The Impact of Extended Audit Tenure on Auditors Independence and Audit Quality in Addis Ababa
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Date
2011-06
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A.A.U
Abstract
The independence of an auditor has not only been viewed as an ethical issue within the
auditing professional bodies like the International Federation of Accountants (IFAC), but
also it is the bedrock upon which a successful audit is based. The stakeholders require
the auditors to stay true to the main credence of the profession as an independent outside
third party to give an opinion on the true and fair view of the financial statements
presented by management.
The main purpose of this study is to examine whether extended audit tenures can lead to
the emergence of threats to auditor independence which will impair the auditor
independence. Lack of audit quality and subsequent audit failures result mainly from a
lack of auditor 's independence which is considered to be a consequence of the extended
auditor client relationship. In order to investigate the findings; the researcher used a
sample of six audit firms which includes a total of 50 auditors in Addis Ababa. The
researcher also used stratified random sampling technique and collected primary data
through questionnaire. The responses gotten were analyzed using a quantitative and
qualitative approach with the help of spss.
Actually, the results of the findings shows that both extended and short audit tenure has
an impact on auditors independence and audit quality when it is considered under
different threats even if the impact is worst in the case of extended audit tenure.
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Keywords
Audit Quality in Addis Ababa, Extended Audit Tenure on Auditors