An examination of the audit quality difference among big 4 audit firms in Kenya (an audit committee's perspective)
The purpose of this study is to examine whether audit quality differences exist among the Big 4 audit firms in Kenya. The study also evaluates the extent to which audit committees (ACs)review the quality of work of the external auditor as required by the Corporate Governance Guidelines(CGGs)provided by the Capital Markets Authority(CMA). One way Analysis of Variance(ANOVA)technique is used to evaluate audit quality differences among Big 4 audit firms based on the questionnaire responses obtained from AC members of companies quoted on the Nairobi Securities Exchange(NSE). Percentage analysis is used to assess the extent to which ACs perform certain quality review checks on the work of external auditors as per the Centre for Audit Quality(CAQ)tool. This study contributes to the body of audit quality literature by examining audit quality using a new tool developed for ACs by the Centre for Audit Quality(CAQ). This methodology is in contrast to other audit quality proxies such as frequency of litigation occurrences, audit fees. Audit tenure. size of discretionary accrual. Extent of IPO under pricing and frequency of financial statement restatements that have been used in prior audit quality research. The study finds that there are no statistically significant audit quality differences among the Big 4 audit firms in Kenya. The study confirms the proposition used in prior researches on audit quality that Big 4 audit firms provide homogeneous audit quality. The study also Ends that ACs, to a large extent, review the quality of work of external auditors as per the CAQ tool.
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Otieno, Victor Odindo (Strathmore University, 2013)This study aims to establish the determinants of internal audit in the audit of strategic risk in state corporations in Kenya. It further examines the relationship between audit of strategic risk and the determinants of ...