Factors Affecting The Effectiveness Of Internal Audit Function: The Case Of Holeta Town Public Sectors

Abstract

The internal audit is helping organization to achieve their objective through improving the effectiveness of risk management, control, governance process and consulting activity designed to add value and improve an organization’s operations. The main objective of this study was to investigate the factors that affecting the effectiveness of internal audit in Holeta town with a focus of selected public offices by using cross-sectional data and logistic regression model. The study has employed both descriptive survey design and inferential statistics. In order to gather the required data, questionnaire and interview were used. Sample sizes of 108 were used from a population of 147. The samples for the study were selected by using both simple random sampling and purposive sampling selection techniques. Primary data were collected, coded and entered into Statistical Package for Social Sciences (SPSS, Version 24.0) for regression analysis. The findings from this research presented using tables, frequency and percentages. Similarly, the regression outputs were providing evidence that, except internal audit charter, all independent variables have a significant effect on the performance of internal audit. The main conclusions drawn from this study were internal audit staff technical competence; environmental setting, organizational independence and management support for internal audit have a significant impact on internal audit effectiveness. Internal audit charter is insignificant variable affecting internal audit performance. The study also provides recommendations that the internal audit should make professional and competent staff through frequent on job training to provide quality & timely services, create conducive environment, free auditors from the government authority intimidation in their activity and report and the management should give attention and support to perform their professional obligation and duties.