assessment, students had to write audit documentation. therefore, the learning activities were not aligned with the intended learning outcomes and the assessment. other variables that may impact on the intervention, such as the instructor, the textbook, the topics, and the study period were the same for both groups. to measure their development of writing skills, auditing writing tests were administered before and after each phase. the writing test conducted before and after phase 1 was adapted from andiola, lambert, and lynch (2018), and the test conducted after phase 2 was adapted from peaden and stephens (2013). both writing tests were similar in terms of the difficulty level. in each test, students were asked to write an audit memorandum in response to the auditing case provided. students wrote the audit memorandum in their native language. the tests required students to work in teams, since the larger study targeted the development of teamwork. each team consists of two students, except for three teams that had three members due to the uneven number of students in each classroom. thus, the computation of the test data used the total number of teams instead of the total number of individual students (44 in group 1, 44 in group 2). each team produce one written item in each phase. although students’ writing was conducted at the team level, shawver (2020, p. 258) argued that working as a team is based on social interdependence and motivational theories where through learning together as team, team member ‘subsequently would perform better as individuals’. students’ writing were assessed using the rubric developed by holmes et al. (2018). the rubric consists of four criteria: organization, development, clarity and content. organization addresses the structure of writing, development indicates the coherency of writing, expression shows the clarity of writing, and content demonstrates students’ understanding of the subject matter. these four criteria are a comprehensive assessment of students’ ability to write. students’ writing was assessed on a five-point scale, from 1 (poor) to 5 (excellent) on each indicator in the rubric. the score for each criteria was an average of d. t. irafahmi, p.j. williams, n. liem/journal of accounting and business education, 7 (1), september 2022 51 the indicator scores, while the total score of the test was obtained from converting the maximum score in the rubric (20) to 100. students’ writing was assessed by two independent graders and the researcher to minimize bias in grading. results and discussion writing test results the results of the writing tests are presented in table 1. at the beginning of the semester, group 1 and group 2 possessed similar writing skills. they started at a low level of written communication competence, the mean score of written communication in group 1 was 32.5 and group 2 was 30.9. there is no significant difference between these groups’ writing competence (df = 86; one-tailed p = .211). table 1. results of writing test time of writing test group 1 (phase 1= ca; phase 2= nonca) group 2 (phase 1= non-ca; phase 2= ca) between groups m sd means difference (md) t-test (pvalue) m sd means difference (md) t-test (pvalue) means difference (md) t-test (pvalue) before phase 1 32.5 8.8 40.7 -27.7 -19.490 (0.000) 12.320 (0.000) 30.9 9.3 15.3 21.3 -6.438 (0.000) -8.287 (0.000) 1.6 0.807 (0.211) after phase 1 73.2 11.1 46.2 12.9 27 10.485 (0.000) after phase 2 45.5 13.2 67.5 15.7 22 -7.121 (0.000) at the end of phase 1, both groups of students have improved their writing competence (group 1: m = 73.2, group 2: m = 46.2). however, students who received the ca intervention (group 1) performed better than students who did not receive the ca intervention (group 2). the difference in their performance is significant (df = 86; p < .001). at the end of phase 2, when the ca intervention was discontinued in group 1, their written communication competence significantly declined. the mean scores decrease by 27.7, from 73.2 to 45.5. in contrast, group 2 developed better written communication competence and they outperformed group 1. the mean scores of group 2 increase by 21.3, from 46.2 to 67.5. the significantly better performance of group 2 shows that ca intervention makes a difference in improving students’ writing competence. overall, the evidence gathered from the quantitative data in this study confirms that the ca intervention facilitated student development of their writing competence. students who studied under ca intervention developed better written communication competence than students in the non-ca intervention group. this finding confirms that ca has a positive impact on students’ learning outcomes and supports the results of prior ca studies (e.g., lawson, 2011; teater, 2011; treleaven & voola, 2008; wang et al., 2013). nevertheless, the counter-balanced experimental design provides some new useful information for accounting educators. as the performance of group 1 dropped significantly after phase 2, it suggests that ongoing or long-term ca intervention is necessary to maintain the improvement. group interviews findings a total of twenty students participated in three group interviews. the first group interview (8 participants) was conducted after phase 1, while the second and third group interviews were conducted after phase 2 (6 participants each). these individuals were selected purposively, based on the results of the experiment. the first and second group interviews recruited participants from the ca group in each phase, and the third group interview recruited participants from the non-ca group in phase 2 who experienced the d. t. irafahmi, p.j. williams, n. liem/journal of accounting and business education, 7 (1), september 2022 52 discontinuation of the ca intervention. three themes emerged from the group interview analyses: motivation to learn, deep approach to learning, and continuity. students commented that under the ca intervention, they were motivated to learn. the clarity of the learning outcomes helped them realize auditors’ work is not limited to number crunching. they became aware that auditors must demonstrate effective written communication competence. once i knew the learning outcomes of the course, i felt this is something that can be applied in the workplace, i was actually educated to become an auditor, really interesting (gi-2a) the clarity of the learning outcomes in this study was attained not only by embedding the writing expectation in the intended learning outcomes, but also by communicating this expectation to students during the study period. emphasizing the writing expectation within auditing course is important to dismiss the potential misconception that writing is not critical to success in auditing profession (boyle, mahoney, carpenter, & grambo, 2014) and to help students obtain a sense of purpose for their future careers (graham et al., 2010). another factor that motivates students to learn is the authentic learning activities and assessment tasks to support the achievement of learning outcomes. the use of auditing case studies in this experiment enabled students to apply theory in practice (biggs & tang, 2011). students felt as if they were real auditors. for students, preparing various internal documents, such as audit memorandum in a number of case studies was challenging yet interesting, because this requirement resembles audit practice. not only they have to learn about auditing concepts, they have to learn writing skills as well. i am so motivated to learn auditing in this course because we have to deal with real auditing cases. i am very happy to learn not only about auditing theory but also practice. (gi-1c) when these authentic learning activities and assessment tasks support the achievement of the intended learning outcomes, students said they could focus on their learning. a common problem in the teaching practice particularly in higher education is that there is no synergy among those three components, making it more difficult for students to develop certain competencies (biggs & tang, 2011). feedback on writing was another determinant of students’ motivation to learn. students reported that the feedback during the learning activities and assessments influenced their enthusiasm to learn. because of the feedback given by their teacher, they felt they have received individual attention. they became aware of their writing mistakes and were motivated to put significant effort into subsequent writing tasks. prior studies also indicated that feedback complements an alignment system and has a positive impact on students’ motivation to learning (mccann, 2017; treleaven & voola, 2008). deep approach to learning is the second theme that explains why students in the ca intervention improved their writing competence. approaches to learning can be classified into two types: surface and deep (biggs & tang, 2011; davidson, 2002; duff, 2004; koh, 2014). a surface approach to learning is characterised by rote learning; while a deep approach to learning reflects students’ motivation and occurs when students engage in appropriate and meaningful learning activities to achieve the learning outcomes (biggs & tang, 2011). students commented that under the ca intervention, memorizing is not enough. they had to explore the answers by themselves. writing an audit documentation required them to not only understand the technical aspects of writing but also the content. the difficult part, according to them, was the content that they had to write, which was related to auditing. to convey the auditing content successfully in their writing, students had to extract information from various learning resources, such as textbooks, audit standards, and codes of ethics. when we did the auditing cases, we reviewed the theory first. is the theory fit to the audit case we are working with? so, it’s like, we studied again and again, … i felt like…i just understand many things. i am so happy that i have the opportunity to reveal knowledge by myself. (gi-1f) through deep approach to learning, students felt they were confident in their ability to document their audit d. t. irafahmi, p.j. williams, n. liem/journal of accounting and business education, 7 (1), september 2022 53 findings in written form, and they felt their writing improved significantly. this way of learning is in line with the ultimate goal of the ca framework, which is to set a good environment for students to be constructive learners who can reveal knowledge by themselves (biggs 1996, 1999; biggs and tang 2011). the third theme revealed from the qualitative data is the importance of continuity. when the alignment system was not sustained, students commented that they changed their learning approach and reduced their effort to learn, and, consequently, students felt they did not make substantial progress in their competence development. this is especially the case for students in group 1 who switched from receiving ca intervention in phase 1 to receiving non-ca intervention in phase 2. (when the ca intervention was discontinued) …we were back to remembering theory, i did not study as hard as before because just like any other courses, we read a book only for the purpose of presentation (gi-3d) students agreed that they needed a consistent system to continue learning effectively. this finding confirmed that students would adjust their learning approach in response to the learning environment (wang et al., 2013). maintaining the sustainability of the alignment system is important in providing a conducive environment for students to learn. it seems that the duration of six-week ca intervention in the study was insufficient to develop learner autonomy in this area. this last theme has provided an explanation of the drop of group 1 performance in phase 2. conclusion this study conducts an empirical research based on the premise that ca helps improve writing imbedded in a particular course, audit in this instance. this study addresses the gap in the literature by including control variables in the examination of the effects of ca in course design on students’ written performance. results of the counter-balanced experiment show that ca intervention had a positive impact on the development of students’ written communication competence. the ca intervention facilitated students’ development of their written communication competence, by situating students in an aligned and authentic learning context that promote learning. educators from accounting and other disciplines who intend to develop students’ competence in written communication can be encouraged to redesign their courses according to the ca framework. however, educators need to beware that the positive impact of constructive alignment is not sustainable unless the system is put in place for a reasonable period of time. this study has provided evidence of the effectiveness of ca intervention and thus provided valuable information for accounting educators to incorporate written communication into auditing courses. as with any empirical research, there are limitations with this study. students’ work was written by a team (consisted of two students in each team, except for three teams given the odd number of students in the classrooms) instead of an individual student. this is because the complexity level of the auditing test required students to work as a team and to improve students’ teamwork skills. it is suggested that researchers should consider measuring students’ individual writing in future studies after they are measured at the team level. furthermore, the length of intervention in each phase of the study was six weeks. future studies may consider extending the duration of the intervention to determine the ‘staying power’ of ca and to help researchers better understand the impact of educational intervention on students’ learning outcomes. references aicpa. 