RESEARCH DISSERTATION ON ASSESSMENT OF FACTORS INFLUENCING AUDIT QUALITY IN PUBLIC ENTITIES: A CASE STUDY OF NATIONAL AUDIT OFFICE OF TANZANIA IN DAR ES SALAAM

Abstract

ABSTRACT The study was meant to determine factors influencing audit quality for public entities. The study was conducted at NAOT's Dar es Salaam office. The study was guided by three specific objectives, which were to determine the influence of professional auditing standards on the quality of audits in the public sector of Tanzania, to examine the effect of professional proficiency on the quality of audits in the public sector of Tanzania, and to determine the effect of auditor independence on the quality of audits in the public sector of Tanzania. The study was also guided by agency theory. A case study research design and quantitative approach were used to collect data.The study collected data using a sample size of 30 auditors from NAOT, and the study used both primary and secondary data. Primary data was collected using questions, and secondary data was collected using a documentary review. After data collection, the quantitative data were processed using Excel. Descriptive statistical analysis was conducted to analyze quantitative data from the questionnaire showing frequency and percentage of occurrences. The study presents data graphically and in tables. The multiple linear regression model was used in the study to assess the relationship between independent variables and dependent variables.The findings showed that audit independence has an influence on the quality of audits performed by NAOT. The more the auditor is independent, the higher the quality of the audit report created. It is the same way that with less auditors’ independence, the quality of the audit report produced becomes lessened. The study also concludes that the lesser the auditors’ freedom from every kind of feeling and obligation of allegiance, the more likely it is to alter the effect of the published facts on either party. Professional proficiency has an influence on the quality of audits performed by NAOT because, through frequent trainings, seminars, continuous development of skills, and adequate certification, the auditor becomes more proficient, thereby increasing the quality of audits. Moreover, the study concluded that auditors’ ethical behavior has a strong influence on audit quality, with the view that the higher the auditors’ ethical behavior, the higher the quality of the audit report produced.In addition, it is concluded that auditors’ proficiency has a significant influence on audit quality. The higher the auditors’ knowledge and skills, the higher the quality of the audit. The study recommends that the National Audit Office should be well and sufficiently equipped with both human, physical, and financial resources in order to discharge audit functions effectively and enhance the quality of audits.