DETERMINANTS OF AUDIT QUALITY IN PAKISTAN

The importance of audit quality is inevitable to bring accountability and transparency in public sector entities of Pakistan. The public sector entities are liable for the appropriate utilization of public funds and despite of government audits, massive corruption exists about effective utilization of funds. So, there is a dire need to explore why audits are ineffective and which factors are playing instrumental role in this regard. So, this research intends to explore the factors in the work environment which affect the audit quality. Data collection and analysis was conducted in two stages. Primary data were collected by the researcher from a random sample of 250 auditors from various government departments at federal level through structured interviews and survey method simultaneously. Qualitative analysis in Nvivo 10 revealed several important variables which were quantitatively tested in second stage. The final results show that physical work environment, performance of auditors and top management support are positively and significantly affecting the audit quality. It is suggested that the physical environment for auditors should be redesigned according to their needs and top management should support government auditors for issuance of transparent reports. Further, performance appraisals and 360 degree feedback should be used to improve the performance of auditors.