College of Bussines and Economics

URI for this communityhttps://rps.wku.edu.et/handle/123456789/45798

Browse

Now showing 1 - 20 of 92

DETERMINANTS OF TAX COMPLIANCE OF MICRO AND SMALL BUSINESS ENTERPRISE (MSE) CATEGORY “C” TAXPAYERS, THE CASE OF SOUTHWEST SHOA ZONE, ETHIOPI
(WOLKITE UNIVERSITY, 2018-01) GETAHUN AYANSA BIRAE
This study sought to identify the determinant of tax compliance in Ethiopia, specifically focusing on Micro and Small business enterprises operating in South west shoa zone. The researcher outlined a detailed literature review and identified the variables for this research to be tax rate, tax knowledge, tax compliance cost; attitude of Micro and small enterprises and tax system. The research employed both descriptive and explanatory research design. A sample size of 325 were used from a population of 1726 micro and small business enterprises category “C” taxpayers in south west shoa zone. Data was collected using questionnaires and structured interview. Thecollected data was consequently analyzed using Statistical Package for Social Scientist softare (SPSS V.22) and the findings of the research presented using tables, various chart types ad graphs. The results showed that tax rate, tax knowledge, tax compliance cost, attitude of SME’s and tax system significant determine tax compliance of taxpayers. Tax rate, Tax system and compliance cost predominantly affect tax compliance. With regard to cost of tax compliance, the study revealed that Micro and Small businesses incur different costs such as salary of accountants, fees to tax consultants, cost of stationeries, etc. that contributed for their noncompliance and estimation of Micro and Small Enterprises tax is another problem related tax system. However, the taxpayers do feel and strongly agree that the taxation system in Ethiopia is in great need of improvement. The study then recommended that the current tax law should be amended to incorporate provisions that grant special tax incentives to MSEs in order to improve voluntary tax compliance by MSE taxpayers. The study also recommended that the ERCA should disseminate information on tax rate and tax system more frequently in order to improve the levels of tax knowhow for voluntary tax compliance.
DETERMINANTS OF BUDGET CONTROL IN PUBLIC ORGANZATION A STUDY WITH REFERENCE TO SOUTHERN NATIONS, NATIONALITIES, AND PEOPLES’ REGIONAL STATE (SNNPRS)
(WOLKITE UNIVERSITY, 2018-04) Getachew Mamo, Getachew
The main purpose of this study was to investigate the determinants of budget control in the Southern Nations, Nationalities, and Peoples’ Regional State public organizations. This investigation was focus on five purposely selected public organization that are expected to represent all other bureaus. From the total population, (watson 2001) formula was used to determine sample of respondents. The management team, the internal and external auditors, budget experts, finance officers, tax and planning experts of the selected public organization were the sources for the required data to the study through questionnaires adminstered. The STATAS software was used to analyze the data using descriptive statistics, including mean, standard deviation and logistic regression used to analysis inferential output. For this study, eight independant variables were identified including budget planning process, management support, competent internal audit staff, organizational commitment, budget monitering and evaluation, information and communication, cost reduction and competency of human resource in budget department. The dependent variable is degree of budget control which was measured under Binary logistic regression. According to the logistic regression output, budget planning process, competent internal audit staff, organizational commitment and competency of human resource in budget department were contributed for the budget control in the public sector significantly and positively but budget monitoring and evaluation for the budget control was negatively and significantly related. The other variables organizational commitment were positively related with the budget control, but its contribution for the budget control were statistically insignificance at 5% level and management support also positively related with the budget control, but its contribution for the budget control were statistically insignificance at 5% level. All of these eight independent variables are making 50.93% of the contributions for budget control in the public organization. Then, the researcher recommend that public organizations should understand the contributions of these five variables collectively significant and their odd ratio were greater than one to infinity indicate the relationship between those predictors and the outcomes and add values for the budget control in the public sector offices.
