Page 51 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.79, # 2, 2022, pp. 51-63

DETERMINANTS OF PUBLIC SECTOR AUDIT QUALITY:

THE CASE OF THE OFFICE OF THE FEDERAL AUDITOR
GENERAL, ETHIOPIA (OFAG)

SAMUEL ATSIBHA GEBREYESUS

Ethiopian Civil Service University Addis Ababa,Ethiopia
E-mail: [email protected]; [email protected]
ORCID https://orcid.org/0000-0001-6508-9753
Received: September 14; accepted November 27, 2022; published online December
23, 2022

ABSTRACT:
This paper examined the determining factors affecting public sector audit quality. Primary
and secondary data were used for the study. The primary data for the study were collected
from the Office of federal auditor general, Ethiopia using structured questionnaires.
Secondary data were gathered from various electronic source literatures. Audit quality
depends on the competence of the auditors, the independence of the organization and the
auditors, the legal frameworks, and government support. The instrument of analysis was
the regression model between the variables Durbin-Watson and VIF Test for
autocorrelation and multicollinearity. The findings showed that the dependent variable,
audit quality, has a positive and significant relationship with the predictors’ auditors’
competence, organizational and auditors’ independence, and the audit legal frameworks.
However, government support has a positive and insignificant relationship with the
dependent variable. The beta coefficient is highly positive for auditor competence and
organizational and auditor independence and the audit legal frameworks imply that these
factors affect audit quality in the public sector. Consistent with the above findings, the
researcher recommended that the government should strengthen the audit institution to
ensure accountability and transparency in public sectors.

Key words: audit, competence, independence, determinants, regression

Jel classification: M42

INTRODUCTION
An audit is an objective investigation of a subject in which the auditor provides
objective findings about the use of funds by the underlying institution. The main goal
of auditing is to increase transparency and accountability in the public and private
sectors. Auditing is a technique to hold public and commercial organizations
accountable for their obligations. Accountability, transparency, equality, and integrity
are improved by auditing an organization's activities (Afzal, 2016).

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