FACTORS AFFECTING INTERNAL AUDIT EFFECTIVENESS IN ETHIOPIA STATE OWNED ENTERPRISES: THE CASE OF ETHIOPIAN SHIPPING AND LOGISTICS SERVICES ENTERPRISE (ESLSE)

Abstract

In recent years, there has been an increasing interest in internal auditing. The aim of this study has to examined the factors affecting internal audit effectiveness in Ethiopian shipping and logistic service enterprise. This study used descriptive and explanatory research design, quantitative research approach was used, by using purposive sampling techniques. Data were collected by primary and secondary source of data, through structured questionnaire by using closed ended question, with a total of 115 questionnaire, were distributed to all internal auditors, senior finance officers, and human resources department of Ethiopian shipping and logistic service enterprise and 95 had collected. The data were analyzed through descriptive and inferential statistical tools such as mean, standard deviation, correlation, and multiple regression analysis. The results of the study indicate that, factors affecting internal audit effectiveness (Competence of internal auditors, independence of internal auditors, quality of internal audit works, and audit committee) have strong positive and significant effect on effectiveness of internal audit in Ethiopian shipping and logistic service enterprise. But Management supports has a positive but insignificant effect on effectiveness of internal audit in Ethiopian shipping and logistic service enterprise. Based on the major findings the study concludes that the contribution of four factors of internal audit effectiveness was found to be significant effect on effectiveness of internal audit. Whereas one factors management support were found to be insignificant effect on effectiveness of internal audit. Therefore, Ethiopian shipping and logistic service enterprise enhance competence of internal audit staff in order to maximize their internal audit effectiveness. It is recommended that if similar research will be done in the future and add other factors that affect the internal audit effectiveness.