Determinants of Internal Audit Effectiveness in Ethiopian Commercial Banks: The Perception of Internal Auditors
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Date
2020-06
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A.A.U.
Abstract
While effective internal audit is a critical component of company management and a foundation for safe and sound operation of organizations, there is lack of mutual understanding with regards to the effective functioning of internal auditing. In this regard this study seeks to assess the determinants of internal audit effectiveness in Ethiopian commercial banks. The main objective of this study is to identify determinants of internal audit effectiveness for Ethiopian commercial banks. The researcher reviewed related literatures and adopted the explanatory research design. The study populations are staffs of internal auditors in Ethiopian commercial banks. A sample size of 225 respondents was used for the study and purposive sampling technique was adopted. Primary data was used to study this research which was collected through questionnaire and interview and the data got from the questioner was analyzed using STATA software based on the assumption of classical linear regression model (OLS). when we see the findings two variables from the predictors included in this study are becomes insignificant for the effectiveness of internal audit that are quality of audit work and usage of accounting information system but the other four that are competency of internal auditors, independency of internal auditors, top management support and organizational setting significantly affect internal audit effectiveness regarding on value adding roll, increase department performance and organizational performance. The researcher of this study mainly recommended ECB’s to increase effectiveness of internal audit by giving their attention to increase competency of internal auditors in terms of international certifications, assuring independency of internal auditors in terms of giving their freedom to do their work independently, the management of ECB’s has to be supportive in terms of staffing enough employees for audit , helping to prepare different trainings and development programs for audit department, allocating enough budget and preparing standardized procedure against which auditees work to be audited.
Description
A Research Thesis Submitted to Addis Ababa University, College of Business and Economics, Department of Accounting and Finance, in Partial Fulfillment of the Requirement of Master of Science (Msc) in Accounting and Finance
Keywords
Effectiveness of internal audit, Ethiopian commercial banks, Lnternal audit