Determinates of External Audit Quality: The Case of Private Audit Firms
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Date
2021-05
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A.A.U
Abstract
The aim of this study is to assess the determinant factors affecting external audit quality in
Ethiopian audit firms. Namely External audit quality, External Auditors Professionalism, level
of Education, work Experience, evidence-based approach and independence. Considering this
objective, the study adopted quantitative method of research approaches to test a series research
hypothesis. Specifically, the study used primary data through close ended questionnaires. From
the total population of One hundred thirty-two external audit firms licensed and registered in
Addis Ababa Accounting in Auditing Board of Ethiopia (AABE), Forty audit firms are selected
based on convenience sampling and one hundred sixty fore questionnaires are distributed.
Seven questionnaires are distributed for each firm. The questionnaires are answered by
principal/partners, Director/ Audit Managers,senior and Junior audit position. The results of
multiple regression reveal that Auditors’ professionalism, auditors’ level of education, and
auditors’ independence have positive and significant effects on external audit quality and
auditors’ work experience and Auditors’ evidence-based approach have a positive and negative
with insignificant effect on external audit quality. Therefore, this is a clear signal to audit firms,
professional associations and the Accounting and Auditing Board of Ethiopia (AABE) not to
ignore the key determinant factors of Auditors’ professionalism, auditors’ level of education,
and auditors’ independence.
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Keywords
External audit quality, External Audit Professionalism, External Auditor level of Education, External Auditors work Experience