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| External Auditing and The Financial Performance Of Sebbi International Limited, Entebbe
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Owembabazi Promise, Mwesigwa Henry, Dr Arinaitwe Julius
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Abstract:
This study examined the relationship between external auditing and the financial performance of Sebbi International Limited over a five-year period from 2016 to 2020. Sebbi International is a mid-sized manufacturing company located in Entebbe, Uganda that produces agricultural equipment. As the company sought to further expand its operations both domestically and abroad, maintaining robust corporate governance through reliable financial reporting and oversight became increasingly important. To measure financial performance, key financial ratios were analyzed using data extracted from the company's income statements, balance sheets, and cash flow statements for the five-year period. The financial ratios that were assessed included profit margin, return on assets, current ratio, and debt-to-equity ratio, as these metrics provide a multidimensional view of profitability, liquidity, leverage, and overall financial health. External audit quality was evaluated based on the size of the auditing firm, as past research had indicated that larger international firms typically employ more extensive quality control procedures. From the findings, 63% agreed and none disagreed, showing that the majority feel internal controls make sure that all staff follow the directives set by the top management. The audit opinions issued over the five-year period were also examined, as unmodified opinions suggest no material misstatements were detected. The trends in the financial ratios and audit characteristics were then analyzed to determine if rigorous annual external audits corresponded with enhanced financial performance at Sebbi International. The results of this study provided valuable insights into the company's governance practices and strategies for future growth. The head of the external audit department should be responsible to the administration of organisation in Entebbe bottling with sufficient authority to promote independence and to ensure broad audit coverage, adequate consideration of audit reports, and appropriate action on audit recommendations.
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