Page 60 - Azerbaijan State University of Economics

Samuel Atsibha Gebreyesus: Eterminants Of Public Sector Audit Quality: The Case Of The
Office Of The Federal Auditor General, Ethiopia (OFAG)

a. Dependent Variable: Aud_Qual

All variables have tolerance levels greater than 0.10, and the VIF value is less than 10

(Table 6); the correlation matrix for all variables has paired values less than 0.80 (table

5); and Durbin-Watson 2.092, which falls between 1.50 and 2.50 in Table 6. This
result showed there is no multicollinearity or autocorrelation problem that distorts the
analysis of findings (Field, 2009).

DISCUSSION
Hypothesis Results
The study seeks to investigate the effect of the competence of the auditors, the
independence of the organization and the auditors, the audit legal frameworks of and
Government support following hypothesis was proposed.

H1: There is a significantly positive impact of auditor competence on audit quality.
H2: There is a significantly positive impact of organizational independence on audit
quality.
H3: There is a significantly positive impact of auditor independence on audit quality.
H4: There is a significantly positive impact of audit legal frameworks on audit
quality.
H5: There is a significantly positive impact of government support on audit quality.

The dependent variable (audit quality) was regressed to the predicting variables of
auditors’ competence, organizational independence, auditors’ independence, audit
legal frameworks and government support. Four out of the five independent variables
significantly predict audit quality F (5, 2.809); = 54.872, P< 0.05), which shows that
the four factors under study have a significant impact on audit quality. Furthermore,
2
R =.577 shows that the model accounts for 57.7% of the variation in audit quality.
Furthermore, the coefficients were further assessed to determine the influence of each
of the factors on the criterion variable (audit quality). H1 evaluates whether auditors’
competence significantly and positively affects audit quality. The result reveals that
auditors’ competence has a significant and positive impact on audit quality (β=.433,
t=5.981, P=0.00). Hence, H1 was the support. H2 evaluates whether organizational
independence has a significant impact on audit quality. Organizational independence
has a significant and positive effect on audit quality (β=.088, t = 2.107, P =.036),
according to the findings. As a result, H2 was supported. H3 assesses whether
auditors’ independence significantly and positively affects audit quality.

60