Extent of External Auditor's Compliance with International Standards on Auditing Related to Financial Reporting - A Field Study on Audit Offices in the City of Tripoli

Abstract

The research investigates the extent to which external auditors comply with International Standards on Auditing (ISAs) regarding the reporting process. The study aims to highlight the significance of implementing ISAs and the professional opinions provided by auditors in their reports on financial statements. Additionally, it examines adherence to professional codes of conduct and neutrality in financial reporting, and explores the correlation between external auditors' academic and professional qualifications and the quality of their audit reports. To achieve these objectives, a questionnaire was designed based on the nature of the primary data required and the research methodologies adopted (descriptive and analytical approaches), drawing on the theoretical framework and relevant prior literature. The questionnaire was distributed to a sample of legal audit firms within the geographical scope of Tripoli; of 38 distributed, 35 valid responses were collected for analysis. Data were statistically processed using the Statistical Package for the Social Sciences (SPSS) to derive findings. Through hypothesis testing, the research reached several key findings, most notably that external auditors demonstrate a commitment to applying international reporting standards and that academic and professional qualifications play a pivotal role in enhancing the quality and credibility of the audit report. The study also put forward several recommendations, primarily: the necessity of conducting extensive future studies on the roles of external auditors to maximise professional benefits, and the importance of raising awareness among practitioners and the community regarding the culture of auditing and the significance of safeguarding public funds through various academic channels, such as seminars, conferences, and scientific lectures.