Get the complete project »
- The Complete Research Material is averagely 65 pages long and it is in Ms Word Format, it has 1-5 Chapters.
- Major Attributes are Abstract, All Chapters, Figures, Appendix, References.
- Study Level: BTech, BSc, BEng, BA, HND, ND or NCE.
- Full Access Fee: ₦4,000
Chapter One: - Introduction
1.1 Back ground of the Study
External auditors play a critical role in validating company financial information. Potential lenders and investors often require externally audited financial statements before doing business with a company. The objectives of the auditor and the audit function are to assist users in determining the quality of information being received. The audit function ought to add to the credibility of information because the user of the information needs to have confidence in it when making decisions. An external auditor performs an audit, in accordance with specific laws or rules, of the financial statements of a company, government entity, other legal entity, or organization, and is independent of the entity being audited. Users of these entities' financial information, such as investors, government agencies, and the public, rely on the external auditor to present an unbiased, independent and quality audit report (IFAC2004). Audit service is very important to increase financial statement users’ trust in the financial report. This service will give benefit to the financial statement, in which users apply this information for decision-making.
Audit market environment in Ethiopia was characterized by rigid competition triggered by the bidding system to obtain audit clients among auditors, absence of international big auditors in the country and there is no strong professional body in charge of regulating the accounting and auditing profession and consistent rules applicable in discharging professional responsibilities (World Bank 2007).This unique feature of the audit market entails many concerns on the external audit practice in the country. World Bank (2007) also reported that most of the external auditors in Ethiopia complain audit quality in the country was very low. Hence, the purpose of this thesis is to examine factors determine the audit quality service provided by external auditors in Amhara Region. Having this unique feature of audit market environment, over the years, various researchers like Mihret (2010), Muluneh (2007), Adane (2014), Bethlehem (2009), Bethitina (2015), and Tamirat (2014) in their different capacities have taken a closer look at auditing practice in Ethiopian with respect to internal and external auditors. However, most of prior studies of external audit quality concentrates on audit firm specific factors (Bethitina, 2015; Adane (2014),) and less considered have given for
corporate governance attributes in manufacturing share companies. Therefore, the aim of this study was to fill this gap by identifying the determinants of external audit quality in Amhara region.
1.2 Statement of the Problem
In Ethiopia, there are no reported scandals that involve auditors but with the increasing number of private audit firms and the increasing number of business companies many studies should be conducted on audit quality to challenge the factors that affect the quality of the audit. It is not questionable the audit practice should be performed at highest quality. Auditee whether they are government, not-for- profit or for profit organizations all need a high standard quality audit. All of them have different stakeholder’s government, management, taxpayers, donors, investors and a high-quality audit is essential for systematic and objective assessment of the Auditee financial statement. This will enable the users of the financial statements to rely on the accounts of the Auditee. The audit profession in Ethiopia has the specific features. First, the number of professional accountants is very low compared to the size of the economy. Second, there is no strong professional body. Third, the Ethiopian Professional Association of Accountants and Auditors (EPAAA) have no legal backing and not member of the International Federation of Accountants (IFAC). Fourth, the country has no quality assurance programs for Auditors. Fifth there is no legal requirement exists for auditors to have professional indemnity insurance. Sixth, the big-four international audit firm networks are not present in the country. Seventh there are no accountings and auditing standards set in Ethiopia and lastly every auditor determines accounting standards for their clients (World Bank, 2007). The above features that have a negative effect on auditor’s competence, auditor’s liability, and inconsistence auditors approach specially in the standards they are following create concerns on audit quality in Ethiopia. There are many researches done on audit quality in other countries like Nigeria, Vietnam, Malaysia, and Jordan. However, there are only limited studies done on audit quality in Ethiopia. The few studies are also industry specific; on commercial banks (Kitata, 2016), on Manufacturing companies (Leilina, 2015) and, on audit tenure (Gelaneh, 2011).
As mentioned above a few studies are either industry specific i.e. external audit on commercial banks and manufacturing companies or by using single independent variable i.e. audit tenure or audit fee or size of the firm etc. This study tries to feel the gap by not focusing on the external audit
of one company or by not focusing the impact of only one variable but rather tries to see the perception of audit quality determinants from members of auditors in Amhara region on their audit work.
1.3 Objective of the Study
The study has both general and specific objectives.
1.3.1 General Objectives
The main objective of this research was to investigate factors affecting private audit quality in the Amhara Region.
