DETERMINANTS OF INTERNAL AUDIT EFFECTIVENESS: IN CASE OF FEDERAL PUBLIC ORGANIZATIONS IN ETHIOPIA

Abstract

This study aimed to examine the determinants of internal audit effectiveness in selected federal public organizations in Ethiopia. Using a census, the researcher administered questionnaires to all 130 respondents, including internal auditor heads and internal audit staff from three selected federal public organizations. The study adopted a quantitative research approach, employing both descriptive and explanatory research designs to assess the effect of independent variables on internal audit effectiveness. Key findings revealed high levels of management support and internal audit quality, but lower scores for the size of internal audit departments, internal audit effectiveness, and the relationship between internal and external auditors. Correlation analysis indicated significant positive relationships between the independent variables (use of technology, management support, internal audit quality, size of internal audit departments, relationship between internal and external auditors, and independence of internal auditors) and internal audit effectiveness. Furthermore, linear regression analysis confirmed the substantial influence of management support, internal audit quality, use of technology, and independence of internal auditors on the overall effectiveness of the internal audit function. Based on these findings, the study recommends that organizations enhance management support, invest in technology, improve internal audit quality, address resource allocation, strengthen inter-auditor relationships, and promote auditor independence to optimize the effectiveness of their internal audit practices. The study's findings contribute to the existing body of knowledge on internal audit and provide practical insights for public sector organizations in Ethiopia and beyond.