Determinants of Internal Audit Effectiveness: A Comparative Study of Ethiopian Shipping and Logistics Service Enterprise and Ethiopian Electric Utility
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Date
2018-06
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Addis Ababa University
Abstract
The main purpose of this study was to investigate factors of internal audit effectiveness and to compare the performance of the audit activity between two Ethiopian public sector offices. These are Ethiopian shipping and logistic service enterprise (ESLSE) and Ethiopian electric utility (EEU). The management teams, internal auditors and senior officers of these offices were the source for the required data to the researcher gathered through questionnaires administered with five point likert scale. Eighty data was collected from both organizations. The data collected was then analyzed by descriptive and explanatory method aided by SPSS version 20 data analysis tool. According to the perception of their own employees, organizational independence for auditors both organizations score the lowest point, where both organizations do not have audit committee. In EEU even though the size of the audit department is large, their experience and competence is lower than ESLSE. As a result, the value adding ability is lower than ESLSE. In all measurement, in both organizations, the mean score is just above the neutral point which shows the effort to have effective internal audit need to be improved to reach up to the required level. Based on multiple regression models, the main determinant of the performance of audit activity at EEU is experience and competency of internal audit while the insignificant determinant is Organizational independence. But, the main determinant factor of Value add ability of Internal Auditor and hence performance of the audit activity at ESLSE is management support followed by approved internal audit charter while the insignificant factor is Organizational independence the same as EEU. This research can be used by managers of both organizations to improve their internal audit effectiveness.
Description
Thesis submitted to the department of accounting and finance, in partial fulfillment of the requirements for the Master of Science degree in accounting and finance
Keywords
Ethiopian public sector offices, Determinants of internal audit effectiveness, Internal audit