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(2016). the problem of constructive misalignment in international business education: a threestage integrated approach to enhancing teaching and learning. journal of teaching in international business, 27(4), 179-196. doi:https://doi.org/10.1080/08975930.2017.1301233 k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 111 the institutionalization of remuneration (a case study at the university x) kharisma yuanita mahanani 1 bambang hariadi 2 roekhudin 3 1,2,3 accounting department, faculty of economic, universitas brawijaya, indonesia email: kharisma.mahanani@um.ac.id doi: http://dx.doi.org/10.26675/jabe.v4i2.7140 abstract: this study aims to understand the process of institutionalization that occurred in the university x (ux) with their remuneration policy, starting from the idea of remuneration, remuneration discourse preparation, implementation and dissemination of remuneration. this is a qualitative research with case study approach to gain an understanding of the process of remuneration institutionalization at the ux. the results of this study indicate that the process of institutionalization of remuneration at the ux was related to external and internal factors of the organization. determination of the remuneration regulation is the external pressure which must be accepted by the ux because it has implemented public service institution (blu) financial management system. the idea of improving the quality of public services which was followed by the remuneration policy discourse and its application were not running well for the ux should face internal pressure from lecturers. in addition, education staffs who still do not have the application performance measurement weakens the process of institutionalization. keywords: institutionalization, remuneration, public service institution introduction nonoptimal public service and increased number of corruptions lead to criticism directed towards the government performance. for this reason, the idea of tidying up the government system has been an important agenda for the government in order to manifest good governance. it is expected that the newlyemerging paradigm on new publik management (npm) would replace the inefficient old public administration in public service, unknown performance, and even ignorance to what the people need. adopting npm helps the implementation of reform in public sector by targeting a change in institutional order, employment as well as financcial management (hood, 1991). according to mahmudi (2003), applying npm not only change the rigid, bureaucratical and hierarchical traditional management of public sector into a more flexible and market-accomodating one, rather it also constitutes a form of public administration modernization, power depoliticization or authority decentralization which encourages democratization. public sector reform has been promoted by the central government as an attempt to tidy up its administrative system. improved service to the community is one of important goals in this public sector reform. as the realization of this attempt of improving service given to the community, the government established public service instituion (blu) or public service agency which focused on services to the community. under law number 1 year 2004 on state treasury article 1 point 23, blu is the instituion journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ http://dx.doi.org/10.26675/jabe.v4i2.7140 k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 112 within the government established to provide services to the community as embodied in its effort to supply goods and/or services sold without prioritizing profit gain and in doing its job the principles of efficiency and productivity should be the basic consideration”. university x (ux) is a college which applies blu financial management or blu financial management since 2008 as established by the decision letter of minister of finance no. 279/kmk.05/2008 dated 24 september 2008. as one of the impacts of applying blu financial management, ux can now provide its employees with remuneration based on the required responsibility and professionalism demand. this remuneration was proposed by the rector and then established under the decision of minister of finance. remuneration is a reward given to managing officials, supervisory board and employees of blu. remuneration can be salary, incentive, honorarium, fixed allowance, bonus, severance pay or pension. the legal basis in preparing remuneration is permendikbud number 77 year 2014. in reference to this regulation, the amount of remuneration shall be based on the number of students, non-tax state income (pnbp), asset size and performance target achievement. many previous studies on remuneration associated it with civil servant’s performance. the managerial performance of financial management officials at state colleges increased when their leaders applied participatory numbering and remuneration and followed with the application of knowledge sharing in the organization (kawedar, 2015). in line with this research, the study conducted by gustika (2013) found that providing remuneration significantly influenced civil servant’s performance. however, a different result was obtained by rusman (2015) who studied the influence of remuneration, organizational culture, demographic characteristics and functional monitoring on the performance of financial managament employees at religious affairs ministry office of southeast sulawesi province. he found that the distribution of remuneration which was not based on performance assessment and workload made the employees thought they had been treated unfairly, resulting in the failure to achieve the expected performance improvement. according to rusli (2013) a remuneration system should integrate performance, employee’s competence and dedication while still complying with the reward and punishment principle. remuneration policy needs to be refined in terms of its regulation, factorial evaluation system, and revision of score assignment model and office class (alawiya et.al, 2013). the remuneration systems for lecturers and management should be diversified and updated continuously to reflect the occuring intellectual development (blaskova and blasko, 2014). ux has provided remuneration to all of its employees since 1 january 2015. this is what attracts the researcher to study the process of how remuneration is implemented by analyzing it from organizational point of view. the process of institutionalizing remuneration at ux can be studied using new institutional sociology (nis) framework. hariadi (2013) suggests that institutionalization is a process that an organization does to make itself remains acceptable to its institutional environment by imitating or emulating other organizations (isomorphic). dimaggio and powell (1983) explains three ways how an organization imitates or emulates (isomorphic) its institutional environment, i.e. coercive, mimetic and normative ways. the establishment of regulation on blu financial management forces ux to implement the remuneration institutionalization processes. this is a form of coercive isomorphism in which the organization receives pressure from the state to make some change by providing remuneration for its employees. according to jones (2001), organization change is a process made by the organization from the existing condition to a new one which is expected to match the organization’s goals in improving their effectiveness. this goes hand in hand with the goal of implementing remuneration within blu, i.e. to have an effective and efficient public service. remuneration policy is expected to improve employee’s performance and, in turn make the public service more effective and efficient. the research conducted by hariadi (2013) explains the dynamic of institutionalization process in pg krebet baru with revitalization strategy. his research result shows that the institutionalization process of sugar plant revitalization is influenced by accounting role. the hpp calculation determined by the government shows how accounting plays a role as the government’s political tool in maintaining inflation. nurdiwaty (2014) conducts a study on the institutionalization of social accounting at the blitar stateowned forestry enterprise. in her study, nurdiwaty shows that the regulation which requires blitar stateowned forestry enterprise to perform social accounting in the form of partnership and environmental k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 113 guidance program (pkbl) and the encouragement from the management serve as the institutionalization processes and these are classified as coercive and normative ones. previous studies on remuneration focus more on theoretical review of regulations of law established by the government. additionally, some remuneration-related studies use quantitative approach by performing statistical test. what makes this research different from those previous studies is that it uses qualitative approach. this is intended to understand the institutionalization process of remuneration at ux. also, this research uses nis framework by adopting the institutionalization process model (ipm) developed by dambrin et al. (2007) which, to the best of the researcher’s knowledge, has never been done in studying remuneration previously. literature review institutionalism constitutes a school of thought in organizational study which has its root on sociology. according to dimaggio & powell (1991), institutionalism developed as a response to behavioral study domination. an institutionalism expert sees that an institution or organization interacts through institutionalization process and they also believe that the way an organization institutionalizes new practices is contextual and culturally embedded. this is different from a behaviorism expert who sees an organization as a group of individual characteristics. one of the theoretical frameworks which have been used to evaluate public sector reform is new institutional sociology (nis). as found by covaleski et al. (1993) and dambrin et al. (2007), nis provides a valuable perspective in informing organizational process and accounting change. this has something to do with public sector where the needs of public sector organization are budgeted to achieve the legitimacy with the public fund provider. in nis perspective, the attempt made by an organization to institutionalize certain practices is not just encouraged by the motivation of finding efficiency, rather this effort is also driven by the motivation to obtain organizational acknowledgment or legitimacy. organization legitimacy is obtained through isomorphism, i.e. the behavior practiced by an organization by uniforming certain practices in order to emulate its institutional environment (dimaggio & powell, 1991). isomorphism is a method and character of institutionalization which can be either coercive, mimetic or normative. coercive isomorphism occurs when an organization is dictated by another power to change its regulations in the form of procedure, structure, management style or other habits. the power can be legal regulations or threats from the authority to put a halt on the vital resources needed by the organization. changes come not only from external power, rather reproducing another organization’s success in managing innovation is another form of change made by the organization known as mimetic isomorphism. normative isomorphism is driven by the organization’s internal party who believes that the organization’s superiority can only be achieved by institutionalizing new rules, procedures or practices which require employees to attend training and the organization to hire professional consultants. this research investigates how and why the actor comes for institutionalizing a remuneration system. institutionalization is used as an extensive theoretical framework in this research by using institutionalization process model (ipm) suggested by dambrin et al. (2007) to see the processes through which the remuneration institutionalization occurs. taken from the model previously developed by harun et al. (2012) and dambrin et al. (2007), it offers a certain value framework in this research since it has something to do with processes; particularly with how the initial idea pops up, is developed, prepared and implemented as a social construction. according to dambrin et al. (2007) to obtain the complete picture (of institutionalization), four stages need to investigated consist of propagation of new idelas (new ideals); description of new ideals in developing policies (new discourses); development of certain management tools based on new ideals (new technique); and implementation of predetermined techniques (internalization). the first stage, i.e. propagation of new ideals, normally occurs beyond the organization, and the next stage is usually also triggered by internal factors (dillard et al. 2004). this is possible in public sector since a certain external authority has an influence in forming remuneration policies. according to dambrin et al. k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 114 (2007), the institutionalization process is incomplete when no "discourses" nor "technique" are involved and "internalization" has taken place. for an institutionalization process to be "successful", there should be correlation between new ideals, new discourses, and new techniques. this means the implementation of a system is only possible when the actors see that the system practice needs to be done and committed to do so (dambrin et al., 2007, p: 176). when an institutionalization process fails, then the goals to be achieved by the policy will also be gone. according to dambrin et al. (2007, p. 176) in the absence of internalization, loose coupling or decoupling will occur and the practice of that policy is merely ceremonial. thus, the success of an institutionalization process depends on the internalization of new policies needed in line with the initial ideals (such us using remuneration to improve performance in public sector) as reflected in the actions of those applying it. hence, there is a correlation between new ideals, new discourse, new technique and and internalization (dambrin et al., 2007, hal: 178). in other words, the process of remuneration institutionalization may be officially implemented, yet the other problem is that whether or not it can also be used to measure performance and hr management in line with the initial purpose of this policy. remuneration in accordance with pmk no. 10 year 2006 is defined as a reward which can be salary, honorarium, fixed allowance, incentive, bonus for achievement, and/or pension. remuneration is the payment made to employees by an organization as a reward for their contribution to the organization (rusli, 2013). it is expected that the provided remuneration meets the feasibility and justice elements, thus its implementation needs to consider the pay for 3 p’s principle (regulation of minister of health no 68 year 2014), namely: 1. pay for position which is a type of remuneration directly related to the job and serves as a reward to employees for their willingness and commitment in performing the job demand. this kind of remuneration has something to do with the position assumed by employees, thus the higher one’s position, the greater the remuneration value received by the employees. the amount of this remuneration is fixed and paid on monthly basis. 2. pay for performance which is a type of remuneration related to the achievement of total performance of the contracted work and serves as a reward to employees for their individual total performance achievement so that the employees with good performance deserve high remuneration. this remuneration can be incentive or bonus and paid periodically as per the work unit policy. 