The Effect of Enterprise Resource Planning System Implementation on Internal Audit Effectiveness: The Case of Commercial Bank of Ethiopia
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Date
2019-02
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Addis Ababa University
Abstract
Enterprise Resource Planning (ERP) systems appear to have significant effect on the auditing
function, internal control procedures and auditors’ role. The traditional Internal Auditing
Function which looks only for errors is insufficient and challenged after ERP systems
implementation. The main purpose of this study is to investigate the effect of ERP on internal
auditing effectiveness in Commercial Bank of Ethiopia (CBE). In addition, the finding of this
study is to show the direct effects of management support, organizational independence of
internal auditors, adequate and competent internal auditor’s staff and the internal auditors’ role
and responsibilities in assessing and managing risks and with the internal audit effectiveness in
ERP environment. Explanatory research design was used for the study, with a quantitative study
approach to analyze internal audit effectiveness in an institution that implements ERP. The target
population was 112 Human resource Personnel out of which census was used to select as
population size is 112. Data was collected by using questionnaire at office levels of the
organization. The data collected was analyzed using statistical Package for Social Sciences
SPSS 25. According to the regression output the management support, the existence of adequate
and competent Internal Audit staff and the cost associated with risk assessment and management
significantly and positively contributed for the internal audit effectiveness in CBE. The
remaining two variable; risk assessment and manage for the Internal Audit value and the
organizational independent of internal auditors were statistically not significance. All of these
five independent variables are making 43 % of the contributions for internal audit effectiveness
in CBE. The bank and other concerned institutions should understand that the contributions of
these variables were collectively significant to identify any Internal Audit activities in their office
and to add values for the Effective internal Audit in banking sector specifically in CBE.
Description
A thesis submitted to the Department of Accounting and Finance of Addis Ababa University in
partial fulfillment of the requirements for the Degree of Masters in accounting and finance.
Keywords
Commercial Bank of Ethiopia, Effective Internal Audit, Enterprise Resource Planning