Author(s)

Mahmoud Galal Abouelghit^1,2, Shengdao Gan¹

¹Department of Accounting and Corporate Finance, Business School, Sichuan University, Chengdu, China.
²Department of Accounting and Auditing, Faculty of Commerce, Sohag University, Sohag, Egypt.

This study investigates the magnitude of the impact of mandatory audits with bank officers on increasing SMEs’ financing opportunities, reflecting the benefit of SMEs and the national economy in general. Additionally, this study explores the audit market for small and medium-sized enterprises (SMEs) in Egypt and the perceptions between involved parties, especially auditors and owners/managers, about the role of audits in strengthening this vital sector of the Egyptian economy. Also, to determine the level of motivation to accept and undertake mandatory audits for this sector. This study obtained empirical evidence from a survey of 276 bank officers, 304 auditors, 282 SMEs’ owners/managers, and 217 Academics/Economists in Egypt. Additionally, 41 semi-structured interviews/phone calls; 11 bank officers, 8 auditors, 13 SMEs’ owners/managers, and 9 academics/economists asked their opinions about the economic consequences of mandating audits for the Egyptian SMEs. The results obtained confirm that mandatory audits for the Egyptian SMEs positively affect their financing opportunities. Also, mandatory audits for the Egyptian SMEs positively affect the bank officers’ credit-granting decisions.

Auditing, Mandatory Audits, Egyptian SMEs, Financing, Banking

Abouelghit, M. and Gan, S. (2022) Effects of Mandating Audits for Egyptian SMEs on Their Financing Opportunities-Analyzing the Egyptian SMEs Audit Market. Open Journal of Accounting, 11, 149-179. doi: 10.4236/ojacct.2022.112009.