3. pay for people is a remuneration policy related to the individual condition which is worth awarding for their expertise and competence and thus the more skilled an employee, the greater amount of remuneration they will receive. the amount of this remuneration is varied, depending on their performance and usually paid on monthly basis. in giving remuneration, some factors ought to be carefully considered, namely proportionality, equity, appropriateness and operating performance of blu (pmk no. 10 year 2006 jo. pmk no. 73 year 2007). proportionality is the consideration given to the size and number of assets managed by blu and the level of service, thus the greater the assets of a blu work unit, the higher their ability in providing remuneration. equity means the consideration made to the similar service industry to prevent any excessive gap in providing this remuneration. appropriateness means the adjustment made to blu’s ability to provide remuneration so that it will not be too much for the work unit’s finance. operating performance of blu is set by the minister/institution leaders by taking financial indicators into account, services, quality and benefits for the society. generally, remuneration policy is related to employee’s welfare. providing adequate remuneration can result in improved productivity and performance achievement. providing remuneration is expected to motivate workers to achieve the organization’s goals and creates a harmonious work atmosphere. k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 115 methods qualitative research has been widely used in social sciences such as psychology, anthropology, sociology and law. as time flies, accounting and management begin to use this type of research. this is influenced by the issue of burrell and morgan’s book in 1979 on sociological analysis of organization. qualittative research is selected as this research approach. qualitative research is a process of study to explore and understand the meaning of social or human problems by collecting and analyzing data and, eventually, presenting the report scientifically which include the voices of the participants, reflectivity of the research and its contribution to changes (creswell, 2015:59). qualitative research has its own strength in its greater flexibility since it can be adjusted to the existing conditions and the process of data collection can be adjusted with how the research is developing (denzin and lincoln, 1998 in basuki, 2006:84). according to sukoharsono (2006), conducting qualitative research requires a strong commitment, sufficient time, and reliable resources. integrating it with the institutionalization phenomenon, i.e. the process where new ideas or practices are adopted by an organization to be a habit, then the use of qualitative in this research is justified since it matches the characteristic of qualitative research. processual research can be conducted more easily in a more cautious way using qualitative method since its wider targets and detailed questions can be accomplished using this method. the strategy used in this research is case study to provide in-depth analysis on institutionalization practice. yin (2002) suggests that a case study is useful when the research aims to to answer “why” and “how” questions. a case study is a form of inquiry or study on a problem of particular nature (particularity) and it can be conducted using either qualitative or quantitative approach, targeting individual and group, and even the public in general (salim, 2001). kamayanti (2016:98) states that a case study can be used as an approach to understand the dynamic occuring under certain circumstances. this research is done at university x. this location is selected based on several considerations, i.e. firstly university x has been a public service agency work unit with a full blu status under the decision letter of minister of finance no. 279/kmk.05/2008 dated 24 september 2008. as a blu work unit, university x has also been appointed as blu work unit with remuneration system for its employees in accordance with the decision of minister of finance of the republic of indonesia number 390/kmk.05 year 2015. since the establishment of that regulation, university x has implemented blu remuneration for 2 years. the second consideration is the availability of access to conduct research at university x. in qualitative research, the availability of access to a location is highly important. qualitative research with case study approach needs a more familiar and natural relationship and growing trust, thus accessibility is ultimately needed. finally, the third consideration includes costs, time and energy. the data used in this research come from interview notes and documents related to this research. the informants involved in this study play different roles and have different interests in the organization which include policymakers, technical guidance drafters and performance assessors. this research is conducted by interviewing some informants, including: table 1. informant information institutionalization stages informants keywords new ideals head of subdirectorate of blu financial coaching for education (ministry of finance) national-wide remuneration new discourses head of pnbp sub-division (ministry of research, technology & higher education) remuneration at ministry/ institution level deputy rector ii (university x) ux remuneration policy new technique expert staff of wr ii (university x) remuneration technical guideline head of employment division (university x) mechanism for assessing educator’s performance k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 116 head of financial division (university x) remuneration payment mechanism internalization deputy dean ii (faculty of education, fip university x) performance evaluation deputy dean (faculty of psichology, fppsi university x) performance evaluation the researcher also collects data through observation, i.e. directly observing and taking notes on the symptoms or phenomenon studied within university x. this observation is done while making field visit, including when collecting evidences, such as interview. in this observation, the researcher is also participating since the researcher is also involved in the activity of those to be studied who serve as sources of research data. in this research, the researcher serves as staff of blu finance division at university x. when collecting data, the researcher focuses this researcher on the institutionalization stages using ipm model developed by dambrin (2007). this model matches the formulation (of objective) in this research, i.e. to understand how the occuring process of remuneration institutionalization was. as to the focuses of investigation in this research, they are detailed in the following table: table 2. investigation focuses institutionalization stages investigation focus new ideals initial ideas for remuneration new discourses discourse for developing and establishing remuneration system at the university x new techniques formulation of remuneration system at the university x internalization implementation of remuneration results and discussion new ideals remuneration is an integral part of blu financial management mechanism. university x (ux) as a state institution assigned with blu status should completely accept the consequence as set forth in gr no. 23 year 2005, including regarding the implementation of remuneration. this is as stated by head of subdirectorate of blu financial coaching for education (ministry of finance) below: “we also have to see this remuneration as an integral part of blu financial management mechanism. this is because gr 23 is the first (rule) to govern (this matter). thus, (deriving) from treasury law, the technical regulation below it is gr 23. it is from this gr 23 that the remuneration mandate begins. when a state institution is assigned with blu status, such as ux, then ux should completely accept the consequence in gr 23 to which they should ultimately, rather than half-heartedly, comply with.” since the issueance of gr no. 23 year 2005 on financial management for public service agency (blu), it took fairly long for ux to apply remuneration. this could not be separated from the resulting polemic, starting with the use of word “dapat” (may) in article 36 of gr no. 23 year 2005. with this “dapat” word, does it mean blu should impelement remuneration or do they have another scheme to implement. additionally, at nearly the same time, all state institutions perform the performance allowance. this is as suggested by the head of subdirectorate of blu financial coaching for education (ministry of finance) below: “what makes it too long between blu establishment and remuneration implementation is more likely due to technical issues regarding infrastructure preparation, technical guidance to translate article 36 of gr 23. the mandate has been there, yet almost all new blus implement remuneration in 2014. there was 6-year time lag, and for these 6 years many considerations k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 117 should be carefully discussed, including when the provision of performance allowance was implemented.” initially, state universities and colleges under the ministry of education and culture received performance allowance in 2013 under the presidential regulation no. 88 year 2013 since at that time not many state universities and colleges had implemented remuneration. since the reign shifted to president joko widodo, from 2015 state universities and colleges were under the responsibility of ministry of research, technology and higher education. the provisions on performance allowance in ministry research, technology and higher education were set forth in presidential regulation number 32 year 2016. in its practice, some blu state universities and colleges had not implemented remuneration. this is as stated by the head of sub-division pnbp (ministry of research, technology & higher education) below: “from 29 blu state universities and colleges under the ministry of research, technology & higher education, 19 have obtained kmk on remuneration. institutional ministry (kl) only gave warning for those state universities and colleges which had not submitted remuneration. no certain sanction, even to those blu state universities and colleges which had no kmk yet, we still gave them tukin” the establishment of regulation on remuneration is a form of external pressure that ux must receive. regulation as external pressure has been the most common form of coercive isomorphism (harcourt et al., 2005). this pressure is not there randomly; there is an ideal that the government wanted to achieve in realizing better public service, particularly in terms of hr, behind this pressure. remuneration is tightly related to the issue of human resource management (sdm). hr management had 3 components, namely: human resources, performance assessment and reward. remuneration cannot be separated from the final goal of blu, i.e. better public services. this opinion is uttered by the head of subdirectorate of blu financial coaching for education (ministry of finance) below: “it is highly important to implement remuneration and the room in need of improvement is its hr. this is because it will be “non sense” if the attempt is made, yet the persons to give the services are not prepared well. if i give you more incentive, you will work better, and that is exactly the assumption.” the initial idea for remuneration came from beyond the organization, in this case the government by establishing regulations on remuneration. the first institutionalization stage, i.e. propagation of new ideals, normally came from the outside of the organization (dillard et al., 2004). this is possible since external authority (central government) holds an influence in determining the remuneration policy. the first stage in institutionalization, i.e. propagation of ideals (new ideals) can be said as successful if it is followed by developing policies, new techniques and internalization (dambrin et al., 2007). new discourses ux holds the autonomy in managing their financial resources more flexibly, without violating such principles as efficiency, transparency, and accountability. one of the outcomes of this status is that in 2014 under the decision of ban pt number 250/sk/ban-pt/akred/pt/vii/2014, ux are instititionally accredited a. in the future, in order to improve its institutional capacity and capability and strengthen its independence, ux prepare themselves towards the state university and college as a legal entity (ptn blu) status in accordance with law number 12 year 2012 on higher education. this is stated by deputy rector ii below: “what is clear is that ux planned to be ptn blu, earlier it even went as far as nearly becoming ptn bh, yet since the law was revoked, we were then directed to ptn blu, rather than directly becoming ptn bh. i remembered, we had reviewed various ptn bh around 2005/2006. yet, at the end of the day ux changed its direction to be ptn blu first and in 2008 we officially became ptn blu” k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 118 remuneration is one of the privillege owned by ux as blu work unit. remuneration is one of the consequences that ux should implement since it uses blu financial management mechanism. deputy rector ii also stated his opinion below: “remuneration, i recalled, on 6 april 2015 through the decree of minister of finance for ux. had it not been established, we would not give the remuneration. thus, we had the basis. if one said it was forced, it could be so. yet, it was also due to (our own) awareness after the decree of minister of finance was issued.” remuneration is a reward which can be salary, fixed allowance, honorarium, incentive, bonus for achievement, severance pay, and/or pension. to determine remuneration, such principles should be considered: proportionality, equity, appropriateness, and operating performance. in addition, in giving remuneration, the extent of responsibility and professionalism demand should be the main considerations. remuneration was implemented after it was established under the decision of minister of finance upon being proposed by the minsiter of education and culture/ux leaders. the payment of remuneration should reflect fairness (equal pay for jobs of equal value) and consider the financial ability (pnbp). this is as suggested by deputy rector ii below: “if we still unable to do it, we should prepare the structure. only then it can be realized under the decree of minister of finance. the main requirement to submit proposal to be blu is being capable in terms of finance, particularly since this remuneration came from pnbp, rather than from rm. thus, if pnbp can, then go ahead and pnbp for remuneration is, at its maximum, 40%. then, it terms of the amount being paid, it depends on our own ability.” based on the minister of finance act number 10 year 2006 article 3, the amount of remuneration for blu leaders is determined by considering several factors, namely: (1) proportionality, i.e. consideration of size and amount of assets managed by blu and quality level. ux as blu work unit manage assets of over rp 2 billion worth. (2) equity, according to deputy rector ii, ux applies benchmarking to measure the equity factor with considerations as follows: “for consideration, well we referred to uc since this university at that time was the only public university or state university or college which had implemented remuneration. in addition, ux also referred to ua for the basis of equity. judging from the number of services, both the number of students, study programs, and faculties, (we are) on par with ua” the benchmarking process is a form of mimetic isomorphism, i.e. imitating the success of another university in managing innovation (dimaggio & powell, 1983). the result of benchmarking performed by ux in detail can be seen in the following table: table 3. benchmarking result table description ux ua ib uc income of pnbp 2013 rp 253 billion rp 139 billion rp. 268 billion rp. 124 billion asset value rp 923 billion rp 1,2 trillion rp. 2,2 trillion rp. 1,5 trillion number of faculties/pps 9 faculties 9 faculties 5 faculties 12 faculties number of study programs 92 study programs 97 study programs 63 study programs 50 study programs number of hr (personnel) 1990 1,643 1,747 1,790 number of students 29,106 students 33,813 students 17,485 students 22,750 students performance assessment 79.35 a-good 72.04 a-good 75.78 a-good 80.51 aa-good rector remuneration rp 21.4 million (pnbp) rp 21.9 million (pnbp) rp.20.4 million (pnbp) rp.22 million (pnbp) source: ux internal data k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 119 (3) appropriateness, i.e. adjusting the relevant blu’s financial ability. table 4. income trend, assets and equity of ux no 2011 2012 2013 1 income 153,559,208,340 160,395,821,197 254,397,011,049 2 apbn funding 223,575,478,431 198,854,854,400 242,887,364,246 3 assets 902,785,506,562 961,702,418,003 923,636,751,181 4 equity 902,785,506,562 957,288,176,189 855,724,993,820 source: financial statements of blu ux 2011-2013 (4) operating performance of blu, i.e presenting the operating performance set by minister/institution leader which at least considers such indicators as finance, services, quality, and benefits for the society. table 5. ux performance assessment results no year finance score services score total score category note 1. 