Assessment of Internal Audit Practices in Textile Manufacturing Companies. In the Case of Some Selected Companies.

Abstract

The objective of this study was to examine the practice of internal auditing at selected textile manufacturing companies. In order to address this objective, the study employed a descriptive research method and purposively selects four textile manufacturing companies located in and around Addis Ababa. The study employed census method and selected all the 73 internal audit employees working at the four selected textile manufacturing companies. The appropriate firsthand information was collected through questionnaire. The study distributed 73 questionnaires, from which 68 questionnaires were correctly filled and returned. The collected data was analyzed using descriptive statistical tools. The findings showed that though there are internal audit charters in the selected textile organizations, there is a gap in making the content and nature of the charters comply with ISPPIA attribute standards for internal audit charter. The findings also indicated that respondent internal audit employees believed there is good level of management support to the internal audit process and there is a good level of independence in performing internal audit tasks at the selected textile firms. Furthermore, the study uncovered that internal audit employees at the selected companies believed the current workforce available is not adequate to effectively carry out activities. In line with the findings of the study, it was suggested that the textile manufacturing companies need to improve and periodically review their respective audit charters. Moreover, the study recommended the organizations to enhance their internal audit staffs by giving trainings.