Assessment of

Factors affecting
External Audit
Quality
By: Liya Hailu
Advisor: Mr. Tesfaye JUNE,2023
 Outline
 Background of the study
 Statement of the problem
 Significance of the study
 Objective of the Study
 Research Question
 Scope and Limitation
 Research Methodology
 Data Analysis and Interpretation
 Conclusion and Recommendation
 Background of the Study

 “In developing countries like Ethiopia,

the efficient practices of the auditors in
their responsibilities have not yet
developed very well” Muluneh (2007).
 World Bank (2007) reported that most of
the external auditors in Ethiopia
complain audit quality in the country
was very low.
Statement of the Problem

 Lack of previous research on

perceptions on audit quality
determinants in Ethiopia.
 Numerous determinants of audit quality
in private Certified Audit Firms.
Significance of the Study

 Gives information about the effect of the

variables on audit quality.
 Gives stress to the dominant variables
that affect audit quality
 Adds knowledge on the field of audit
quality in Ethiopia etc…
 Objective of the Study

To find out the influence of

1. Client’s cooperation
2. Audit documentation
3. Time Constraint
4. Industry specialization
 Research Questions

 I attempt to address the following

questions
1. Does client’s cooperation influence External
Audit Quality?
2. Does audit documentation influence External
Audit Quality?
3. Does time constraint influence External Audit
Quality?
4. Does industry specialization influence
External Audit Quality?
Scope and Limitation of the
Study
 The study focused on the four variables
 clients cooperation
 audit documentation
 time constraints and
 industry specialization
 This study is focused on selected
Certified Audit Firm in Addis Ababa.
Research Methodology
Research Approach Quantitative Approach

Research Design Descriptive and Corelation Approach

Data Type Primary Data

Target Population and Sample Size Non- Probablistic Sampling

Data Collection Close-Ended Questionnaires

Data Analysis Descriptive Analysis

Conclusion and Summary

 Auditors value the importance of client

cooperation, proper documentation of
audit work, industry specialization, and
are aware of the impact of time
constraints.
 These factors play an essential role in
promoting the quality of audit work.
 Recommendations
 Audit Documentation and
 Client Cooperation and
Audit Quality
Audit Quality:
a. Develop standardized
a. Develop methods to foster methods of audit
effective communication documentation,
between auditors and
b. Ensure that audit
clients,
documentation is
b. Encourage clients to be regularly reviewed by
transparent, senior auditors and
managers,
c. Strengthen audit
regulations to enforce the c. Emphasize the
duty of clients. importance of properly
documented audit.
 Recommendations

 Time Constraint and Audit  Industry Specialization and

Quality Audit Quality
a. Provide sufficient time and a. Encourage auditors
resources for auditing,
especially in the case of to specialize in
complex or high-risk audits. specific industries,
b. Set realistic deadlines that b. Develop training
account for the need for
adequate planning, risk programs ,
assessment, and review
processes.
c. Design audit
procedures that are
c. Encourage auditors to
prioritize thorough specific to each.
examination of financial
statements over meeting
deadlines.