2011 75.32 a-good no.: kep-01/pb.5/2012, 20 nopember 2012 2. 2012 24.45 54.91 79.35 a-good no.: kep-219/pb.5/2013, 31 desember 2013 based on the financial analysis made, ux has calculated the amount it needs to pay its remuneration at rp 101,449,525,354.00 which comes from pnbp fund. this amount of fund to fulfill the needs to fund remuneration for 1,990 personnel consisting of educators and education staff who are both civil servants and non-civil servants under the rector’s decision letter. the proposal of remuneration is sent to the institutional ministry (kl) in this case the ministry of research, technology & higher education for verification. this verification performed by kl is a hierarchical control mechanism, as suggested by the head of pnbp sub-division (ministry of research, technology & higher education) below: “blu is a line up or an extension of kl. kl operator in providing services. since university is a line up of kl, there is a hierarchical consequence here. it should be noted that every activity made by blu, it has an impact on kl. this is because blu spending will be a part of kl spending. if we talk about remuneration, we also talk about spending sector of employees. blu’s income becomes kl’s income. this shows a hierarchical control mechanism from blu up to kl” the process of reviewing remuneration proposal made by ministry of finance is not too different from the verification by kl, i.e. taking into account 4 aspects in remuneration proposal. this is as stated by the head of subdirectorate of blu financial coaching for education (ministry of finance) below: “we as assessor team will see the appropriateness between one rector and the other. for a rector, wherever they are, their main tasks and functions are the same, including their work load, they are the same. the difference is maybe in terms of the volume. thus, equity is still considered. therefore, it is still necessary to compare with similar industry.” after passing some stages in the remuneration proposal process, on 6 april 2015 ux was appointed blu work unit with a remuneration system for its employees as per the decision of minister of finance the republic of indonesia number 390/kmk.05 year 2015. kmk is the result of breaking down ideals (new ideals) into policy development (new discourses). this policy development is related to the k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 120 remuneration institutionalization process and it is reflected by the actions taken by the people implementing it (dambrin et al., 2005). new techniques each of those blus implementing remuneration has special the decree of minister of finance on remuneration system which is applicable in the said work unit as explained by the head of subdirectorate of blu financial coaching for education (ministry of finance) below: “specifically, blu has a decision of minister of finance on remuneration, each blu must have it (the decree of minister of finance). the detail on how to pay it, the blu leaders must make the technical guidelines based on it.” from what is suggested by the head of subdirectorate of blu financial coaching for education (ministry of finance), the next step that um must take after the establishment of the decree of minister of finance is to prepare technical guidelines and established as regulation of rector. as per the decree of minister of finance no. 390/kmk.05 year 2015, um gives remuneration to blu leaders, finance officials and technical officials, head of supervisory board, secretary of supervisory board, and members of supervisory board, as well as ux employees. table 6. ux remuneration object no remuneration object work unit name of management officials 1 the head university rector 2 chief of financial affairs university a. deputy rector ii b. head of general & financial bureau/uk 3 operational chiefs university a. deputy rectors i, iii, and iv b. head and secretary of institution c. head of akpik bureau d. head of upt/laboratorium/office/study center/service center faculties/ postgraduate a. dean/director of ppstgraduate b. deputy dean/postgraduate director assistant pascasarjana department/study program a. head of department/study program/division b. secretary of department/study program/division 4 supervisory board university a. chairperson b. secretary c. members 5 blu employees (educators and education staff) university/faculties/ postgraduate ux's remuneration applies pay for position concept at a value given on monthly basis and pay for performance to determine the remuneration amount to be received by employees. in blu financial management mechanism, there is a public service agencification. the government as the goods and services providers is not directly in touch with the society, rather it forms an agency to give the public service and this role is played by blu. the government as the principal and the agent as the service provider agree on a performance contract. in this performance contract, it set forth that the performance that blu must achieve. this performance achievement is then assessed and used as the basis to give remuneration. this is as told by the head of subdirectorate of blu financial coaching for education (ministry of finance) below: k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 121 “in blu, its implementation is far better in terms of its performance assessment. why? this is because in blu the performance measurement is clear. internally speaking, there is a performance contract between leaders and their subordinates plus since mid 2014 based on blu coaching mou between the then minister of finance and minister of education and culture there is a derivative of that mou. ux since 2014 has regularly sent its performance contract, from 2014 to 2016. it is used as one of the references in providing remuneration. particularly, to measure blu leaders’ remuneration.” the rector signs the performance contract based on key performance indicator (kpi) together with the director general of treasury. furthermore, the rector prepares and signs the sasaran kerja pegawai (skp) or emplooyees work target in order to perform the tasks and functions as well as realizing the performance contract. to achieve the performance set forth in this performance contract, many parties also sign skp to realize the performance contract. ux’s remuneration is a single salary using ux’s pnbp fund as its source for the tasks and functions embedded to the field of work and office of management officials, supervisory board and secretary of supervisory board, as well as ux employees based on the achievement of predetermined performance targets. when all regulations related to ux’s remuneration have been established, the next step is preparing a remuneration system, beginning from such processes as job analysis, job evaluation, structure formation and grading scale up to determination of remuneration amount. to support the job analysis at university x, a job analysis team is formed. the formation of this job analysis team is established under the decision of rector of university x number 22/un27/kp/2012 dated 3 january 2012. meanwhile, the steps in job analysis involve collecting data, preparing job description, determining job requirement, preparing job map and verifying the result of this job analysis. during the data collection stage, the data on jobs are collected for analysis. next, the jobs are described in job description forms wherein information on job identity, job position within the organizational structure, main tasks and functions of the jobs, task details (main and additional tasks), work relationship (internal and external), job responsibility as well as information on work environment is elaborated. based on the job description, job map is made by evaluating the jobs. this job evaluation is a part of human resources management process used to weigh a job to generate job value and job class. the value and class of a job are used to determine the fair and feasible salary in line with the work load and responsibility of the jobs. ux evaluates the jobs for educators and education staff through self-assesment method using 16 weighting factors in reference to the regulation of minister of pan and rb no 34 year 2011 (evaluation guideline) and regulation of head of bkn no 21 year 2011 (guideline for job evaluation). job map depicts the entire existing jobs and their position within the work unit and the number of human resources owned at an organization unit. this is done when the job structure and class are known. finally, the job rank table at ux is as follows: table 7. job rank no job name grade total score range 1 job class 17 17 7180 – 5601 2 job class 16 16 5600 – 4901 3 job class 15 15 4900 – 3901 4 job class 14 14 3900 – 2801 5 job class 13 13 2800 – 2351 6 job class 12 12 2350 – 1801 7 job class 11 11 1800 – 1451 8 job class 10 10 1450 – 1351 9 job class 9 9 1350 – 1251 10 job class 8 8 1250 – 1101 11 job class 7 7 1100 – 951 12 job class 6 6 950 – 851 k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 122 13 job class 5 5 850 – 741 14 job class 4 4 740 – 671 15 job class 3 3 670 – 651 16 job class 2 2 650 – 251 17 job class 1 1 250 – 1 the performance is assessed by comparing the target to the predetermined realization. the remuneration fee which comes from pnbp fund is determined at 30%, and performance incentive is determined at 70%. the performance incentive is given based on the achievement of performance indicators for educators, in accordance with law on teachers and lecturers no. 14 year 2005 article 72. the amount of remuneration is based on the performance achievement indicators for educators is determined as follows. table 8. performance achievement indicator for educators performance individual performance indicator conversion in credit for educators amount of remuneration salary incentive performance non-performing ≤ 50% ≤ 6 credits salary = (30% pnbp) poor 51% 80% 7 9 credits salary = (30% pnbp) 25% x (70% pnbp) good 81% 100% 10 12 credits salary = (30% pnbp) 100% x (70% pnbp) excellent 101% 150% 13 ± 16 credits salary = (30% pnbp) 150% x (70% pnbp) extraordinary 151% 200% 17 ± 24 credits salary = (30% pnbp) 200% x (70% pnbp) in case the credits achieved by employees reaches 6 credits, then the relevant employees shall receive the salary which comes from pnbp at 30%. if these educators for three months in a row are nonperforming, then the pnbp salary at 30% shall not be given. in case the credit achieved by educators exceeds 17 credits up to 24 credit, then the performance remuneration incentive shall be paid at the same amount as for extraordinary performance indicator. extraordinary performance is given to educators with ability to achieve extra performance, support the achievement of ux’s key performance indicator and priority performance indicator. for educators, the performance achievement is based on 2 components which include job implementation (skp, additional work, and creativity) with scoring weight of 60% and work behavior (such aspects as service orientation, integrity, commitment, discipline, cooperation, and leadership) with a scoring weight of 40%. the remuneration is given based on education system service, with several assumption in reference to the applicable regulations as follows: (1) each educator has a mandatory load (obligatory full teaching equivalence ewmp) of 12-16 credits which is performed in 5 business days (monday to friday) and (2) for educators: 7.5 hours x 22 days = 165 hours/month. the provisions of remuneration provision is governed under the regulation of rector as follows: 1. determinant indicators for remuneration amount remuneration value = job value x pnbp rupiah index a. incentive performance = pay for performance pnbp b. “poor” performance = 25% x (70% pnbp) c. “good” performance = 100% x (70% pnbp) d. “excellent” performance = 150% x (70% pnbp) e. “extraordinary” performance =200% x (70% pnbp) 2. determination of grading for educators with additional duties and educators k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 123 the performance achievement for educators with additional duties dan educators is submitted using ls (direct) mechanism. for performance achievement indicator of educators, each individual should at least do such activities as teaching, research, final project guidance, final project examiner, guidance for student’s community service, job training guidance, and academic guidance as the basis for determining remuneration for performance achievement of each semester. the calculation of the extent of performance achievement for educators is based on number of credits (at a minimum 12 credits and at a maximum 24 credits), therefore each of these activities should be equated or assessed in credit unit in the form of equivalency of activities assessed in credit unit. table 9. activity index in credit number activity item equivalent to 1 credit note extra teaching hours 50 minutes based on rektor decision a d v i s o r f o r final project/thesis/ dissertation a. s1/diploma b. s2 c. s3 6 students 3 students 2 students guidance of final projects of s1, s2 and s3 students (as per rector/wr 1 decision) final project examiner 4 students proposal examiner, final project examiner, pkl examiner, job training examiner, comprehensive test examiner advisor of students job training 2 5 stud ents/ 1 group kks advisor, kkl advisor, job training advisor academic advisor 12 students academic advisor after assessing and equivalencing all activities into credit, the next step is determining the extent of performance achievement of an educator (lecturer) for 1 semester based on the following assesment intervals: table 10. performance achievement interval no. interval of credits performance achievement 1 1724 200% 2 13 – 16 150% 3 10 – 12 100% 4 7 – 9 25% 5 0 6 0% 2. determining educator grading the calculation of the amount of performance achievement remuneration uses formula as performance achievement remuneration percentage multiplied by performance achievement percentage multiplied by total amount of remuneration. the remuneration policy for non-civil servant employees will be implemented by considering ux’s financial ability, reasonability and proportionality in the jobs with non-civil servant employee status. ux also applies the 13th remuneration, i.e. a remuneration to be given for the 13th month, which will refer to the government policy in providing the 13th salary as a part of pns income as mandated by