The government whistleblowers in generating audit quality (a survey on provincial audit boards in South, Central, and West Sulawesi, Indonesia)
Authors: Syamsuddin  
Published: October 2017

Purpose
The aim of this paper is to investigate the mediation effect of whistleblower in relationship between auditor’s ethic, auditor’s commitment and auditor’s independence to audit quality – a survey on provincial audit boards in South, Central and West Sulawesi, Indonesia.

Design/methodology/approach
The population in this research were auditors of audit board, amounting to 249 people, distributed in three provinces, namely, South Sulawesi, Central Sulawesi and West Sulawesi, using purposive sampling. The method used for analyzing the data in this research is structural equation modeling with auxiliary program analysis of moment structural version 20.

Findings
The main finding of this research is that the whistleblower is not the mediation variable of the relationship between auditor’s ethic, auditor’s commitment and auditor’s independence to audit quality. However, it does not mean that auditors will be whistleblowers who will disclose all cases into the public domain. Facts on the field are that Badan Pemeriksa Keuangan Republik (BPK) or The Audit Board of the Republic of Indonesia auditors do not become whistleblowers due to unsupportive atmosphere and less response from superiors. The results support the agency theory. This research supports the agency theory because of the fact in the field that BPK auditors are not committed to be whistleblowers. Meanwhile, there is positive effect of commitment to audit quality. This research supports stewardship theory and setting theory, as BPK auditors are already committed to the organization and demonstrate high levels of participation in the organization and stronger willingness to keep working and contribute to achievement of better audit. The BPK auditors maintain their independence in the inspection, but for them to be whistleblowers to reveal findings to the public is not allowed by their superiors. The research results support the agency theory.

Research limitations/implications
Whistleblower needs special attention in BPK, as it is proven that whistleblowing system has not been implemented, and support is needed from superiors and the agencies concerned if one of the auditors in carrying out their auditing tasks turn out to be a whistleblower due to their conscience. Although whistleblower is not regulated in Inspection Standard Statement, Regulation No. 01 of 2007 on Standards of State Audit (SKPN) of BPK, BPK should accommodate the application of the whistleblowing system, such as that adopted by institutions under the Ministry of Finance (Tax Office); hence, the existence of independent auditor profession regains public trust, something that has been dropped for all this time due to many cases involving independent auditors in business sector or the government sector. The government should provide a strong legal protection to ensure the protection to whistleblowers, as the existing legislation is still general in characteristics, as outlined in Law No. 13 of 2006 on Protection of Witnesses and Victims. Furthermore, the researchers should use qualitative research to study the behavior of the government auditors; why some areas receive Wajar Tanpa Pengecualian (WTP) or unqualified opinion predicate but are coupled by a tremendous increase in corruption; and whether BPK auditors have become whistleblowers in disclosing the actual facts.

Practical implications
Whistleblower need special attention in BPK as it is proven that whistleblowing system has not been implemented, and support is needed from superiors and the agencies concerned if one of the auditors in carrying out their auditing tasks turn out to be a whistleblower due to their conscience. Although whistleblower is not regulated in Inspection Standard Statement, Regulation No. 01 of 2007 on Standards of State Audit (SKPN) of BPK, BPK should accommodate the application of the whistleblowing system, such as that adopted by institutions under the Ministry of Finance (Tax Office), hence the existence of independent auditor profession regain public trust, something that has been dropped for all this time due to many cases involving independent auditors in business sector or the government sector. The government should provide a strong legal protection to ensure the protection to whistleblowers, as the existing legislation is still general in characteristics, as outlined in Law No. 13 of 2006 on Protection of Witnesses and Victims. Furthermore, the researchers should use qualitative research to study the behavior of the government auditors; why some areas receive WTP predicate but are coupled by a tremendous increase in corruption; and whether BPK auditors have become whistleblowers in disclosing the actual facts.

Social implications
The government needs to provide a strong legal framework to ensure the protection of whistleblowers, because the existing legislation is still general as outlined in the Act – Act No. 13 of 2006 on the Protection of Witnesses and Victims.

Originality/value
The originality of this research is using the government whistleblower as the mediation variable in relationship between auditor’s ethics, auditor’s commitment and auditor’s independence on audit quality, with the object being auditor in South Sulawesi, Central Sulawesi and West Sulawesi, Indonesia.