African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4142

Article in Press

Compliance of External Auditors with Professional Code of conduct: In the Case of Ethiopia

Kesto Dakito Alemu and Abreham Bayeh

  •  Received: 30 August 2021
  •  Accepted: 24 November 2021
The objective of the study was to assess the compliance of external auditors with the code of conduct while discharging their responsibilities, and its effect on the existence of CSR within client organizations in the case of Ethiopia. The study adopted a mixed research approach and used cluster sampling to categorize the respondents based on their role within the organization, and probability sampling to select the respondents. The finding of show that client’s demand for unqualified opinion, pressure from clients to get auditor’s report as soon as possible, strong personal or financial relationship and manager’s refusal to provide necessary information are some of the constraints that affect external auditor’s compliance with the code of ethics while they perform their activities. Similarly, manager’s doubt that auditor’s report might affect their future, manager’s fear of losing their job and managements intention to hide their mistakes are the reasons for managements not to provide the necessary information for external auditors. External auditors and managements of client organizations should comply with the principles of CSR at a maximum level when they perform their business activities, external auditors should understand that their compliance with the code of conduct is basic to protect the public from corrupted organizations, there should be a strong professional association or authority that controls external auditor’s competence and the compliance of their work with the code of conduct, and managements should present all the necessary information.

Keywords: Corporate social responsibility, external auditor, management, professional code, business ethics