Abstract
Delivering professional service to its clients, knowledge is auditing firm’s core capital. In conducting its practices and businesses, auditing firms not only capture knowledge within its organization, among its own people but also capturing and protecting the information of their clients. The nature of auditing firms somehow rather controls the flow of knowledge in the firms. Knowledge management is crucial especially for knowledge-intensive firms that utilize and capitalize knowledge in all its transactions. The challenges are to highlights the knowledge management factors in auditing firms and how much knowledge management contributes to their organizational effectiveness. This empirical study reveals that knowledge dissemination, knowledge storing and knowledge protection are more prominent in this type of industry. In addition, trust played a very crucial role in knowledge flow. Knowledge dissemination was found as a main contributor toward organizational effectiveness and trust prevails as important factor in knowledge management applications in the industry.