Factors Affecting The Effectiveness Of External Audit Function Among Deposit Taking Savings And Credit Cooperative Societies In Nairobi County.

Abstract

The practice of auditing firms has been growing. Many audit firms have come forward to provide audit services. There are concerns that have been raised regarding the conflict of interest between the official role of the auditor and other client services, the emergence of global accounting failures has brought great frustration to investors and other shareholders. Based on these observations, the aim of this research will be determining the factors affecting effectiveness of external auditing in SACCOS in Nairobi County. In order to attain those objectives, the study sought to establish the effect of audit committee, professional/technical skills, the independence of the auditors and effect of audit fees and audit committee on external auditing in SACCOs. The research study used descriptive research design. The population of study constituted of external auditors among selected SACCOs in Nairobi County. The study used a census sampling method. Findings revealed that there is a significant influence of audit fees, audit committee, professional skills competence and independence of external auditors on effectiveness of external audit function. Audit committee had a negative and insignificant effect on effectiveness of external audit function in DT-SACCOs in Nairobi County. Audit fees had a positive and significant effect on effectiveness of external audit function in DT-SACCOs in Nairobi County. Professional skills competence had a positive and significant effect on effectiveness of external audit function in DT-SACCOs in Nairobi County. Independence of external auditors has a positive and significant effect on effectiveness of external audit function in DT-SACCOs in Nairobi County. The study recommended that SACCOs need to invest in their external audit function so that they may be at par with their accounting records.