the policy of law in general. in addition to pns, the 13th remuneration will also be given to non-civil servant employees. meanwhile, the policy of remuneration amount to be given for the 13th remuneration refers to the grading which has been set with a maximum percentage of 100% will be adjusted with blu’s pnbp prognosis ability and other policies at ux in the current year. k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 124 in accordance with law no. 3 year 1992 on social security for workers, government regulation no. 14 year 1993 on administration of social security for workers program and ministerial regulation of manpower and transmigration no. per-12/men/vi/2007 on technical guidance for participation registration, premium payment, compensation payment, and social security for workers service, then the company/institution must provide severance pay and rewards for their contribution to the company/institution based on their years of service. therefore, the rector shall give pension savings/pension insurance for non-civil servant employees. this pension savings/pension insurance/severance pay insurance can also be used as pension plan/pension for non-civil servant employees like insurance program for civil servants. this pension saving can be given to employees who have give a full contribution to ux up to their productive age limit/until they are in pension age. internalization when this remuneration policy was first introduced, some employees rejected it. this was because they lacked information on remuneration. such a circumstance is explained by the deputy dean ii fip below: “some protested when this remuneration was introduced for the first time, then we organized some dissemination on that regard. those protesting it usually did not know what their job classes are or how the assessment would be. however, after some explanation, well they eventually abode by it.” in addition to the protest due to lack of understanding at the initial implementation of remuneration, even until now ux still performs the mechanism of honorarium beyond the remuneration amount. this happens as well in the postgraduate unit. it is due to the lack of experts in specific disciplines. at the postgraduate unit, the fee for guidance and examination of final projects (s2 and s3) is paid beyond the remuneration mechanism. this is as suggested by the deputy dean fppsi below: “initially, thesis and dissertation guidances were included in the remuneration scheme, yet many professors objected it. eventually, we made a compromise to make thesis and dissertation guidances specifically paid from honorarium. it is justified since final project guidance requires specific expertise and the number of advisors is also limited, thus specifically for these activities, we still use honorarium for their payment.” deputy rector ii suggests a different reason for this. he says the honorarium at postgraduate unit is due to the transitional period that ux is having to shift from honorarium mechanism to remuneration one, hence to minimize the trouble it may cause, the shift towards remuneration mechanism will be performed gradually. deputy rector ii says as follows: “the point is that this is a transition, to prevent everyone from being shocked, if they are not included in the remuneration, they are paid separately from sources other than remuneration. this transition is intended to avoid any turmoil among lecturers. remuneration has its limit, how much something will be paid, how much an extra will be paid and no more payment for something more than that. most exceed the upper limit, hence lecturers wish to maintain it. steadily we will change it.” the researcher has informants from 2 faculties whose number of students is substantially different. this is intended to see what differences are made by this different number of students. the first opinion is stated by deputy dean ii fip below: “the rate determined in the remuneration has actually been good enough. we have many students, yet we have a large number of lecturers as well, thus thanks to this remuneration the distribution of welfare becomes more evenly spread. when we still used the honorarium mechanism, only a few people had the control. nowadays, since the assessment is wellk. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 125 defined, more people are grateful for this remuneration. this means they have their welfare improved.” similar opinion is suggested by the deputy dean fppsi below: “fppsi is a faculty, and we know nothing about honorarium mechanism, thus as remuneration is applied, our employees clearly happy for they will have additional income. moreover, we only have 21 lecturers here. the currently existing rate has been extremely good for our employees here.” from the interview with these 2 informants, it can be concluded that in practice, it turn out no difference whatsoever in terms of remuneration amount between faculties with less and more students. this is because the increased number of students is also followed by increased number of educators. thus, the more students they have, the more educators they will have as well. the implementation of remuneration at ux since early 2015 had led to some changes. one of the changes resulting from remuneration is the special team tasked to assess employee’s performance. another change is the use of performance assessment application. this application help educators organize the works they have done such as education, teaching, research, community service, supports and attendance. since its implementation, remuneration has changed educators’ behavior. these educators are more diligent in teaching and conducting research. this is as suggested by the deputy dean ii fip below: “since remuneration was introduced, the occuring change is obvious, lecturers are more eager in teaching, the attendance increased as well. this is because every extra teaching hour is counted as remuneration credits.” the deputy dean fppsi also explain more or less similarly as follows: “currently, lecturers are more dilligent in conducting research, at least each semester they have to publish a journal. this is beyond the research which has been funded. thus, it is this research which has not been sponsored which will be compensated in this remuneration. it is good for the university, considering research is also one factor considered to measure accreditation. for community service, well there has none so far, since the community service which can be compensated in remuneration is the one conducted at laboratory schools.” the interview is also supported with data from employment regarding the number of research which has increased since the introduction of remuneration at ux. the research conducted by educators increases significantly in semester 2 of 2016, i.e. 597 studies while in semester 2 of 2015 there were only 59 studies. this implies that remuneration improves educators’ performance in research. the change occuring since the introduction of remuneration for educators is improved attendence. this is as suggested by the head of employment division below: “the change in education staff since the introduction of remuneration is that they are more dilligent in terms of attendance (finger print). we know this because we check their attendance recap, from which we can see how dilligent they are in terms of attendance. however, we have not seen another change since the performance measurement is varied from one educator to another.” the expert staff of wr ii also states similar phenomenon as follows: “lecturers change significantly since they have a well-defined performance measurement. they teach more dilligently, so is in terms of research. meanwhile for education staff, no significant change is seen yet, they remain the same as before the remuneration was introduced. the performance measurement for education staff will be evaluated later. we still do not know which room needs improvement, but we will see it later.” k. y. maharani, b. hariadi, roekhudin/journal of accounting and business education, 4 (2), march 2020 126 the education staff performance measurement still needs re-evaluation. this is because the expected change from remuneration ideal has not been materialized yet. the aid such as application for educators is also expected to help measure the performance of education staff. conclusion based on the model developed by dambrin et al. (2007), four main conclusions can be drawn from this research. firstly, external pressure in the form of regulation which should be accepted by ux is the most common form of coercive isomorphism (harcourt et al., 2005). secondly, benchmarking with three universities with nearly similar characteristics in preparing the consideration of remuneration aspects is a form of mimetic isomorphism. thirdly, the technical guideline prepared by ux by using and modifying performance allowance regulation is a form of mimetic isomorphism. fourthly, at the beginning of remuneration introduction, turmoil occurs among employees due to lack of information on its calculation and job class of each employee. additionally, there is a specific condition applied in the postgraduate unit in relation to such activities as guiding and examining students’ final projects which are separated from the remuneration mechanism. it is expected that this research can give an input for refining the policies in relation to pressure and change of behavior towards the introduction of remuneration at ux. also, it is expected that this research would motivate other blu work units in improving their remuneration implementation. its limitation is its time which makes its exploration on remuneration is limited to a few informants. in addition, it also has the participation limitation since the researcher is not directly involved in the process of preparing and implementing remuneration, which possibly prevent the researcher from holistically understand the remuneration institutionalization process at ux. in order to understand remuneration from different perspective, it is recommended to use another analysis tool such as to see the behavior of those parties playing certain roles in remuneration since remuneration is actually related to individual welfare which results in the change in their behavior. references alawiya, n. yuliantiningsih, a. sudrajat, t. dan sari, d. p. y. p. 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(2002). studi kasus desain dan metode. penerjemah m. djauzi mudzakir-ed.1-11. rajawali pers. jakarta. l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 1 a review of corporate social responsibility: its perception, practice, impact, and challenges in nigeria lynda chineze ezechukwu1 anthonia uju uzuagu2 1,2 department of business education, university of nigeria, nsukka, enugu state, nigeria email: chineze.ezechukwu@unn.edu.ng doi: http://dx.doi.org/10.26675/jabe.v7i1.26867 abstract: corporate social responsibility (csr) has received comparatively less attention in developing countries like nigeria. this review provides an overview of csr in general including the conceptual definitions, aspects and benefits of csr; and subsequently, focuses on the nigerian context including the perception, practice, impact and contemporary challenges of csr implementation in nigeria. csr, which has been defined in numerous ways, basically refers to the demand on business organisations to extend their relevance beyond profit making to taking responsibility for the welfare of their environment and stakeholders. five aspects of csr are discussed including economic, legal, ethical, philanthropic and political responsibilities. the perception and practice of csr in nigeria has been largely in the aspect of philanthropic responsibilities and although csr activities of corporate organisations has been widely reported, the impact is yet apparently very low. contributory to the reported low levels of csr define the tone of csr obligations of corporations in nigeria is still largely voluntary, unlike in some countries like india and china that have made csr mandatory by law. recent empirical studies reviewed on the outcomes of csr in nigeria showed both positive and negative outcomes of csr on businesses, suggesting that more research is needed to validate the findings. finally, challenges to csr implementation in nigeria include: failure of government, lack of an effective csr enforcement framework, institutionalized corruption as well as political and social insecurity. article history received: 29 january 2022 revised: 12 june 2022 accepted: 6 august 2022 keywords corporate organisations, corporate social responsibility, corporate philanthropy, csr in nigeria. citation: ezechukwu, l.c., & uzuagu, a.u. (2022). a review of corporate social responsibility: its perception, practice, impact, and challenges in nigeria. journal of accounting and business education, 7(1),1-24 introduction corporate social responsibility (csr) has attained significance in the global economy, evidenced by increasing numbers of research and discussions on the topic, as well as innovations in its conceptualization and practice. this rising attention drawn to csr in recent times is traceable to rising globalization and evolution of international trade, reflected in heightened complexity of business activities coupled with growing demands for corporate citizenship and transparency in corporate governance. not only governments, but also international institutions and other stakeholders have been concerning in csr moreover due to the rising of globalization. that concern are dominantly caused by advances in communication technology; severe and upper class corporate ethics offense; as well as conciousness of the limitations of jurisdiction to effectively address all the issues that csr embraces (fontaine, 2013). a common tenet of csr is that corporate organisations should not only focus on profit journal of accounting and business education p-issn 2528-7281 e-issn 2528-729x e-mail: jabe.journal@um.ac.id http://journal2.um.ac.id/index.php/jabe/ l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 2 maximization as they endure higher onuses to the society. these responsibilities, of which some are mandatory and while other are voluntary, are stipulated by global provision (ako, 2014). the development of many international laws regarding csr, has seen the concept of csr evolving from being seen as merely a voluntary self-regulation policy of an organisation to a mandatory obligation. it has been argued that soft laws are not effective for stipulating csr, and that hard laws are prerequisite to effectively do so (ako, 2014). the proliferation of innovations in the conceptualization and practice of csr around the world has led to the development of standards, structures and frameworks by which csr is being governed. for instance, a number of metrics (e.g. the financial times stocks exchange index, the dow jones sustainability index) have emerged for csr-related evaluation of corporations around the world based on a number of criteria such as environmental protection, workers’ health and safety, human rights, accountability and labour standards (akinleye & adedayo, 2017; lambooy, 2014; nolan, 2014). in this era of industrial revolution marked with rising numbers of multinational corporations (mncs) in the various industries, csr has become especially relevant and has been touted as having the potential to contribute