The influence of credibility independence of auditors on SMEs in Tagum City

Abstract

This quantitative research study is about the influence of auditors' independence towards the credibility of audited financial statements on SMEs in Tagum City. Its primary purpose is to determine what domain of auditors' independence significantly predicts the credibility of audited financial statements. Analyzing auditor independence and the credibility of audited financial statements was done using a non-experimental quantitative research strategy that used correlational and regression approaches. The subjects of the study are 42 accounting and auditing department employees in the entire population of SMEs in Tagum City that were registered during 2021 using non – probability sampling method. Data were statistically treated, analyzed, and interpreted. The study indicates that auditors' independence influences the credibility of audited financial statements. The auditors' independence has an overall mean of high while the credibility of audited financial statements is very high. Results revealed that auditors' independence has a significant relationship with the credibility of audited financial statements. However, when the summary analyzed domains of auditors' independence, results showed that the domains significantly predict the credibility of audited financial statements are audit fee and audit committee independence.