Developing Country External Audit Effectiveness: Ordinary least squares regressions analysis

Abstract Countries which are administered in a democratic policy need to be accountable in their use of public money and to provide efficient, effective, and economical service delivery. In order to accomplish those government objectives, pertaining external audit function will be the main instrument for controlling and using of all scarce resources available in the public sectors organization. The main objective of this study was to investigate the determinants of external audit effectiveness in Ethiopia. 476 respondents' self-administered questionnaires and a quantitative methodology were taken into account. The ordinary least squares regressions analysis revealed that the five predictors (independenceof external audit, competency of auditors, audit quality, management supportand information technology used) have positive influence on external audit effectiveness under the study. It is recommended that functions and activities of external auditors shall be free from the interference of the management including and reporting all the critical findings; the external audit staffs need to collectively possess to develop their knowledge and skills through appropriate professional training and development program; leaders provide necessary material support; and the work of external audit should be performed with modern technology such as the using of computerized data tools and specific audit software.