Critical Factors Of Modified External Auditors Report In The Case Of Ethiopian Public Higher Education Institutions

The types of audit reports issued by external auditors are categorized in to two major categories.rnThe one is un-modified (unqualified auditors’ report) and the other type is modified audit report.rnIdentification of the critical factors of modified external auditors report is an important point forrnmanagers to concentrate resources for effective and efficient corrective actions. The EthiopianrnOffice of Auditor General is conducting annual audit of the financial statements of public higherrneducation institutions and give modified audit reports from year to year. It has also repeatedlyrnreported to the parliament that the financial record keeping and reporting of public higherrneducation institutions is not showing improvement from time to time. This study determines therncritical factors of modified auditors report in public higher education institution of Ethiopia.rnNine factors are taken from previous researchers’ study as causes of poor control system inrngovernment entities and one additional factor mentioned by media experts and one more factorrnfrom parliament report that have direct impact on the financial control system of public higherrneducation institutions are selected for this studies. The study is conducted in the Office ofrnAuditor General who is the external auditor of public higher education institutions and in thernreporting entity, public higher education institutions of Ethiopia, who are audit clients for thernauditor general. Data is collected from the senior audit staffs and the senior finance sectionrnemployees of the reporting entity (public higher education institutions). Five Level Likert Scalernresearch question is used to rate the eleven factors by the auditors and by the finance employeesrnof public higher education institutions. Based on their mean and standard deviation the factorsrnare rated from most critical to none critical factor. The result of data analysis shows that five ofrnthe factors are identified as most critical, as these factors are rated by both auditors andrnauditees as most critical. Four of the factors are rated as most critical by either of the twornparties (auditors or auditee) therefore these four factors recommended for further study. And twornof the factors are found none critical factor of modified external auditors report in public higherrneducation institutions.

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