positively to the development of businesses and the society at large. hence an increasing number of business organisations in nigeria are beginning to set up strategic csr agenda. historically, csr research has received overwhelming western-centric dominance being mostly from within the developed countries of north america and europe and lately from transitional or emerging economies like china and india, but has received comparatively less attention in developing countries like nigeria (akinleye & adedayo, 2017). however, there has been a notable rise in csr research in nigeria within the last two decades, attesting to the increasing attention drawn to the subject in recent times. this increasing attention is traceable to the growing concern and agitation of host communities and government policy makers regarding the environmental degradation effects of the mncs operating in nigeria, especially in the oil and gas industry. the reckless operations of these mncs in nigeria resulted in severe environmental pollution in form of oil spillages, gas flaring, and contamination of water bodies with toxic waste, which in turn destroyed the sources of livelihood of the predominantly farming and fishing host communities, leading to increased militancy and community agitations, and ultimately raised concerns regarding these corporate organisations’ roles in the nigerian society (osemek, adegbite, adegbite, 2016). the increased attention to csr delivery by mncs is further strengthened by the failure of successive nigerian governments to accomplish their basic obligation of providing infrastructure and social amenities for the communities, which has led to increased community dependence and targeting of mncs to solve the basic socio-economic problems especially in the oil-rich niger-delta region of nigeria. the attention to csr in nigeria however, goes beyond the oil mncs as available literature shows that the importance and role of csr in nigeria has also been recognized beyond the oil and gas sector to include the manufacturing, banking and other sectors of the economy. in this review, we discuss the general conceptual definitions, dimensions and benefits of csr, and then subsequently, its perception and practice, outcomes as well as implementation challenges in nigeria from empirical literature evidence. conceptual definitions of corporate social responsibility csr is a multifaceted concept which has been defined in different ways by different entities in both corporate, governmental, academic settings, reflecting different aspects and emphases. however, there is yet a lack of consensus on the definition and meaning of csr. perhaps the easiest way to conceptualize csr would be to examine each of the words that make up the construct. in the first place therefore, the word ‘corporate’ originally referred to large business organisations or companies. however, in its present rendering, it has evolved to include small and medium scale enterprises (smes). although the society today focuses more on large organisations because they are more visible, smaller enterprises are referenced and included as well. hence the term ‘corporate’ might as well be articulated simply as “any business entity” (carroll & brown, 2018). in addition, some not-for-profit organisations such as the united nations and amnesty international are also considered ‘corporate’ organisations. the next key word “social” has to do with a connection to human life and society, involving the wellbeing of human l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 3 communities. in the corporate context, although society had been earlier conceived exclusively as involving only the human stakeholders that may be influenced by corporate actions, its meaning has been expanded today to embrace flora and fauna, and the natural biosphere as well (carroll & brown, 2018). finally, responsibility entails the state of being held accountable by or a sense of obligation to society. over the years, csr has been conceptualized or defined in numerous ways. a popular school of thought conceptualized csr as comprising three components: economic, environmental and social, referred to as the triple bottom line (tbl). the tbl concept of csr, states that business organisations do not only have one objective, making profits, but that they also owe the obligation to add environmental and social values to society. thus, in addition to pointing out to corporations the economic value they add, the tbl approach to csr points out the environmental and social values they add or destroy in the society (sridhar & jones, 2013). in other words, businesses need to be concerned with more than just profit but also the environmental and social impact of the operations. csr therefore entails managing these impacts such that the benefits are maximized and the downsides minimized (fontaine, 2013). as defined by the world bank, csr refers to a business commitment to support the development of sustainable economic – involving families, employees, the local community and society at large to escalate the quality of life from the point of view of business and community development (ward, 2004). csr refers to those actions which society expects from the business or corporate organisations, which are geared towards adding value to the society. it entails those public actions which society expects from the corporations to ensure that society is protected from any adverse activities of the corporate organisations and thereby ensuring a cordial relationship between the business and the society (chikaji & abdullahi, 2016). csr, also referred to as corporate social performance, or corporate citizenship, has been defined as a form of self-regulation integrated into a business organisation’s model of operation by which the organisation keeps track of and corroborates its compliance with the spirit of the law, ethical standards, and norms (fontaine, 2013). csr advocates for the corporate organisation to take responsibility for its actions and to make positive impacts on the environment, employees, consumers, other stakeholders and society at large through its activities. csr entails businesses aligning their behaviour and values with the needs and expectations of their stakeholders including the employees, customers, investors, suppliers, regulators, and the society as a whole (fontaine, 2013). according to olaroyeke and nasieku (2015), csr revolves around companies’ interactions with society, and encompasses such issues as corporate philanthropy/giving, corporate citizenship, corporate community relations, and corporate social marketing. one of the simplest definitions that have been put forward (reinhardt, stavins, vietor, 2008) has it that csr means “sacrificing profits in the social interest.” carroll (2016) offered a conceptual definition of csr as comprising the economic, legal, ethical, and philanthropic (discretionary) expectations that the general society places on businesses at any given time. csr is also seen as a business model or mechanism that requires businesses to accept a change in outlook by recognizing their responsibilities to their environment and stakeholders (employees, suppliers, consumers etc.), and not just their shareholders. thus, csr includes being environment-friendly, employee-friendly, investor-friendly, and respectful of the businesses’ host communities (ananaba & chukwuka, 2016; lentner, szegedi, tatay, 2015). mncs and other corporate organisations develop own operational csr definition/policy, which usually stipulates the organisation’s commitment to operate legally and ethically while contributing to economic development as well as improving the quality of life of its workforce, the local community and society at large. for reviews on csr definitions, see aminu, harashid, azlan, (2015) and dahlsrud (2008). the aspects of corporate social responsibility available literature shows csr to be a composite concept comprising various aspects which include: economic, legal, ethical, philanthropic and political csr (figure 1). in his popular pyramid of csr, carroll (1991) indicated that csr consists of four aspects of responsibilities namely: economic, legal, ethical and philanthropic, however a fifth aspect – political csr is beginning to gain popularity (de jong, harkink, barth, 2018; helg, 2007; maak, pless, voegtlin, 2016). l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 4 economic corporate social responsibility the economic aspect/dimension of csr entails the profitability of the business organisations. in other words, business organisations are expected to be profitable by providing goods and services needed by society, making profits in the process. at first glance, the profitability of a business might not appear as a social responsibility, because it appears to primarily benefit the organisation, but it is also beneficial to the society. by providing the needed goods and services, businesses make profits which in turn provide the incentive and resources for the business owners and shareholders to continue operating the business. thus, the profitability of a business is essential to its sustainability; because if the business does not make profit, it cannot continue to exist to provide the goods and services that society needs. economic csr is therefore considered the foundation upon which other corporate social responsibilities rest carroll, (2016), as there would be no other responsibility if the business ceases to operate and make profits. economic csr reveals the financial aspects and have both direct and indirect impact on the organisation’s performance. historically, business organisations were conceived as economic entities aimed at providing goods and services for the society and making as much profit as possible (lentner et al., 2015). hence, profit was entrenched as the primary motive for business. as such, its primary role was to produce the services and goods needed by consumers and to make considerable profit in the process. however, the increasing awareness and emphasis on csr has come to dampen the excessive emphasis on profit-making. economic csr forms the pillar for the financial involvement of the organisation in socially valuable projects e.g. support for sporting events or support for training courses and education. also, economic csr forms a basis for fostering relationships with key stakeholders – investors, employees, suppliers, customers, and the general community (paulík et al., 2015). legal corporate social responsibility the profit motive is not all that is sanctioned by the society for businesses to operate; it is also expected that businesses comply with the extant regulations promulgated by the law makers of the land figure 1. aspects of corporate social responsibility l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 5 regarding the basic rules under which businesses must operate. thus, the legal responsibilities entail the obligation that the business organisation carries out its operations within the ambits of existing (local and international) laws. as a condition for their continued operation, businesses are required to adhere to the relevant stipulated laws, which according to carroll (2016), “reflect society’s view of ‘codified ethics’ presenting the fundamental views of fair business practices as established by lawmakers at federal, state and local levels.” legal responsibilities of business organisations exist in form of human rights laws, employment laws, tax regulations, consumer protection laws, laws stipulating competition with other companies, health and safety of employees among others (lambooy, 2014; nolan, 2014). acts and decrees determine regulation, and aim to ensure safety, minimize risk, and restore confidence in businesses. in practice, the legal statutes are complemented by the compliance function through the guidance of trade associations, and various supervisory bodies (decker & sale, 2009; hussaini, 2020). furthermore, it is common practice to have compliance officers in high level positions in company organisation charts, attesting to the importance of the legal dimension of csr. carroll (2016) summarizes the legal csr as consisting of the expectations/obligations on businesses to: operate in a manner congruent with stipulations of government and law; adhere to various federal, state, and local regulations; conduct themselves as law-abiding corporate citizens; fulfill all their legal obligations to the stakeholders; provide goods and services that meet minimum legal requirements at least. legal csr is binding on corporate organisations and failure to be legally responsible could incur dire consequences for the organisation. ethical corporate social responsibility the ethical aspect of csr is somewhat closely related to the legal aspect. ethical aspect of csr has the legal responsibilities as a background but extend beyond those expectations that are codified into law. the ethical responsibilities stipulate that business organisations are expected to operate in an ethical manner embracing worthy standards, practices, activities, and norms, which may or may not have been codified into law. thus, ethical csr holds that laws are essential but not sufficient (carroll, 2016). ethical responsibilities comprise practices that are prohibited or expected by the society even though not categorized as law, including such as the requirement to do right, be just and fair, and to avoid harm (carroll, 1991). business organisations are obligated to take responsibility for upholding the morality, principles, values, standards and norms that reflect the expectations of the consumers, employees, community and other stakeholders. the codes of ethics also include the basic principles of respect and transparency, treating employers right, being environmentally friendly, rejection of corruption, fair conduct, and integrity in business (lentner et al., 2015; paulík et al., 2015). although ethical responsibilities may not have outright legal implications or liabilities for the company, it is in the best interest of the company to operate ethically as this will improve their public image and reputation with stakeholders; consumers will feel more comfortable patronizing the company as well. thus, by enhancing corporate image and reputation, ethical csr could serve as a tool for marketing the organisation to prospective employees and other stakeholders (adda, azigwe, awuni 2016). summarily, the ethical responsibilities of businesses to include their operating in a manner that is congruent with expectations of societal and ethical norms; recognizing and accepting new or changing moral and ethical standards adopted by society; and preventing the compromise of ethical norms in the quest to achieve business goals (carroll, 2016). philanthropic corporate social responsibility philanthropic csr also referred to as corporate philanthropy or corporate giving involves actions by which business organisations “give back” to the society or community in which they exist and operate. the argument is that the host communities are often on the receiving end of the activities of these companies, from using up natural resources to causing different forms of pollution, therefore the companies are expected to give back in some way as a form of compensation. corporate philanthropy, which incorporates the environmental and social components of the tbl, is a major and possibly the most popular component of