Factors Influencing the Audit Quality of the Municipalities: Perceptions of Accountants and Internal Auditors

Husni Ibrahim Asad  Rabaiah; Mustafa  Mohd Hanefah; Rosnia  Masruki; Nurul Nazlia  Jamil

doi:10.33102/jmifr.531

Authors

Husni Ibrahim Asad Rabaiah Arab American University (Main campus - Jenin), P.O Box 240 Jenin, 13 Zababdeh, Palestine https://orcid.org/0009-0005-7624-5527
Mustafa Mohd Hanefah Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800 Nilai, Negeri Sembilan, Malaysia
Rosnia Masruki Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800 Nilai, Negeri Sembilan, Malaysia
Nurul Nazlia Jamil Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia, 71800 Nilai, Negeri Sembilan, Malaysia

DOI:

https://doi.org/10.33102/jmifr.531

Keywords:

Independence, Competence, Audit fees, Audit firm sizes, Accounting basis, Internal auditing

Abstract

The study aims to analyze the Audit Quality (AQ) factors that were perceived to be necessary by the accountants and internal auditors in municipalities of Palestine. A survey of 309 accountants and internal auditors from 155 Palestinian municipalities was conducted. The questionnaire data was statistically analyzed using Smart PLS3 software. The study discovered that auditor ethics, independence, and competence were the most significant elements in determining AQ. Meanwhile, Internal Auditing (IA), Accounting Basis (AB), and the Laws and Regulations (LR) have a moderate effect. However, the least crucial factors were Audit Fees (AF) and Audit Firm Size (AFS). The study is limited by the survey questionnaire method’s general limitations and the perceptions of accountants and internal auditors. It offers evidence on AQ from Palestine, helps the audit firms distinguish their marketing and service delivery strategies, and understands the AQ aspects sought by those clients. Moreover, the study provides the municipal councils and the regulators of the municipalities with greater knowledge on how to select the best auditors and maintain internal control measures, notably IA and the use of the accrual basis in accounting procedures. Since the findings are generally consistent with previous studies, more emphasis can be placed on the effectiveness of municipal internal control.

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