Federal organizations are fully or partially financed by the government, so their budget must be controlled and examined if they are used their budget effectively and efficiently. This is done by internal auditors assigned by Ministry of Finance and Economic Development for each federal organization. This research was tried to assess the perceptions of management and staffs about an internal audit in federal organizations. This research used descriptive research design, qualitative research approach and a questionnaire as data collection method in order to achieve its objectives. In order to answer the research question, 100 relevant questionnaires were developed and distributed to selected participants in the survey and 76 were received giving a response rate 76 %. The study population was management and staff members of finance, human resource and procurement department of 124 federal organizations. This study used random sampling technique to select federal organizations and staff members in the purposively selected departments. The sample size of this study was 10 top management and 90 finance, human resource and procurement staffs in 10 selected federal organizations. The study used primary data collected from well-structured questionnaires and collected from each sampled organizations. The researcher analysed the collected data using descriptive statistics and presented the data in terms of percentage, mean, standard deviation, frequency distribution and tables. Based on the findings of this study, the management and staffs agreed on the independency, competency, and objectivity of an internal audit. The study recommended internal auditors must be independent, competent and objective in order to be perceived positively by the management and staffs