Determinants of Auditors' Selection among SMEs in Lagos Metropolis, Nigeria

Abstract

This paper examines the determinants of Auditors' selection among Small and Medium Enterprises (SMEs) in Lagos metropolis. The study was based on Primary data collected through structured questionnaire divided into two parts. Part a was designed to collect general information, while Part B contained the ten factors that determine auditor's selection. The questionnaire on the determinants of auditor's selection among SMEs was adapted from Olowookere & Inneh (2016) and Almer, Philbrick, & Rupley (2014). 300 copies of the questionnaire were administered to respondents who were purposively selected among SME owners in 4 areas of Lagos metropolis (Alaba, Ikeja, Lagos Island, and Surulere) with 75 questionnaires for each area with five-point Likert. 236 questionnaires were returned and analyzed SPSS was used to analyze the data collected. The study inferred that the top factors that determine the choice of auditors among SMEs are the referral by friends and Associates, quality of the written proposal, Long term relationship with the current auditor and owner's preference for specific auditor. This study will be useful to Owners' of SMEs, auditors, Accountancy Professional Bodies, and SME trade groups.