| dc.description.abstract | This study sought to determine the factors that influence
auditor changes by unquoted companies operating in Nairobi. The
study covered the period 1981-1990 and to achieve the objective of
the study , a sample of 100 firms out of 25463 companies was
selected. The Primary data was collected using a questionnaire
Fifteen factors were obtained from pertinent literature
They included audit fees, quality of audit service, industry
expertise , management change, reporting disputes, qualified
opinion, auditor reputation, lacked confidentiality, influence of
head office , need for non-audit services , size, organization
complexity, demand by shareholders and tax services.
The preliminary analysis showed that 32 out the 65 firms
changed auditors during the period of study. More auditor changes
occurred between 1986 and 1990 inclusive than the period between
1981 and 1985 inclusive. Quality of audit service had the highest
sample mean whereas the dependent variable (AC) and tax services
had wide variations when compared with the other variables. It was
also shown that auditor change was common with small firms. The
conditional logit model and correlation analysis were used for
data analyses and and the results indicated that:
(1) Quality of audit service was very significant
in explaining auditor switching.
(2) organization complexity , size and financial
distress were also significant in explaining
auditor changes. (3) Multicollinearity was not a serious problem.
Most of the identified factors , however , did not show any
significant influence of auditor switching.
The findings of this research should be understood and
evaluated in light of the limitations of the study In view of
the results , it is recommended that audit firms be more
sensitive to that clientele that seek specialised type of audit
service tailored to suit them | en |
