DETERMNANT OF INTERNAL AUDIT EFFECTIVENESS: ON BUSINESS ORGANIZATION: THE CASE OF ETHIOPIAN TRADING BUSINESS CORPORATION

Abstract

The main purpose of this study to investigate determinant of internal audit effectiveness in the case of Ethiopian trading business corporation. Both Descriptive and explanatory research design and mixed research approach. Mainly uses primary data source. To collect the primary data, closed-ended questionnaires were mainly used. A total of 152 questionnaires were circulated, however 139 completed and properly returned, out of the total sample 13 questionnaires were not returned, thus; making the response rate 91.44%. The respondents were selected by using a simple random sampling technique. The data were analyzed using SPSS version 27. Both descriptive statistics, such as mean and standard deviation and inferential statistics like correlation and regression, were used to annualize the data. The results showed that there was a significant positive correlation between internal audit effectiveness and competency of internal audit, and between independence of internal audit and competency of internal audit. The study also found that management support, quality of internal audit, and relationship between internal and external auditors had positive effects on internal audit effectiveness. The study recommended that the organization should enhance the competency of internal auditors, ensure their independence and objectivity, provide adequate management support, maintain high quality standards, and foster a cooperative relationship with external auditors.