Audit quality of financial and compliance audits conducted by the corporate government sector of the Commission on Audit, Regional Office No. 01, Philippines

Abstract

This study assessed the audit quality of financial and compliance audits conducted by state auditors in the Commission on Audit (COA) Regional Office No. 01, focusing on the corporate government sector in Region I, Philippines. Utilizing a descriptive-correlational research design and survey data from 40 state auditors and 120 auditees across various government-owned and controlled corporations, the study examined perceptions of key audit quality determinants and associated challenges. Data were analyzed using weighted mean and Pearson r.

Findings showed that both auditors and auditees rated the influence of five audit quality determinants as high to very high. “Independence and Objectivity” consistently received the highest ratings, while “Adherence to Public Sector Auditing Standards” received the lowest, although still within high category. Challenges were significantly associated with lower financial audit quality but had no significant effect on compliance audit quality.

The study concludes that COA Regional Office No. 01 maintains high audit quality, particularly in compliance audits, underscoring the importance of technical competence and adherence to standards. However, resource, time constraints and threats to independence and objectivity hinder audit thoroughness, especially in financial audits, which are more sensitive to these challenges than compliance audits. Recommendations include targeted auditor training, enhanced resource allocation, stronger methodological oversight, expanded IT support, and improved auditee engagement. Future research should consider broader COA sectors and explore perception gaps between auditors and auditees.