Abstract:
The primary objective of this study is to examine the key determinants influencing the
effectiveness of internal audit (IAE), with a specific focus on the Ethiopian Roads
Administration. The study adopts a purposive sampling technique and utilizes structured
questionnaires distributed to all internal audit staff and middle-level managers within the
organization. The analysis is conducted using both correlation and regression techniques to
assess the relationship and impact of five critical variables, Audit Quality, Auditor Competence,
Senior Management Support, Internal Audit Independence, and the existence of an Approved
Internal Audit Charter on internal audit effectiveness. The regression results reveal that all five
variables have a statistically significant and positive influence on internal audit effectiveness.
Specifically, higher audit quality, increased auditor competence, strong support from senior
management, audit independence, and the implementation of a formally approved internal audit
charter are each found to enhance the performance and value-added contributions of internal
audit functions. The findings suggest that the Ethiopian Roads Administration should recognize
the collective importance of these factors in improving internal audit practices and ensuring
compliance with regulations and standards. Enhancing these areas will not only strengthen the
internal control environment but also contribute meaningfully to good governance and
transparency in the public sector. The study is valuable for academicians as it enhances
understanding of the factors influencing internal audit effectiveness. Furthermore, managers can
apply the study’s findings to address practical challenges affecting internal audit effectiveness,
particularly within the Ethiopian Roads Administration.