1.3.2 Specific Objectives
Specifically, the study has the following objectives: -
I. To examine the effect of the audit fee on the audit quality.
II. To examine the effect of auditor’s reputation on the quality of audit.
III. To investigate the effect of the audit firm tenure on the of audit quality.
IV. To investigate the effect of the size of the audit firm on the audit quality.
1.4 Hypotheses Development
According to Frankel (1979), a hypothesis is the tentative statement of fact that is yet to be verified by the researcher. In this study to concentrate on Private Audit quality determinants in Amhara Region one dependent variable against four independent variables would be investigated in line with the broad purpose statement of private auditors on Audit Quality in the context of Amhara Region. The dependent variable (are those variables that are explained by other variables), is Audit quality, while the independent variables (are variables that explain other variables) are audit fee, the auditor reputation, audit firm tenure, and size of the audit firm.
To achieve the objective of this study, in addition to the research questions presented above the following hypotheses concerning the auditor’s expert performance to audit quality task are tested.
H1: There is a significant positive relationship between the Size of audit firm and the audit quality.
H2: There is a significant positive relationship between Audit tenure and the audit quality.
H3: There is a significant positive relationship between audit fee and the audit quality.
H4: There is a significant positive relationship between the auditor reputation and the audit quality.
1.5 Significance of the Study
The importance of this study is generally for the audit industry in the country. The following significance can be achieved after completion of this research.
• It helps users of external audit to know about factors that have a positive and negative effect on audit quality.
• This study will have a vital role in providing empirical support for their top-level decision, besides to encouraging the motivations of national potential partners that finally enabled the auditors to earn more revenue and market share.
You either get what you want or your money back. T&C Apply
You can find more project topics easily, just search
SIMILAR ACCOUNTING FINAL YEAR PROJECT RESEARCH TOPICS
» CHAPTER ONE INTRODUCTION 1.0 BACKGROUND TO THE STUDY The changing complexity of business activities and the ever changing conditions of business envir...Continue Reading »
» Abstract In this research work on the role of auditors in mitigating fraud and corruption in Nigeria with particular reference to Nigerian Breweries P...Continue Reading »
» ABSTRACT Electronic banking has become one of the most important and modern applications that has witnessed a substantial expansion during the ten yea...Continue Reading »
4. COST ACCOUNTING AND CONTROL IN THE AGRICULTURAL SECTOR PROBLEMS AND SOLUTIONS. (A CASE STUDY OF LIVESTOCK FEEDS NIGERIA PLC)» ABSTRACT This research work was necessitated by the need to highlight, the cost accounting and control problems inherent in the agricultural sector an...Continue Reading »
5. THE IMPORTANCE OF ACCOUNTING RECORDS IN PROFIT MAKING ORGANIZATION (A CASE STUDY OF ESCO SUPERMARKET, WARRI, DELTA STATE)» CHAPTER ONE INTRODUCTION 1.1 Background of the Study In turbulent time, an organisation has to be managed properly in order to withstand the changes i...Continue Reading »
6. CAUSES AND EFFECTS OF COMMUNICATION BREAKDOWN IN AN ORGANIZATION (A case study of champions breweries Uyo Akwa Ibom State)» ABSTRACT The study intends to determine the importance of communication in enhancing an effective management undertaking which is for the generality o...Continue Reading »
» CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Auditing involves the independent examination of an expression person in accordance with the term...Continue Reading »
8. THE IMPACT OF INTERNATIONAL FINANCIAL REPORTING STANDARD (IFRS) ON THE QUALITY OF FINANCIAL STATEMENTS (A CASE STUDY OF FIRST BANK PLC)» CHAPTER ONE INTRODUCTION 1.1 BACKGROUND OF THE STUDY This study sets out to examine whether the impact of International Financial Reporting Standards ...Continue Reading »
» ABSTRACT This study examines the essence of effective inventories control and management to manufacturing companies with particular emphasis on Ama Gr...Continue Reading »
10. EFFECTIVENESS OF INTERNAL AUDITING AND ITS CONTRIBUTIONS TO MANAGEMENT DECISION PROCESS IN AN ORGANIZATION» (A STUDY OF GEETA PLASTIC PRODUCTS NIGERIA LIMITED, LAGOS) ABSTRACT The aim of this study was to investigate the internal auditing and its contributio...Continue Reading »