FACTORS THAT AFFECT THE EFFECTIVENESS OF INTERNAL AUDIT ON THE CASE OF COMMERCIAL BANK OF ETHIOPIA

Abstract

The objective of this study was to investigate factors that affect internal audit effectiveness with the selected explanatory variables of management support, management’s perception of internal audit values, organizational independence of internal auditors, placement of adequate and competent internal audit staff, and the presence of approved internal audit charter and to show the influences of the same on the effectiveness of internal audit activities in the Commercial Bank of Ethiopia. The Internal audit staff were the source of the required data to the researcher. The total population size for the study was 98 and out of this total population size only 86 respondents filled and returned the Questionnaires. The study employed a combination of descriptive and explanatory research methods. The appropriate firsthand information was collected through questionnaires distributed. The collected data was analyzed through Excel and SPSS and the findings were described statistically and also presented using Tables. Accordingly the study uncovered that the approved internal audit charter, the existence of adequate and competent IA staff followed by management support highly affect the internal audit effectiveness in Commercial Bank of Ethiopia. However, it is also found that the management perception of internal audit value and organizational independence has a positive effect on the effectiveness of internal audit task accomplishments. So, Commercial Bank of Ethiopia should understand which factors highly affect the effectiveness of its audit team at the corporate level in order to enhance its audit team effectiveness