Assessment of External Audit Practices in Ethiopia: The Case of Addis Ababa Selected Private Audit Firms

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The main objective of this paper was to asses external audit practice in Addis Ababa, and to understand its shortcoming and its better performing aspects. To do this the author distributed close ended questionaries to samples that were selected utilizing simple random sampling from employees of external audit firms that were in operation in Addis Ababa and in order to have a consistent response the questionaries were chosen to be close endedand conducted one on one interviews with people that are currently operating in sector or are utilizing its services in order to have a more personalized outlook to the practice. The author utilized quantitative and descriptive research methodologies to achieve the mentioned objective. Through distributing 232 questionaries and collecting around 195, the rest couldn’t be collected or were deemed to be unfit by the author and conducting an interview with 33 willing individuals the author was able to get a good picture of the current standing of the sector in the capital city. By utilizing SPSS, the author was able to quantify the responses of the auditors that participated in the self-administered close ended questionaries and by combining the obtained results from the questionaries with the responses the author obtained from the interviews and utilizing descriptive analysis tools the author was able to conclude that the sector currently faces a lack of oversight from the government or from any other body but the practice in the sector has largely remained consistent through common practice , assistance form the governmental is nonexistence. Auditors that are currently part of the sector showed a positive inclination towards most positive practice elements of the practice but the lack of enforcement and training schemes has led the sector to be deficient. The solutions for most issues in the practice appear to be strengthening government oversight in the practice and training participants so that they are up to date with world standards.



Audit practice, External audit, Internal audit