FACTORS AFFECTING AUDITORS INDEPENDENCE IN THE CONTEXT OF PRIVATE AUDIT FIRMS IN ADDISABABA

Abstract

This study examines factors affecting auditor’s independence in the context of private audit firms in Addis Ababa. This study also aims in examining the effect of self-interest threats, self-review threats, advocacy threats, familiarity threats, intimidation threats and audit reputation on auditor independence. The data conducted had a close ended five point likert scale questionnaire. In order to achieve the desired outcome the study used explanatory research design. The study conducted used a non-probability convenience sampling technique for auditor. Data were collected using questionnaire; which was administered to 200 auditors in selected Audit firms in Addis Ababa. The data analysis was done using statistical package for Social Science version 20. Descriptive statistics including frequency tables and mean is used to present the results of the study by running a correlation test and regression analysis. The finding revealed that there are positive and significant relationships between self-interest threats, self-review threats, advocacy threats, familiarity threats, intimidation threats and audit reputation on auditor independence.