THE ROLE OF INTERNAL AUDIT PRACTICE IN PROMOTING OPERATIONAL COMPLIANCE: THE CASE OF ADDIS ABABA HOUSING DEVELOPMENT CORPORATION

Abstract

The objective of this study is to investigate the role of internal audit practice in promoting operational compliance in case of Addis Ababa Housing Development Corporation. By adopting descriptive research design through using censes sampling technique, both primary and secondary data have been used. Totally 50 self-administered questionnaires were distributed to Finance Managers, Internal Auditors, and Senior Accountants in the study area. From these 50 (100 % response rate) questionnaires were completely filled and returned from the organization. The Collected data was edited, coded, and entered in to the computer using SPSS 23 and was then scored. Data analyses are conducted through a descriptive statistic to provide details. The major finding of the research shows that their IAAs done through experiences without acquiring adequate trainings, their audit departments is poorly staffed, internal audit risk assessment activity have not implemented in all the functions and processes of the organization, and risk identification process had not undertaken sufficiently, the organization has not been able to identify and validate customers’ needs and expectations, Compliance with laws, regulations, & contracts even the audit plan were not prepared according to Risk based approach and there were no Evaluation of projects and program accomplishments. Based on these findings the study recommended to enhance the role of internal auditors through training of staff in accredited institutes at home and abroad, preparing a comprehensive charter that incorporate all the activities of internal auditing, hiring compliance officers, establish compliance framework, periodic audits on the compliance function and adherence to the compliance framework, and provide applicable legislation. The organization set adequate internal audit staff including compliance framework with compliance officers, Internal audit risk assessment activity must be implemented in all the functions and processes and all risks properly identify, the organization should be able to identify customer’s needs and expectation, The internal audit department must be followed up each activity Compliance with laws, regulations, & contracts.