Determinants of internal audit effectiveness: a case study in hadiya zone’s public finance and economy development sector offices

Abstract

The main purpose of this study is to investigate on the determinants of internal audit effectiveness in the Hadiya zone’s public finance and economy development sector offices (in SNNPR, Ethiopia). This investigation is focused on all 10 woredas (WoFED) and 2 Hossana Administrative-towns public finance and economy development sector offices. The management teams and the internal auditors from a l l o f t h e public finance and economy development sector office are the sources for the required data to the researcher through the questionnaires administered. The resea r ch design used in this study is cross-se ctional. In addition, the findings of this study are to show the direct relation effects of management perception, management support, organizational independence of internal auditors and adequate and competent internal auditor’s staff with the internal audit effectiveness on the public finance and economy development sector management. According to the regression output, the management support and the existence of adequate and competent internal audit staff were contributed for the internal audit effectiveness in the public finance and economy development sector significantly and positively. The remaining two variables; the management's perception for the internal audit value and the organizational independent of internal auditors were positively related with the internal audit effectiveness but their contribution for the internal audit effectiveness was statistically not significance. All of these four independent variables are making 50.7% of the contributions to internal audit effectiveness in the public finance and economy development sector offices. The public finance and economy development sector offices should understand that the contributions of these variables were collectively significant to identify any noncompliance activities in their office and to add values for the inte