Exploring the practice of auditor independence: The case of Indonesian public sector audit institution

The purpose of this research is to understand the nature of auditor independence by exploring it in the level of practice using the case of Indonesian public sector audit institution. In the auditing field, independence is regarded as one of the key principles since the auditors are required to have an unbiased and unimpaired judgement in providing their opinions. Moreover, in the public sector, there is a greater requirement for auditors to be independent given the social significance of protecting the public interest. Independence is also recognised as a difficult and contested concept, therefore, this research sought to contribute to understanding auditor independence through exploring the way it is practised by the auditors. This research uses a case study research method. Using this method, this research provides an in-depth analysis of auditor independence using the case of the Audit Board of the Republic of Indonesia (the BPK) as a public sector or government audit institution. In this research, data used for analysis were gathered using semi-structured interviews among 24 respondents. The respondents were divided into four groups: auditors, audit managers, top officials, and board members. Interviews were then transcribed and analysed to identify the emerging patterns in the responses of participants about auditor independence and at the level of their practice. The results of this research confirm that independence is one of fundamental values in auditing practice. Moreover, this research also found that the multifaceted nature of the perception and practice of auditor independence must be acknowledged in understanding auditor independence. In this research, there are three aspects of independence that appear prominently during the interviews, namely personal, professional, and institutional aspects. Ultimately this research discovered that there are different approaches, views, and practices in maintaining independence by the auditors. This research found that auditors in different positions, with different duties and responsibilities, and different experiences report differently on what are the important aspects of independenc