The Assessment of Internal Audit Practices in Private Commercial Banks of Ethiopia: The Case of Selected Private Banks
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Date
2018-03
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Addis Ababa University
Abstract
Nowadays, the internal audit profession is moving rapidly from the traditional transaction-based
approach to the new business-based (risk-based) approach. The Institute of Internal Auditors
(IIA) as an exclusive professional body for governing the practices of internal auditing
throughout the world has developed an International Auditing Standards (IAS) and issued a
framework that guiding how internal audit activities should be conducted through using the
IPPF. A revision on these standards was made by the International Internal Audit Standards
Board (IIASB) as effective January 2017. These standards together with the code of ethics
encompass all the Mandatory Guidance Elements (Requirements) of the International
Professional Practices Framework (IPPF). In order to assess the internal audit practices in
private commercial banks of Ethiopia, the aforementioned Mandatory Guidance Elements were
taken as a benchmark for the study. Due to time and cost constraints, the sample of the research
was only focused on five private banks that selected by using purposive sampling technique. Both
qualitative and quantitative data types were applied in the study. The primary means of date
collection, self-administered questionnaire, was employed and distributed to the respective
internal auditors (officers, supervisors & Chief Audit Executives). Moreover, the secondary data
was reviewed from the related IASs and various literatures, journals, articles and automated
files (documents). The collected data was analyzed by using a scientific method, SPSS and
presented by using various tables. Based on the research results, the current practices of internal
audit in Private Commercial Banks of Ethiopia through taking the Mandatory Guidance
requirements of IPPF as a benchmark could be summarized into three groups: components of
standards that fairly complied, did not adequately complied, and poorly (below the expectation)
complied within the selected private banks. In general, the mandatory guidance requirements
conformance level within the selected Private Commercial Banks of Ethiopia did not move up to
the expectation that satisfies the IAS. The existing healthy conformance with certain mandatory
Guidance requirements of the IPPF should be kept up and goes to the sound conformance level
by all elements; the existing inadequate conformance have to make improvements until it satisfy
the needs of all stakeholders; and lastly, it was attached with poor/below the expectation/
conformance, the Quality Assurance and Improvements Program (QAIP) standard; should be
carried out properly by all Private Commercial Banks of Ethiopia were the given ways to curve
all unsatisfactory conformances of the mandatory guidance requirements by private commercial
banks of Ethiopia.
Description
A thesis submitted to
Addis Ababa university college of business and economics department of Accounting and Finance presented in partial fulfillment of the requirements for the degree of masters of science (MSC) in accounting and finance
Keywords
Internal Audit, Internal Auditors, Private Commercial Banks of Ethiopia, Revised Internal Auditing Standards