ASSESSMENT OF TAX AUDIT PRACTICE AND ITS EFFECTIVENESS IN ENHANCING TAX REVENUE THE CASE OF LARGE TAX PAYERS BRANCH OFFICE OF ETHIOPIAN REVENUE AND CUSTOMS ATHORITY
(2018-06) MELAKU KINFE
The purpose of this study is to assess the tax audit practice and its effectiveness in enhancing tax revenue of large tax payers’ office. The study examines tax audit practice and its effectiveness with dimensions of experience and capable audit staff, tax payer’s record keeping, tax payer’s office information system, audit case selection and examination method, the type of audit used and frequency of tax audit influence audit effectiveness in LTO. In light of this objective the study adopted mixed research method of research approaches. Specifically, the study used survey of questionnaire analysis offices’ on tax auditors and team leader, and interview analysis on team leaders and process owners. Then tax auditors and team leaders were selected based on Census method, because, the target population studied is small. In large tax payer’s office there were 80 tax auditors supervised and lead by 10 team leaders managed by two process owners. Then the researcher distributed those questionnaires to the 90 tax auditors and team leaders, only 80 of them were returned. Consequently, Data was then analyzed on quantitative basis using inferential statistics (Anova and linear regression analysis) and descriptive statistics (frequency, percent, mean and standard deviation). Qualitatively interview was presented to process owners. The results of the study enable us to conclude that tax audit type, experience and capability of audit staff and audit case selection and examination method as a linear combination significantly influence tax audit effectiveness in the organization studied. However, tax payers record keeping, tax payers information system and frequency of tax audit were not significantly to undermine tax audit effectiveness. In the end, the study forwards the possible measures to be taken by the Ethiopian Revenue and Customs Authority to mitigate problems in tax audit operation. The authority should conduct further study to alleviate the problems which are related to tax audit.
EXCHANGE RATE, NET EXPORT AND ECONOMIC GROWTH IN EAST AFRICAN COUNTRIES: PANEL DATA ANALYSIS
(WOLKITE UNIVERSITY, 2018-06) AMSALU BICHINU AYALEW,
This paper examines an empirical investigation of exchange rate, net export and economic growth in east African countries. The study fully employing a strongly balanced panel data the period from 2000 to 2015/2016.The data set is collected from NBE, IMF and WB. The study employed Random effect model as confirmed by Hausman test.The study found that net export; real exchange rate, trade openness and expenditure of government are positive and significantly explained economic growth.The empirical investigation of in this study indicates that both exchange rate and net export are equally important and the advance issue of determining economic growth.The estimation result suggested that, a depreciation of exchange rate and the improvement of net export were improves economic growth and all types of import and exports, a result that is statistically significant and consistent with the standard economic theory. The policy recommendation of these countries should take emphasis and give more attention to improve more advancements of manufacturing product rather to devaluate exchange rate
INTERNATIONAL REMITTANCE AND ECONOMIC GROWTH IN ETHIOPIA: AN AUTOREGRESSIVE DISTRIBUTED LAG APPROACH
(WOLKITE UNIVERSITY, 2018-06) ABDURAHMAN AGIRO
Having the general objective of investigating the relationship between international remittances and economic growth in Ethiopia, this study used an auto regressive distributed lag (ARDL) model or Bound Testing approach to co-integration. The data used is from Ethiopian economic association, national bank of Ethiopia and World Bank Development Indicators which spans from 1980 to 2016. The outcome of the study revealed that, both the long run and short run growth impact of international remittance during the study period is positive and significant. Apart from this, other growth determinant factors, such as real gross fixed capital formation, human capita and consumer price index are found to significantly and positively affecting growth in Ethiopia. Trade openness has found Negative and significantly impact economic growth. Moreover, the Granger Causality test has confirmed that there is a unidirectional causality which runs from remittance to output. The most important policy implication that comes out of this study is that the government as well as other concerned stakeholders should work on easing the remittance sending process and cost, so as to better extract the economic benefit of international remittance.
DETERMINANTSOFAGRICULTURALPRODUCTIVITYAND RURALHOUSEHOLDINCOMEINETHIOPIA
(WOLKITE UNIVERSITY, 2018-06) BIRHAN GIRMA
Population Growth and Economic Development in Ethiopia
(Wolkite University, 2018-06) Kasim Nejmu
The debate on the relationship between population growth and economic growth has been undergoing over a long period of time and yet it is inconceivable developing countries in generally and Ethiopia particularly. Hence, this study aimed to analyze the impact of population growth on economic development of Ethiopia using time series data from 1974/75 to 2015/16 by employing Johansen co-integration test, Granger causality test, VAR and VECM. The study found that population growth had a significant negative impact both in the short run and in the long run on economic development. While government education expenditure as percentage ofRGDP is positive and statistically significant relationship with economic development. The results of causality test shows that there exists unidirectional relationship running from economic development to population growth in long run. Lastly the study recommends that the government as well as the concerned body should exert their effort to balance the population growth and economic development
ASSESSMENT OF INTEREST FREE BANKING SERVICE (CASE OF COMMERCIAL BANK OF ETHIOPIA WEST ADDIS ABABA DISTRICT)
(WOLKITE UNIVERSITY, 2018-06) BERHANU BEYENE NURGI
The main objective of this Study is to assess interest free banking service in commercial bank of Ethiopia- West Addis Ababa District. The study has employed descriptive research design and has used both primary and secondary data which have been collected through structured questionnaire and semi structured interview. A total of 398 sample respondents were taken through judgment & Convenience sampling for Employees & Customers respectively. The data was analyzed using descriptive statistics of mean, frequency, percentage, and standard deviation using Statistical Package for Social Science version 16 software. Based on the analysis of the study, the result shows that there is performance lagging of Interest free Banking financing products, lack of well trained & experienced employees with Interest free Banking in the branches, lack of awareness of customer about Interest free Banking products, inadequate marketing and promotion, unavailability of Interest free Banking financing products in all ofCommercial Bank of Ethiopia branches, and Interest free Banking as ameans of resource mobilization Strategy in Commercial Bank of Ethiopia. The study concluded that, Commercial Bank of Ethiopia has the capacity to provide the other interest free banking products & Service to its customers provided that there is commitment and support from all stakeholders of the bank including National Bank of Ethiopia. Based on the results of the findings, the study recommended that Interest free Banking should be given the necessary attention and support from all stakeholders, the bank has to be ready and committed in all aspect to deliver Interest free Banking products, aggressive promotion and marketing campaign about Interest free Banking products should be made, The Bank has to increase the accessibility of Interest free Banking products through increasing Interest Free Banking Window at each service providing Branch.
