Effects of auditor tenure on audit quality: Case study of listed banks in Nairobi security exchange
Mriwa, Salim J
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Large and small companies are collapsing even after an auditor has issued unqualified opinion. With the collapsing of these firms there is a decline in the trust from the public on the audited reports issued by an auditor. The decline comes from the experience that many companies have collapsed and their financial statements were audited by an independent auditor giving a qualified opinion on audit report. The issuance of unqualified opinion is suspected to be because of a long term relationship between the auditor and the client. Therefore audit tenure is suspected to have an effect on the quality of audit. The objectives of the study were to determined the effects of auditor independence on quality, the effectiveness of human capital on quality when the auditor audit the same client over time and finally to identify the measures to be in place in order to avoid auditor being compromised when auditing the same client. Purposive sampling technique was employed to identify the respondent. Questionnaire was used for collecting data, descriptive statistics was used in the analysis and multiple regression model to find out the relationship between the dependent and independent variables. The research study established the effects of audit tenure on audit quality where the research found out that there is a positive relationship between effectiveness of human capital and audit quality and a negative relationship between auditor independence and human capital.