| dc.description.abstract | The study was carried out with a view to establish the determinants of choice of external auditors by commercial banks in Kenya. Due to several scandals of different magnitude, the interest of researchers, companies as well as of the general public in corporate governance has grown during the f>ast few years. Many researchers have attempted to investigate the many possibilities a company has to be responsible in its day to day operations.
Secondary data was collected from Central Bank of Kenya and Commercial banks financial statements. The tool used to analyze the data was regression analysis where an appropriate model was formed to analyze the relationship between auditor choice and other factors such as audit fees, size of banks in terms of asset base and whether the bank is listed or not.
The study reaches a conclusion that choice of external auditors is unaffected by external audit fees charged. Thus external audit fees have not had a significant influence on the choice of external auditors for commercial banks in Kenya. In addition, Asset base of a bank had no significant influence on the choice external auditors The study also concludes that listing status of a bank was also not a significant determinant of choice of external auditors.
A strong positive correlation was however noted between the choice of a Big 4 audit firm and level of audit fees indicating that Big 4 audit firms charge high fees. The study recommends that banks should evaluate the quality of the auditor before selection and unless high quality can be attributed to hiring a Big 4 audit firm, it is cost efficient to hire a small audit firm. | en_US |
