| dc.description.abstract | The objective of this study was to establish the relationship between audit quality and
audit rotation in the banking industry in Kenya. Theoretically, it is assumed that audit
rotation leads to high quality audit since the new auditor is not acquainted with
management. Multiple linear regression with audit quality as the dependent variable and
audit rotation, consultancy services offered and audit as the independent variables was
used. These variables were used to establish whether there is any relationship between
audit quality and audit rotation in the banking industry in Kenya. Primary data was
collected through questionnaires and interviews in regards to 2013 financial year ends
and analyzed using statistical tools. The population used was the 43 commercial banks in
Kenya. The means and standard deviations were calculated for the descriptive data and
multiple regression analysis was used to answer the research questions. The study results
indicated that provision of consultancy services had the highest effect on audit quality
followed by audit fees. Audit rotation had the least effect of the three variables with a
small beta coefficient. One of the limitations that the study encountered was a low
response rate due to confidentiality of audit services provided to banks. Also, the overall
rating of audit quality was not fully objective since they were rated by managers who
give their opinion. The study recommends for an audit quality rating agency which can
sample a number of companies and rate the audit work done on those companies based
on certain factors. This would help improve the audit quality done by auditors to their
clients. Also, the study recommends that banks need to have shorter audit tenure as the
new auditors will pump in new ideas. Audit rotation is important for banks and there
should be a minimum of two auditors in a span of ten years to improve quality | en_US |
