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Determinants of Internal Audit Effectiveness in Business Leadership: The Case of Commercial Bank of Ethiopia


Affiliations
1 Head, Accounting & Finance Program Unit, School of Commerce, CoBE, Addis Ababa University, Ethiopia
2 Addis Ababa University, Ethiopia
     

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Internal audit is essential for giving assurance, risk management, and the effectiveness of the corporate governance structure in an organisation. Thus, the objective of the study was to assess the determinant factors that affect internal audit effectiveness in the Commercial Bank of Ethiopia. Data was collected by distributing 108 five-point Likert scale self-administrated questionnaires to the respondents. The regression result shows that management support, organisational independence, and management perception positively affect internal audit effectiveness, whereas the competences of internal audit negatively and significantly affect the internal audit effectiveness. Based on the findings, the study concludes and recommends that the internal audit of CBE emphasises internal audit function effectiveness, giving more attention to the development of internal auditors through continuous training and by arranging professional qualification opportunities for its staff to enhance the level of internal audit effectiveness, and as a result, strengthen the corporate governance structure of CBE.


Keywords

Internal Audit Effectiveness, Internal Audit, Corporate Governance, Management Support, Organisational independence, Competency of Internal Auditor, Management PerceptionJEL Codes: ● M40: General ● M41: Accounting ● M42: Auditing ● M48: Government Policy
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  • Determinants of Internal Audit Effectiveness in Business Leadership: The Case of Commercial Bank of Ethiopia

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Authors

Dakito Alemu Kesto
Head, Accounting & Finance Program Unit, School of Commerce, CoBE, Addis Ababa University, Ethiopia
Yirgalem Alemu Yisehak
Addis Ababa University, Ethiopia

Abstract


Internal audit is essential for giving assurance, risk management, and the effectiveness of the corporate governance structure in an organisation. Thus, the objective of the study was to assess the determinant factors that affect internal audit effectiveness in the Commercial Bank of Ethiopia. Data was collected by distributing 108 five-point Likert scale self-administrated questionnaires to the respondents. The regression result shows that management support, organisational independence, and management perception positively affect internal audit effectiveness, whereas the competences of internal audit negatively and significantly affect the internal audit effectiveness. Based on the findings, the study concludes and recommends that the internal audit of CBE emphasises internal audit function effectiveness, giving more attention to the development of internal auditors through continuous training and by arranging professional qualification opportunities for its staff to enhance the level of internal audit effectiveness, and as a result, strengthen the corporate governance structure of CBE.


Keywords


Internal Audit Effectiveness, Internal Audit, Corporate Governance, Management Support, Organisational independence, Competency of Internal Auditor, Management PerceptionJEL Codes: ● M40: General ● M41: Accounting ● M42: Auditing ● M48: Government Policy

References