Abstract:
The purpose of this study is to assess the practices and challenges of performance audit: in the
case of Development Bank of Ethiopia. Based on literatures there are three types of auditing.
Among them, performance auditing is a recent, dynamic and key discipline and it is vital to the
economy, efficiency and effectiveness of organizations performance. Despite its blessings, the
possible challenges that encounter auditors should not be disregarded. To assess this study, the
researcher used both primary and secondary data collection methods. To collect the primary data,
the researcher distributed 30 questionnaires for the banks Audit Directorate members and
interview 8 management members from other working units of the bank, the secondary data were
collected from different literatures including banks audit manual. The data were analyzed by
descriptive statistics. The findings of the study were two types, the finding about the practices of
performance auditing were organization of the department, whether there were sufficient number
of performance auditors, their qualification, the bank performs post audit practices and related
issues were seen. The findings about the challenges, there were different types of challenges like,
some auditors have difficulties of audit topic selection, difficulty in collecting necessary
information, lacks experience sharing activities in similar financial institutions, lacks enough
media exposure and they report common practices. In light with the findings the study recommends
that the audit topic should be significant, auditable and consistent with the aim of maximizing the
expected impact of the audit, efforts should be made on international, national, or local level of
exchange of ideas, knowledge harmonizing standards, sharing best practices needed, and the
media can play a significant role in enhancing the role and public stand of an audit organization
