Various Factor Affecting External and Internal Auditor Performance: Analytical Perspectives of Employees Working in Karachi Audit Firm and Companies

Giving an independent opinion on the financial statement is one the key jobs of an auditor. Issue of auditor’s independence increases everywhere in the world. We have focus on the factors that compromise auditor’s independence. For this purpose, we have chosen four factors to understand how it effect on auditor independence. Factors are audit fee, audit tenure, audit market competition, Non-Auditing services. We have asses’ relationship between auditor independence and the four factors which can compromise auditor’s independence. For this research we have developed questionnaire and distribute among internal & external auditors and also distribute among accounts and finance managers who are working in audit firms and in corporate sector of Karachi. To determine how four factors compromise auditor’s independence, we use “Five Likert scale “. First we have collected the data and then analyzed by using correlation and regression analysis. Finding of our research suggest that audit tenure has significant and positive relationship with auditor independence. Other factors also influence on auditor’s independence but not as audit tenure. From this study we know that audit tenure increases the level of independence. So the regulators and policy makers need to increase the year of audit rotation and reconsider their policy.