Factors Influencing the Auditor Independence and Affects to Audit Quality of Supreme Audit Institution of Vietnam

Abstract

Purpose: The aim of this study is to explore the factors affect to auditor independence, and impacts auditor independence to audit quality of Supreme Audit Institution (SAI). Theoretical framework: This study explores factors affecting the auditor independence in public sector based on articles pertaining to public sector audits that were published in major publications in the 20th century. The theories were applied in order to build up research model about factors influencing the auditor independence and affects to SAI’s audit quality. Design/methodology/approach: Research using complex techniques to analyze complex relationships in the SEM model. This result tests research model in Vietnam from the perspective of the state auditors’ perception with 225 valid responses. Findings: The result found out three primary factors that affect the independence of public-sector auditors: political hegemony, auditor tenure and relationships with auditees. These factors have negative impact on state auditor’s independence, meanwhile auditor independence has a positive impact on SAI’s audit quality. Research, Practical & Social implications: The study contributes to existing literature by providing empirical evidence for there is no suitable audit quality measurement framework for SAIs. Originality/value: The results highlight strong importance of the auditor independence so that SAI Vietnam can have effective solutions to protect independence of state auditor from threats and improve the audit quality of SAI.