The Relationship between Auditor's Independence and Financial Reporting Fraud Risk Assessment: Evidence from Yemeni Context

The purpose of this study is to examine external auditor's independence related factors (IRF) associated with financial reporting fraud risk assessment (FRFRA). A quantitative instrument was used to measure FRFRA and IRF. In total, 254 external auditors participated in this study. Results found that social relations, and hiring and changing of the auditor are positively and significantly associated with FRFRA. Otherwise economic relations and audit fees are insignificant. This study serves to inform external auditors on how to improve their consideration of FRFRA. It also contributes to the limited body of research on FRFRA within IRF in the emerging economy. New variables were included for external auditors’ independence related factors. These variables consist of social relations, economic relations, and hiring and changing of the auditor. By including these new variables, more contributions are made to the extant literature and more evidence is provided on the results of external auditors in the Republic of Yemen. Keywords: Independence related factors, External auditor, Fraud risk assessment, Financial reporting, Yemen.

Abstract licence: CC BY

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