The Effect Of Agency Relations On The Independence Of External Auditor: An Empirical Study From Libya
Keywords:
Auditor’s Independence, Strengths Sources of Client, Sources Power of Auditor, Conflict between Auditor and ClientAbstract
he objective of this research is to provide empirical evidence about the relationship between the strength of the client on the independence of the auditor. To provide empirical evidence about the sources power of the auditor and the independence of the auditor. To provide empirical evidence about the auditor and client relation conflict the independence of the auditor in the shadow of agency theory, in Libyan environment. To achieve this goal the researchers designed a questionnaire to distribute to external auditor in Libya, due to similarity of study population and homogeneity had been chosen a random sample. The respondents were 75 auditors. The objects are 60 audit. The variables observed are auditor’s independence as Dependent Variable, and 3 independent variables they are: Strengths Sources of Client (X1), Sources Power of Auditor (X2),and Conflict between Auditor and Client (X3). Regression analysis is statistical tools used to solve the research problem. Results of data analysis showed that the first hypothesis, i.e.= "The pressures of the client of the institution, negatively affects the independence of the external auditor" is supported. The second hypothesis, i.e.= "The sources power of the auditor, positively affects of the auditor independence" is also supported, and the third hypothesis, i.e.= “The conflict between the auditor and client, negatively affects the independence of the Auditor” is supported.
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