Determinants Of Internal Audit Effectiveness In Ethiopia: The Case Of Federal Government Budgetary Public Sectors In Finfene

Abstract

All budgetary public sectors are expected to have clean audit opinion and accountable for the appropriate utilization of public resources. Internal Audit is the backbone of any organizations and it is expected to contribute to the effectiveness of resources utilization and proper implementation of government rules and regulations established for public sectors to achieve their final objective through internal control method and advise (consultancy) role. Where there is effective internal audit team is the organization is strong and effective in its activities. Thus, the main purpose of this study was to investigate the determinants of internal audit effectiveness in federal budgetary public sectors found in Finfine, Ethiopia. The study used explanatory research design and mixed research approaches and investigates effectiveness of internal audit by focusing on 25 purposely selected budgetary public sectors. The quantitative questionnaires adapted and constructed in 5-point Likert scale questionnaires were distributed to all internal auditors in selected budgetary public sectors and 79 questionnaires were collected from internal auditors and analyzed using statistical software SPSS V25. According to the regression output of SPSS the cooperation between internal and external auditors, the availability of approved internal audit charter and the existence of adequate and competent internal audit staff were contributed positively and significantly for the effectiveness of internal audit in the budgetary public sectors. Organizational independence have negative and significant contribution while the remaining two variable; management support and management perception were positively and negatively related respectively with the effectiveness of internal audit and their contribution were statistically not significance for effectiveness of internal audit. The budgetary public sector should understand that the contributions of these variables were collectively significant to identify any noncompliance activities in their sector and to add values for the EIA in the public sectors