The effect of professional ethics on the quality of auditing in manufacturing companies.

Abstract

The study examined the effect of professional ethics on the audit quality in manufacturing companies, a case study of Crown Beverages Limited. The study was guided by a number of objectives that is to say: to examine the influence of professional integrity on accuracy of audit reporting; to assess the effect the transparency and accountability on the reliability of auditing works in manufacturing companies and; to examine the relationship between professional ethics on the audit quality in manufacturing companies. The study took a cross sectional research design whereby both qualitative and quantitative approaches were employed to examine the relationship between professional ethics and audit quality. The study considered a population, which composed of auditors and accountants at Crown Beverages Limited. A sample size of 67 respondents was considered in this study to which respective questionnaires were administered. Ethics in professional auditing are of utmost importance as auditors have obligations to shareholders, creditors, employees, suppliers, the government and the public at large. To the auditors, behaving ethically is an essential and expected trait in terms of integrity, assuring transparency and accountability, confidentiality, independence and objectivity in every activity. This is evident with the findings, which revealed that there is a correlation between professional ethics and audit quality with a positive and significant relationship (r = 0.863, p 0.01). This implies that there is a significant relationship between the professional ethics and audit quality at Crown Beverages Limited. In order to enhance quality audit and application of professional ethics in auditory work, different recommendations were drawn which include: proper records management, proper evaluation of profiles for auditors, motivation of staff, provision of job training and implementation of fraud detective measures among others.