EFFECTS OF INTERNAL AUDIT PRACTICE ON ORGANIZATIONAL PERFORMANCE; THE CASE OF ETHIOPIAN SHIPPING & LOGISTIC SERVICE ENTERPRISE (ESLSE).

Abstract

Organization performance requires appropriate internal audit practices to improve effectiveness & efficiency. For the purpose of this study the researcher aimed to determine the effect of internal audit on organizational performance of ESLSE. Internal audit was regarded at from the perspective of internal audit standards, professional competency, internal controls and independence of internal audit. The data obtained was mainly quantifiable in nature and hence was analyzed by descriptive analysis. The total population of the study was 60; because of the small size of the population the researcher used all target groups as a sample. The researcher managed a survey questionnaire to each member of the target population since it was the most appropriate tool to gather information. Descriptive statistics such as mean, standard deviation and frequency distribution were used in the analysis of data. Data presentation was completed by use of tables and figures for ease of understanding and interpretation. The result of the study found that internal audit effectiveness positively affected by internal control, corporate governance, risk management and management support of the organization. In addition the study finding also showed that effectiveness of internal audit has direct impact on organizational performance of the company. From the analysis of the study, the study concludes that independence of internal audit, professional competency, internal audit standards, and internal control had a strong & positive relationship with organizational performance of ESLSE. The study finally recommended that management in ESLSE should adopt effective internal audit practices such as internal auditing standards, independence of internal audit, professional competency and internal controls to improve their organizational performance.