Assessing the Challenges facing External Auditors Auditing Public Enterprises in Ethiopia; the case of Auditors of Audit Service Corporation

Abstract

This research explores the major challenges faced by external auditors in auditing public enterprises, specifically focusing on the Auditors of Audit Service Corporation (ASC). Utilizing a descriptive survey research design, the study employs a quantitative methods approach. The quantitative aspect involves the use of structured questionnaires distributed to 95 ASC audit directorate staff whereas 93 questionnaires were returned. Data analysis is conducted using SPSS version 20, presenting results through frequency tables and summary statistics. Key findings reveal significant challenges such as lack of cooperation from management, difficulties in obtaining necessary documentation, complexity of regulations, issues with internal controls, and political influences affecting audit objectivity. Additionally, resource constraints, challenges in assessing risk management practices, and resistance from public enterprises are highlighted. The role of external audit committees, training adequacy, and the impact of technology on mitigating audit challenges are also examined. Results show significant challenges, including resistance from management, difficulties in obtaining documentation, complex regulatory environments, issues with internal controls, and political influences on audit objectivity. The study underscores the need for improved methodologies, regulatory framework changes, and enhanced training programs to better equip auditors in addressing these challenges effectively. Overall, the research provides a comprehensive understanding of the obstacles faced by external auditors in auditing public enterprises and offers recommendations for enhancing the audit process.