Does Artificial Intelligence Adoption and Auditor Competency Matter for Audit Quality? Evidence from Indonesian Construction and Real Estate Sector

This study examines the effect of Artificial Intelligence (AI) adoption and auditor competency on audit quality in Indonesian construction and real estate companies listed on the Indonesia Stock Exchange (IDX) during the 2023–2025 period. Audit quality is measured using Abnormal Working Capital Accruals (AWCA), while AI adoption is proxied by Big Four auditor affiliation. Auditor competency is measured using proxy namely Signee Audit Experience (SEXP). This study employs a quantitative approach using panel data regression analysis with the Random Effect Model (REM) and clustered standard errors. The sample consists of 220 firm-year observations selected through purposive sampling. The results indicate that AI adoption has a statistically significant effect on audit quality, suggesting that audit firms with stronger technological capabilities and advanced audit technologies play an important role in supporting the audit process. In contrast, auditor competency, whether measured by audit experience or educational background, does not significantly affect audit quality. The robustness test further supports the consistency of the results when an alternative proxy for auditor competency is applied. This suggests that the main findings remain stable across different measurement approaches. The study adds to the existing literature on technology adoption in auditing by providing evidence from the Indonesian construction and real estate industry, which is known for its complex financial reporting processes and relatively high exposure to fraud risk. The results indicate that technological capability plays an important role in improving audit effectiveness and supporting audit quality in an increasingly digital business environment.