the larger csr concept and both terms are often used interchangeably. l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 6 corporate organisations usually carry out the environmental and social obligations of the tbl through philanthropic activities. philanthropic responsibility is additional to the obligations which the corporation has to its owners and the basic regulatory factors imposed by law that constrain its activities within the jurisdiction in which it operates. according to carroll (1991), philanthropic responsibilities includes the expectation that businesses be good corporate citizens by giving back from their proceeds to improve the quality of life and welfare of the society or host communities. philanthropic responsibilities are generally not mandated by law or from the ethical viewpoint, but are discretionary and voluntary on the part of the organisations. this means that the organisation is not considered as illegitimate or unethical if they fail to engage in philanthropy. however, some organisations may consider it ethical to engage in philanthropic activities. in keeping with their perceived philanthropic responsibilities, companies engage in various forms of giving including but not limited to free donations of their product(s) or service(s), financial donations, volunteering by employees and management, sponsorship of community development projects such as environmental protection, infrastructure, education, arts, sports and other discretionary contributions to the community or stakeholder groups (carroll, 2016; hussaini, 2020; pour, nazari, emami, 2014). corporate philanthropy reflects some form of altruistic behaviour on the part of the organisation, and is distinguished into internal corporate philanthropy, which is that directed at the organisation’s own employees, and external corporate philanthropy, which is towards a third party (ke, qiu, jiang, 2015). it has been debated however, whether corporate philanthropy is indeed pure altruism (without any expectation of reward) or used as a commercial strategy in anticipation of returns. while some studies have suggested that some companies do not capitalize on marketing opportunities in engaging corporate philanthropy, there appears to be some evidence that some businesses are far more commercially orientated towards corporate philanthropy than might be supposed (roger, 1997). political corporate social responsibility in addition to the four above-mentioned dimensions of csr, a fifth dimension, political csr, is emerging lately, highlighting an aspect of csr which is, to some extent, contingent upon sociopolitical factors in the country in which it is evolving (carroll & brown, 2018). the proponents of political csr hold that under the current conditions of globalization, the clear-cut divide between private business and nation/state governance no longer holds as many corporate firms especially mncs have started to go beyond their legal obligations to take up some political responsibilities in order to fill up regulatory gaps in global governance (scherer & palazzo, 2011). thus, political csr concerns the political role of businesses, in addressing regulatory gaps in global governance reflected in weak or insufficient social and environmental standards in the face of varying sociopolitical factors of various countries (scherer, palazzo, matten, 2014; wickert, 2016). although, there are diverse philosophical view-points on the subject, a central theme of political csr is that, beyond their economic and legal responsibilities, corporate organisations as political actors, are capable of and ought to take up social and political responsibilities under democratic governance (carroll & brown, 2018). literature evidence shows some mncs that have already started to go beyond the common understanding of csr to take up critical roles in responsibilities once regarded as the duty of government such as engaging in education, social security, public health, protection of human rights in countries with repressive regimes; addressing social ills such as malnutrition, aids and illiteracy; engaging in self-regulation to fill global gaps in legal frameworks and moral orientation; as well as promoting peace and stability of the society – responsibilities traditionally regarded as the duty of government (scherer & palazzo, 2007, 2011). some corporations do not merely follow the traditional external expectations of complying with societal standards in legal and moral terms; they engage in discourses aimed at positioning and redefining the standards and expectations in keeping with the increasing globalization. thus, csr is increasingly displayed in corporate involvement in the political process of solving societal problems, often on a global scale (scherer & palazzo, 2007). although the political csr has been somewhat controversial, recent studies into the foundations, types and outcome of political csr show that the concept is gaining significant momentum (carroll & brown, 2018; hussain & moriarty, 2018; maak et al., 2016). l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 7 benefits of corporate social responsibility csr benefits both the corporate organisation and society alike. however, it is difficult to generalize who benefits more from csr as it varies from place to place depending on the prevailing circumstances. although csr has been generally conceived as the expectations of society that corporations extend their activities beyond profit making to contribute to activities that are beneficial to the society, literature evidence shows that the corporations themselves also benefit from csr in one way or the other. thus, the benefits of csr can be considered on both the side of the organisation as well as the society or stakeholders although some of the benefits are closely linked to both sides. it has been asserted that corporate organisations could benefit both financially and otherwise from csr operations (oyewumi, ogunmeru, oboh, 2018). csr in general and corporate philanthropy in particular, has been touted to offer a number of benefits to the companies including but not limited to: improvement of brand image and company’s reputation; attracting investors, as well as increased attractiveness and ability to retain employees (madugba & okafor, 2016). ke et al. (2015) posit that csr enhances the reputation capital of the company, yielding a positive impact on the emotional commitment of the employees, as well as promoting employees’ motivation to hard work and better performance for the good of the organisation. studies have confirmed the significant contributions that csr can make to a firm’ promotional effort, underscoring the marketing possibilities and advantages that accompany corporate philanthropy, especially in company image enhancement and public relations (roger, 1997). in a study of chinese-listed firms, zhang et al. (2020) observed increase in corporate philanthropy of firms that received government sanctions for fraudulent behaviour, suggesting the use of corporate philanthropy by the firms as a strategy to regain their legitimacy and acceptance, after being sanctioned by the government for fraudulent practices. in addition, disclosure of csr information by a firm is important as it may serve as a channel of advertising offering the firm a comparative marketing advantage (oyewumi et al., 2018). however, it has been asserted that often the benefits of csr fall heavily in favor of the business organisations involved, where such organisations invest a comparatively small amount into social projects and then capitalize on such investments to promote their brand and gain access to the markets. as such, the organisations receive public relations and brand building that far outweighs their investment in socially responsible projects (ananaba & chukwuka, 2016). csr in the form of corporate philanthropy (external csr) is directly beneficial to the society, environment and stakeholders as they are the direct recipient of the philanthropic activities of corporate organisations. these philanthropic gestures which include gifts and donations, and infrastructural projects as noted earlier, go a long way to improve the welfare of the communities and the environment. on the other hand, the internal csr directly benefits the internal employees, and provide a caring and positive atmosphere for their work (ke et al., 2015). having presented, so far, a general overview of the definitions, aspects and benefits of csr, which are universally applicable, the succeeding sections focus on the perception, practice, impact and challenges of csr implementation in the context of nigeria. perception and practice of corporate social responsibility in nigeria historically, csr in nigeria was basically understood as philanthropy aimed towards addressing the myriad of socio-economic challenges of the country including provision of education and healthcare, poverty alleviation, and infrastructure development (madugba & okafor, 2016). while this is largely still the case, there is evidence of a gradual development towards inclusion of popular western standards/expectations of csr such as fair trade, consumer protection, and green manufacturing (amaeshi et al., 2006). csr is mainly seen by corporate organisations in nigeria and their stakeholders from the philanthropic perspective (mamudu et al., 2021). this perception is reflected in the csr philosophy, statements and practices of the organisations, and is largely informed by the local realities and needs peculiar to developing countries such as nigeria (amaeshi et al., 2006). furthermore, there has been increasing awareness and importance attached to csr by corporate organisations in nigeria, reflected by reports of significant amounts spent by these organisations on l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 8 various community-based projects captioned as csr (lawal, nageri, olanipekun, 2018). csr is seen as the duty of care owed the immediate community and society at large by the companies to compensate for the adverse effects of their operations, such as air and water pollution, damage of roads due to heavy vehicles, and so on (osemeke et al., 2016). csr initiatives of corporate organisations in nigeria involve mostly such ventures as sponsorships of sports, healthcare and education, youth empowerment programs, cash and material donations as well as infrastructural projects e.g. construction, rehabilitation or maintenance of roads, provision of water boreholes, schools and healthcare facilities, etc. (madugba & okafor, 2016; malik & nadeem, 2014; osemeke et al., 2016). hence, the perception and practice of csr in nigeria has been largely at the discretionary/philanthropic level. corporate philanthropy has been widely practiced by the oil mncs in the niger delta area of nigeria, making the communities in the area, according to mamudu et al. (2021), to initially see themselves as "victims of circumstances" rather than significant stakeholders or players in the developmental process. nowadays, the host communities see these acts of corporate philanthropy as not altruism but a form of rent paid by the mncs for the abuse of the host environment and resources (mamudu et al., 2021). though the oil mncs have emphasized partnership over recent years, their general perception by the host communities as being exploitative has not changed (elenwo & adjarho, 2019; mamudu et al., 2021). nevertheless, it has been observed that indigenous corporate entities, financial institutions and mncs in nigeria are beginning to take csr initiatives more seriously, with some setting up csr departments and publishing report of their csr expenditure as part of their annual reports (osemeke et al., 2016). although csr in nigeria is said to be popularly understood in terms of the corporate philanthropic activities, it is worthy of note that the obligations related to other (ethical and legal) aspects of csr, are also found enshrined in extant codes such as the nigerian extractive industries transparency initiative (neiti) act of 2007 and the nigerian code of corporate governance (nccg) of 2018, to mention a few. the neiti act stipulates ethical codes of accountability and transparency for corporate organisations in the petroleum sector (meyer, 2019), while the nccg provides a combined corporate governance code for all corporate organisations in nigeria (imhanze & belonwu, 2019; ozili, 2020). the nccg stipulates, among others, the obligation that corporate organisations should pay adequate attention to sustainability issues including environment, social, occupational and community health and safety, which project the company as a responsible corporate citizen (imhanze & belonwu, 2019; ozili, 2020). the issuance of these codes has had positive effects in improving compliance of corporate organisations in nigeria to all the aspects of csr. however, despite the remarkable provisions of these codes, they have been criticized for being predominantly voluntary and administrative, lacking concrete enforcement strategies, as well as sanctions for non-compliance with its provisions (ihugba, 2012; imhanze & belonwu, 2019). hence the tone of csr obligation by corporations in nigeria is still largely voluntary and not expressly being mandated by law. csr has been generally considered to be voluntary rather than mandatory, but in recent years, there is a gradual shift towards making csr legally-binding as seen in an increasing number of countries (e.g. india, china and indonesia), which have enacted corporate laws mandating corporations with net profits above certain thresholds, to both spend, as well as disclose the amount spent on (philanthropic) csr activities (adhikari, 2014; amee, 2017; lin, 2020; permana, 2019). for instance, in india, corporate organisations have been mandated through the companies act of 2013 to spend 2% of their net profit on csr (amee, 2017). this increasing trend toward mandating csr has since become a subject of debate in public, academic, legal and corporate discussions, with divided opinions as to whether, csr should be voluntary or mandatory (adhikari, 2014; amee, 2017; lin, 2020; permana, 2019). impact of corporate social responsibility in nigeria csr research in nigeria is relatively sparse but on the increase. a closer look at available recent literature (see table 1) suggests increasing attractiveness and awareness of csr initiatives as well as research on corporate organisations in the various sectors such as oil and gas, banking, and manufacturing l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 9 sectors in nigeria (see table 1). there has been a number of studies on relationships and impact of csr on organisational financial outcomes with mixed results in that while some reported a positive impact (abubakar, 2018; enughulu & dabor, 2019; irabora, 2019; ogungbade, 2021), others reported insignificant relationship (tijani et al., 2017) and negative relationships (madugba & okafor, 2016; ogungbade, 2021; oyewumi et al., 2018). in terms of financial returns from csr, it has been argued that banking firms do not benefit commensurately as much as manufacturing firms and mncs in relation to the amounts spent on csr projects (oyewumi et al., 2018). corporate organisations in nigeria commit to csr through various means while putting a number of factors into consideration such as company policy, size, and culture, industry factors, and stakeholders’ demand (madugba & okafor, 2016). these factors, among other, have been shown to have significant relationship to csr (miko & ya’u, 2018; obi & ode-ichakpa, 2020; yahaya & apochi, 2021). in addition to its relationship with organisational financial performance, csr activities in concert with the disclosure of such, has also been shown to significantly and positively influence stakeholders’ perception of the organisation (okoi et al., 2021), consumer purchasing decisions and behaviour potluri et al., (2020), employees’ perceptions and exhibition of organisational citizenship behavior (onyishi et al., 2020), as well as environmental preservation and the control of youth restiveness in local communities (sokefun & oduyoye, 2018). challenges of corporate social responsibility implementation in nigeria evidences from literature suggest that csr in the nigerian corporate sector has not been efficient as to provide maximum engagement of businesses in society and nation building, but has rather been culturally oriented, reflecting the ethnicity, religion, and traditions of the people, which involves communal lifestyle and togetherness (osemeke et al., 2016). the failure by successive governments of nigeria to meet the basic obligation of providing social amenities has increasingly brought in the private sector, especially oil mncs, to play roles that otherwise should be the responsibility of the government, as the local communities increasingly depend on and target the mncs to provide solutions to their economic problems. governments in nigeria at all levels, have failed to sufficiently provide basic infrastructure needed by the populace such as electricity, roads, medical equipment, schools, as well as fallen short in ensuring law and order and security of the citizens. this is largely blamed on corruption, bad governance, lack of accountability and transparency among public officials, lack of enabling environment and weak institutional framework among other issues (ananaba & chukwuka, 2016; mamudu et al., 2021; osemeke et al., 2016). authors have cited systemic corruption and political influence as major banes of csr implementation in nigeria. corruption has become endemic in nigeria and poses a major challenge to mncs’ implementation of csr, as resources allotted for csr to improve the welfare of the community gets diverted and used for personal and selfish aggrandizement when it gets into the hands of community leaders and officials (ananaba & chukwuka, 2016; dilinye & agbaenyi, 2021). furthermore, the lack of an efficient enforcement framework established for csr by government legislation, gaps in corporate governance, as well as incompetence of the regulatory bodies have been cited as impinging on csr implementation in nigeria (dilinye & agbaenyi, 2021). consequently, csr initiatives by corporate organisations in nigeria have been mostly discretionary/philanthropic; meanwhile, negligence and failure of some companies to adhere to csr principles have been widespread (dilinye & agbaenyi, 2021; ijaiya, 2015; osemeke et al., 2016). also, several reports have documented low levels of csr implementation by corporate organisations in nigeria, due to the lack of csr enforcement and largely voluntary tone of the extant corporate governance codes (elenwo & adjarho, 2019; ihugba, 2012; imhanze & belonwu, 2019; lawal et al., 2018; onuoha & nkwor, 2021). while corporate organisations have a social responsibility to their host communities, the government ought to provide the framework within which it can work out effectively (ijaiya, 2015). l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 10 in addition, political and social insecurity militate against not just csr but the ease of doing business in nigeria in general. it is a well-known fact that political and social security are fundamental factors that encourage operation of business organisations in any nation. and increase in business operations and economic activities in turn potentially increase csr activities as more resources are available for csr implementation by the companies. however, with the increase in insurgency in nigeria, the business environment has suffered greatly and this has negatively affected csr implementation in nigeria to say the least (ananaba & chukwuka, 2016). conclusion this paper reviewed the concept of corporate social responsibility, its perception and practice, effects and outcomes as well as challenges in nigeria. the concept of csr has remained a subject of academic and business discussions and is seen globally as an imperative for any reputable business organisation. several quantitative researches on csr in nigeria (table 1) have been carried out, with most of the results being the same, but some are still mixed. this suggests the need for more research to validate the findings. besides, the available literature suggests that, while the practice of csr by corporate organisations in nigeria is more of the philanthropic aspect, the extent of implementation of csr in nigeria is still considered relatively low. identified challenges to csr implementation in nigeria include: failure of governments, lack of an effective csr enforcement framework, institutionalized corruption as well as political and social insecurity. the lack of enforcement and voluntary tone by which the csr obligations are presented in the corporate laws of nigeria have been blamed for the low level of csr compliance, hence authors have advocated for csr to be made mandatory for corporations in nigeria (ihugba, 2012). improvements can be achieved by compulsory regulation of csr and increasing the enforcement powers of the corporate laws. with these in place alongside the increasing trends and effects of globalization, it is hoped that there will be appreciable improvements in csr impact and research in nigeria in the near future. l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 11 table 1: summary of some recent empirical studies on corporate social responsibility in nigeria s/n focus of study firm/ sector key findings references 1. relationship between csr and organisational/ financial performance of firms manufacturing direct positive relationship between csr and financial performance of the firm mediated by employee performance; insignificant relationship between operating cash flow and csr (igbekoyi, 2020; olaniyan et al., 2021; olaoye & olaniyan, 2021) banking csr investment is negatively associated with financial performance, while csr disclosure is positively associated; return on capital had positive significant relationship with csr while earnings per share and dividend per share had negative significant relationship with csr. (madugba & okafor, 2016; oyewumi et al., 2018) banking insignificant relationship between csr and financial performance. significant positive relationship between csr and financial performance in terms of return on investment, return on asset, return on equity, market-to-book value. (abubakar, 2018; enughulu & dabor, 2019; irabora, 2019; tijani et al., 2017) banking csr investments on community development has a positive and significant effect on financial performance; csr on education and health has insignificant positive and negative effects respectively on financial performance of the banks. (ogungbade, 2021) non-finance firms csr significantly affected the organisational performance indicators gross profit margin, profit before tax margin and earnings before tax margin. return on equity and firm size are positively and significantly related to csr cost; firm size partially mediates the relationship between csr cost and return on equity. (osazevbaru et al., 2021; tapang et al., 2021) industrial significant relationship between csr and customer relations; significant relationship between csr and corporate image. (akinbola et al., 2018) telecommunication positive significant relationship between economic, legal, ethical, and philanthropic csr and the company’s performance; positive influence on corporate image and consumer patronage (ogunsanwo & ajayi, 2018; okolo, 2019) l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 12 2. level of csr implementation by corporate organisations in nigeria banking & manufacturing low level of csr implementation by the banks; manufacturing firms expend more on crs activities than banking firms. (lawal et al., 2018; ogujiofor & ofor, 2017) smes csr practices by smes are minimal and at an informal level. (efiong et al., 2013) manufacturing low and insignificant extent of csr activities by the studied firms; absorbed and unabsorbed slack resources have significant positive effects on csr activities. (onuoha & nkwor, 2021) corporate corporate organisations have contributed to the well-being of their host communities through csr projects. (adamolekun & ogedengbe, 2020) oil and gas poor commitment of the oil companies in implementation of csr from the community’s perception; the companies carry out only convenient projects rather than what the communities need. although oil companies have invested in csr, the general perception by host communities has not changed, due to the unpleasant experiences in the past; huge amounts of money have been spent by the oil mncs for csr programs in the region without significant development. interviewed residents felt that the protracted environmental pollution caused by the oil mncs’ operations in the region had practically eclipsed the positive impact of their csr activities (elenwo & adjarho, 2019; essien & inyang, 2017; mamudu et al., 2021) oil and gas community development is influenced by the oil company’s economic, legal, health-care and women education csr activities; rural women depend on csr interventions of oil mncs to address some of the logistical and cultural challenges associated with women’s access to post-secondary education in local communities. (kobani & amadi, 2021; uduji et al., 2020) mncs low contribution of mncs in csr for provision of health care services and skill development for student support in community secondary schools; low participation of mncs in funding and provision of infrastructural facilities for university business education programmes in rivers state. csr significantly affected economic, environmental and social sustainability of (dambo & wokocha, 2021; ivwurie & akpan, 2021; ogbuagu & onyeike, 2021) l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 13 mncs. 3. csr issues in the nigerian telecommunications industry telecommunications failure of telecommunications companies to apply csr adequately due to exploitation of resources without strict adherence to rules of csr as well as political influence, corrupt practices, embezzlement and incompetence of the regulatory body (dilinye & agbaenyi, 2021) 4. csr reporting and financial performance industrial low level of csr reporting of the firm studied; csr reporting positively enhanced the company’s financial performance; return on asset and firm size have positive and significant effect on the csr disclosure. (abubakar et al., 2020; adesunloro et al., 2019) manufacturing no significant difference in the level of environmental accounts disclosure practice of the companies from 2007 to 2017. (worimegbe & oyewole, 2021) 5. impact of csr on profitability of firms mncs csr exerts a positive and statistically significant effect on firm profitability, return on equity and market success. csr costs have positive impact on firm profitability; no significant relationship between csr cost and investment policy (nnaoma & omotosho, 2017; okolie & igbini, 2020; osisioma et al., 2015) manufacturing csr has a significant positive impact on profitability in terms of profit-before-tax, turnover, asset use efficiency and return on equity (olaitan et al., 2020; worimegbe, 2021) telecommunications csr expenditure impacted positively on profitability, providing good returns for the company in terms of profit after tax. (osagie, 2017) banking significant positive relationship between csr expenditure and profitability; positive association between csr expenditure and profitability in terms of profit after tax. (oladipo et al., 2015) oil and gas strong positive relationship between csr accounting and profitability. (ohaka & ogaluzor, 2018) smes csr has a significant and positive effect on the price-earnings ratio (abada et al., 2021) 6. company characteristics corporate firms ownership concentration, corporate tax and firm size have positive and significant impact on csr. no significant effects of (mgbame et al., 2017; miko & ya’u, 2018; obi & ode l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 14 and csr compliance board size on csr reporting; board gender diversity, firm size and leverage show significant effects. positive effect of return on equity and asset size on csr; sales growth has a negative effect. negative relationship between csr performance and tax aggressiveness; ichakpa, 2020; odoemelam et al., 2020; yahaya & apochi, 2021) banking firm size and return on asset were positively related to csr disclosure; while leverage was negatively related. transformational leadership style and business information use have positive influence on csr practice. (akintunde et al., 2021; soyinka et al., 2017) industrial & manufacturing profitability, firm size and dividend paid positively and significantly influence the csr practice of the listed firms. csr has a positive and significant relationship with earnings management of the firms. (abdullahi et al., 2018; amake & akogo, 2021; dandago & gololo, 2020) banking company size, company age and board diversity have positive and significant effect on csr compliance; ownership structure and board composition have a negative but statistically insignificant effect. (igbekoyi & ogodor, 2020) telecommunication significant influence of csr on effective tax rate. (adeyeye et al., 2020) insurance financial capacity, public opinion, government regulation and socially responsive management did not significantly influence the adoption of csr (ehiorobo & kuye, 2018) 7. effect of csr on stakeholders’ perception consumers nigerian consumers have adequate knowledge and positive perception of csr, which influence their purchasing decisions and behaviour. (potluri et al., 2020) telecommunications significant effects of csr on stakeholders’ perception (tapang & bassey, 2017) banking, oil and gas, manufacturing and service industries significant positive relationship between employees’ perceptions of their organisations’ csr engagement and their exhibition of organisational citizenship behavior. (onyishi et al., 2020) industrial significant positive relationship between csr, environmental preservation and the control of youth restiveness in the (sokefun & oduyoye, 2018) l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 15 communities studied. mncs communication of csr activities and intentions, stakeholders' involvement in csr decision making, as well as job creation and provision of social amenities have significant effect on stakeholder's perception of the mncs (okoi et al., 2021) oil and gas csr expenditures such as cost of repairs of vandalized pipelines and oil spill clean-up, significantly predict the perception of revenue losses among company managers. (igwebuike, 2021) l. c. ezechukwu, & a. u. uzuagu/journal of accounting and business education, 7 (1), september 2022 16 references abada, u. d., ejiofor, e. o., & anumege, s. c. 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