FACTORS AFFECTING INTERNAL AUDIT EFFECTIVENESS IN NORTH GONDAR ZONE PUBLIC SECTORS

Abstract

With the latest global economic meltdown and the increasing fraud cases, the internal audit functions are becoming vital in both private and public sectors. With respect to public sectors, the core objective of internal auditing is to aid the public sector to achieve its objective through an orderly and disciplined approach. This can be achieved by improving the effectiveness of control and governance process. This study aimed at examining the factors that contribute to the effectiveness of internal audit in public sectors in North Gondar zone administration which are used pooling system of financial operations. The sampling procedure that applied was multistage sampling technique. Primary data collected by use of self-administered questionnaire from selected 34 government sectors. And it is purely quantitative. A descriptive and inferential technique was use as the data analysis. The collected data analyzed with the aid of Statistical Package for Social Science (SPSS) and the findings of the study had been presented in tables, diagrams, regression analysis and figures. According to the regression output the independence of the internal audit department; competence of the internal audit department; management support for internal audit; and Objectivity of internal auditors; were contributed for the internal audit effectiveness in the public sector significantly and positively. The remaining one variable; Relationship between internal auditors and external auditors; was positively related with the IAE but their contribution were statistically not significance. All of these five independent variables are making 65.2% of the contributions for internal audit effectiveness in the public sector. The public sector should understand that the contributions of these variables were collectively significant to identify any noncompliance activities in their sector and to add values for the IAE in the public sector offices. Keywords: Internal Audit, internal audit effectiveness, Public sector, independence, competence, management Support, and internal Audit objectivity.