THE EFFECT OF INTERNAL AUDIT ON FIRM PERFORMANCE; IN THE CASE OF PHARMACEUTICALS FUND AND SUPPLY AGENCY

Abstract

This study a descriptive type which attempts to investigate the effect the internal audit on firm performance. The study was carried out in Federal Democratic Republic of Ethiopia pharmaceuticals fund and supply agency and its 14 selected branches. 40 internal auditors were used as data source which were selected using the stratified sampling techniques. To obtain the required information close-ended questionnaires were used as data gathering tools. Qualitative and quantitative (Mixed) approaches were employed to analyze and interpret the filled in data. The findings of the study showed that inefficient internal control, inefficient internal audit, lack of internal audit independence and lack of developmental programs for internal auditors and other organizational factors were critical factors influencing the effect of internal audit on the firm performance. To alleviate those problems, it is recommended that the management and the audit department of the organization at head office and branches has to work jointly to improve the performance of the internal audit department and helps the organization to achieve its goals and objectives