Factors Affecting Internal Audit Effectiveness: The Case Of Ethiopia Railway Authority

Abstract

Internal auditing is crucial for maintaining organizational performance. This study investigates the effectiveness of internal auditing within the Ethiopian Railway. The research examines how various factors like Technology Utilization, Competence and Expertise, Audit Committee Relationship, External Auditor Reliance, Independence and Objectivity, Quality of Audit Work, Management Support, and Continuous Improvement impact internal audit effectiveness. A total of 32 respondents were taken using Census sampling techniques and gather information using structure questionnaire. Both descriptive and multiple regression analysis were applied to analyses the collected data using SPSS Version 25 software. The findings reveal that several key variables, including Quality of Audit Work, Continuous Improvement, External Auditor Reliance, Audit Committee Relationship, Technology Utilization, and Independence and Objectivity, significantly impact internal audit effectiveness at the 5% significance level. These factors were essential for enhancing the internal audit function, emphasizing the need for high-quality audits, ongoing improvements, effective collaboration with external auditors, and robust audit committee support. Additionally, integrating advanced technology and maintaining auditor independence were also critical for audit effectiveness. To improve internal audit effectiveness within the Ethiopian Railway, management should focus on enhancing audit quality, adopting technological advancements, and fostering strong relationships with external auditors and the audit committee. Addressing these areas will bolster the internal audit function, support the railway’s strategic objectives, and contribute to Ethiopia’s broader economic development