Factors Affecting Perceived Quality of Financial Statements Audit in Ethiopia
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Date
2024-06-27
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Publisher
AAU
Abstract
As a matter of fact, audit quality is of paramount importance to users of audited financial
statements. The literature suggests that achieving audit quality is difficult because it requires the
involvement of various stakeholders and is affected by different factors. The general objective of
the study was therefore to investigate some of the factors affecting audit quality in Ethiopia. In
light of this objective, the study used explanatory research design and a combination of
quantitative and qualitative research approaches. Two sample groups: 108 private audit firm
owners/partners and one official from the regulators and three leaders from professional
associations of accountants and auditors in Ethiopia were selected using judgment sampling
technique. Primary data were collected from these sample respondents through questionnaires.
The collected data were analyzed through descriptive and inferential statistics using Statistical
Package for the Social Sciences (SPSS). The results of the study emphasized that auditors’
competency and audit fee have statistically significant and positive effect on audit quality while
audit firms’ size, audit regulation, audit time and litigation environment have statistically
insignificant effect. Moreover, the results confirmed that the audit regulation in Ethiopia is
ineffective. The results suggested that the auditors, AABE and all other stakeholders should play
their roles in order to upgrade auditors’ competency, ensure the fairness of audit fee set for each
audit engagement and make the audit regulation effective with a view to enhancing audit quality