The Determinants of External Audit Quality: A Case Study of Ethiopian Audit Firms
No Thumbnail Available
Date
2017-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Addis Ababa University
Abstract
The aim of this study is to assess the determinant factors affecting external audit quality in
Ethiopian audit firms. Namely independence, audit experience, accountability, audit fee, firm size
and regulation. In light of 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 ninety eight external audit firms licensed
and registered in Accounting and Auditing Board of Ethiopia (AABE), fifty two audit firms are
selected based on convenience sampling and one hundred four questionnaires are distributed. Two
questionnaires are distributed for each firms. The questionnaires are answered by
principal/partners and or employed auditors in senior audit position. The results of multiple
regression reveal that independence, experience, accountability and regulation are statistically
significant factors influencing the variation in audit quality in the Ethiopian external audit firms.
The audit fee is significant on 10% significant level whereas, audit firm size is not significant factor
that has little or no impact on the audit quality of the Ethiopian external audit firms as it is not
significant even at 10% significance level. 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 independence, experience, accountability and regulation
identified by this study.
Description
A Thesis Submitted to the
Department of Accounting and Finance
College of Business and Economics
Presented In Partial Fulfillment of the Requirements for the
Degree of Masters of Science in Accounting and Finance
Keywords
Accountability, Audit fee, External audit quality