Critical Factors of Modified External Auditors Report in the Case of Ethiopian Public Higher Education Institutions
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Date
2019-12
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Publisher
A.A.U
Abstract
The types of audit reports issued by external auditors are categorized in to two major categories.
The one is un-modified (unqualified auditors’ report) and the other type is modified audit report.
Identification of the critical factors of modified external auditors report is an important point for
managers to concentrate resources for effective and efficient corrective actions. The Ethiopian
Office of Auditor General is conducting annual audit of the financial statements of public higher
education institutions and give modified audit reports from year to year. It has also repeatedly
reported to the parliament that the financial record keeping and reporting of public higher
education institutions is not showing improvement from time to time. This study determines the
critical factors of modified auditors report in public higher education institution of Ethiopia.
Nine factors are taken from previous researchers’ study as causes of poor control system in
government entities and one additional factor mentioned by media experts and one more factor
from parliament report that have direct impact on the financial control system of public higher
education institutions are selected for this studies. The study is conducted in the Office of
Auditor General who is the external auditor of public higher education institutions and in the
reporting entity, public higher education institutions of Ethiopia, who are audit clients for the
auditor general. Data is collected from the senior audit staffs and the senior finance section
employees of the reporting entity (public higher education institutions). Five Level Likert Scale
research question is used to rate the eleven factors by the auditors and by the finance employees
of public higher education institutions. Based on their mean and standard deviation the factors
are rated from most critical to none critical factor. The result of data analysis shows that five of
the factors are identified as most critical, as these factors are rated by both auditors and
auditees as most critical. Four of the factors are rated as most critical by either of the two
parties (auditors or auditee) therefore these four factors recommended for further study. And two
of the factors are found none critical factor of modified external auditors report in public higher
education institutions.
Description
A thesis submitted to Addis Ababa University College of Business and Economics in
partial fulfillment of the requirement for the degree of masters of Science in
Accounting and Finance
Keywords
Critical factors of modified auditors, External audit, Modified auditors’ report, Report in public higher education institutions