External Audit Effectiveness: The Case of the Office of Auditor General, Amhara National Regional State, Ethiopia

Abstract

This study examines the external audit effectiveness of the OAG in the Amhara region. Using mixed methods approach, the overall results indicated that the commonly observed audit  findings of the region for more than a decade include cash deficit, outstanding receivable and payables, uncollected revenues, abuse of payments, non-compliance with procurement rules and regulations, payment without supporting evidences, improper construction expenditures, and misuse of property. The major reasons for the prevalence of audit findings are lack of professional competency, high staff turnover, poor documentation or record keeping by auditees, poor communication or information exchange, absence of accountability, ignorance and deliberate fraud, and lack of responsibility and enforcement. The study results also confirmed that the external audit has not been effective to reinforce the public fund accountability in the region mainly due to absence of accountability and failure to act by oversight bodies (legislative, executive and judiciary bodies) and auditee’s management based on audit recommendations. The audited institutions do not take timely corrective measures based on recommendations of audit findings mainly due to lack of attention by oversight bodies, absence of proper action on perpetrators at all level of management, living with fear rather than questioning at all levels as well as poor internal control system of auditees.

Keywords: Audit effectiveness, Audit findings, Cash Deficit, External audit, Office of auditor General of Amhara Region

DOI: 10.7176/RJFA/11-9-08

Publication date:May 31^st 2020