The Role of Internal Audit Function in Promoting Effective Corporate Governance: the Case of National Bank of Ethiopia
No Thumbnail Available
Date
2025-06-07
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
This study examines the role of internal audit function in promoting effective corporate
governance in the case of the National Bank of Ethiopia. Aware that sound governance
mechanisms help ensure stability and accountability in financial institutions, the study
examines how the prominent characteristics of the internal audit function, including
independence, competence, auditing methodology, professional ethics, and support from
management, impact governance effectiveness. Using a framework approach, the study
applied a mixed-method approach, combining quantitative data gathered through
structured questionnaires with qualitative information gathered through key informant
interviews. The target population consisted of auditors, senior managers, and executive
managers in the Bank. 72 usable questionnaires were received for analysis. Data were
processed using SPSS 25, applying descriptive and inferential statistical methods,
including linear regression analysis, to determine the relationship between internal audit
characteristics and the outcomes of corporate governance. The findings indicate that
support from management, auditor competence, and conformity with professional ethics
significantly contribute towards the effectiveness of the internal audit function in
augmenting sound governance practices. In addition, audit independence and the use of
internationally accepted auditing methods emerge as the determinants for sound
oversight and accountability. The study contributes to the academic literature through the
provision of empirical insights drawn from the central banking scenario and the
provision of pragmatic tips for the reinforcement of the internal auditing function in
regulatory agencies. It highlights the need for the internal audit practices in the country
to conform to international standards for it to be firm in ensuring sound governance and
institutional integrity.