FACTORS AFFECTING EXTERNAL AUDITORS INDEPENDENT (CASE STUDY FROM TIGRAY REGIONAL AUDITORS‟ OFFICE)

Abstract

External auditor independence is a fundamental principle ensuring objectivity, impartiality, and credibility in financial reporting. The intention/aim of this study is to examine/investigate the factors affecting external auditor‟s independent in Tigray Region General Auditor Office. The researcher employed quantitative research approach with explanatory research design where the effect caused by the independent variable on the dependent variable is observed through regression analysis using SPSS Version 27 Software. Primary data was collected through structured questionnaire from OTAG officials, OTAG Auditors, Authorized Auditors and auditee. The data analysis was done using SPSS Version 27 Software. Descriptive statistics including frequency tables and mean is used to present the results of the study SPSS-27 version by running a correlation test and regression analysis. Accordingly, the result of regression analysis indicating that all variable factors including financial incentives, regulatory pressure, organizational culture, workload and time constraints, professional competence, ethical climate, and quality control mechanisms have positive and significantly 5% p-value less than 0.05 level affected External auditor independence, but personal relationships mechanisms have negative and significantly 5% p-value less than 0.05 level affected External auditor independence. Finally, the researcher recommended to strengthen external auditor independence, organizations must implement robust financial incentives measures, including audit fee, incentive salaries and peridium, strength regulatory pressure, and continuous professional development, Ensuring auditors possess high professional competence and operate within a low workload and time constraints, transparent ethical framework, and introduce quality control mechanisms accountability throughout the audit process. By addressing these key variables, the organization can reinforce the reliability of financial statements and uphold public trust in audit processes.