Analysis of factors in implementing risk-based performance audits that affect firm value

As an external audit institution for the management and accountability of state finances, BPK is responsible for conducting financial, performance, and audit with a specific objective, including in BUMNs. However, BUMNs' financial reports are audited by a public accounting firm (KAP) following laws and regulations. Although the opinion of the BUMNs' financial statements and BUMNs' contributions to the State exhibit a positive trend, the opposite trend happens with the ratio of their overall financial performance, particularly the return on assets (ROA) trend of BUMN. This study was analyzed using the Structural Equation Modeling-Partial Least Square (SEM-PLS) approach to test a series of relationships. The analysis results indicate that the auditor must consider risk management in designing the performance audit scope, as the internal auditor's risk assessment and the performance audit scope impact the firm value. Nevertheless, the study's results indicate that the presence of risk management and the need for auditors to consider the internal auditor's risk assessment when determining the performance audit scope have no significant impact on the firm value.