Impact of technology Adoption legume producing on Farmers’ Income: A Case study of Guraghe Zone
(Wolkite University, 2019) Sahlu Badishe
The importance of agricultural technology in enhancing production and productivity can be realized when yield increasing technologies are widely been used and diffused. Standing from this logical ground, this paper aimed to evaluate the impact of legumes technologies adoption on farm income on Guraghe Zone in Ethiopia. This study used cross sectional data that acquired from total of 204 households which were randomly and proportionately sample from 9 major legumes producer kebeles in three district of Guraghe zone stratifies sampling techniques. Logit model was used to estimate to identify underlying factor that determine adoption of legume technologies(improve legume seed, fertilizers, chemicals, inoculants and farming techniques). PSM model wasused to estimate to evaluate the impact of legume technologies adoption of farmers’ income. Descriptive statistics and econometric models were used to analyze the data. The results from log it model indicate that educational level of household, the household headed, member of cooperative association, to advices to agricultural extension services, size of cultivated land forcrop, credit access, off-farm participation and tropical livestock unit positively significant adopt of legume technologies adoption. If female of household headed and plot size for legumes crop cultivated purpose negatively significant influence of legume technologies adoption. Impact assessment of the marginal effect showed that farmers who had adopted legume technologies could enhance their annual total income level by 46.6% and the crop income particularly from grain legume has been increased by 88%. What about the impact based on the findings, the study suggests that strengthening the promotion of full package technology adoption will have crucial role towards improving the livelihood of households in the study area. In doing so, managing the possible influencing factors that affect adoption of legume technology should be a prerequisite.
IMPACT OF WORKING CAPITAL MANAGEMENT ON PROFITABLITY: EVIDENCE FROM SELECTED MANUFACTURING COMPANIES IN SNNPRS, ETHILOPA.
(wolkite university, 2019-01) Abiyot Gossaye Teka
Working capital management is the administration of current assets and current liabilitiesand it is directly affects the liquidity and profitability of company. Hence, efficient workingcapital management involves excessive planning and controlling and it is very important toequalize between current assets and current liabilities to eradicate the risk of insolvency.The objective of this study is to examine the impact of working capital management onfirms’ profitability and review the statistical significance between components of working capital management. In light of this aim the thesis implement quantitative method of research approaches to test the study hypothesis. Hence, the study used survey of companies audited financial statements. The purposive sampling method was used. Consequently, the study selected a sample of 11 companies for the period of eight years(2010-2017). Data was analyzed on quantitative basis using descriptive and regression analysis (Pooled ordinary least square) method was used. It observe the components of working capital for instance accounts receivable management, inventory holding period, accounts payable period, and cash conversion cycle in relation to ROA. In addition the study observes current ratio, company size, company growth and debit ratio as control variables. The key results from the study are; a negative significant at 5 percent relationship between account receivable management and profitability. Cash conversioncycle have a negative and statically significant at 5 percent relation with profitability. Opposed to the research hypothesis, account payable period has a negative statically significant at 5 percent relation with profitability. The manufacturing company of SNNPRS ,Ethiopia managers can increase profitability of their firms by limiting the time gap between company’s expenditure for purchases of raw materials and the collection of sales of finished goods. In general the study recommended that firms should minimize working capital management components in order to maximize profitability.
THE EFFECT OF NETWORKING ON PERFORMANCE OF MEDIUM SIZE ENTERPRISE IN ETHIOPIA
(WOLKITE UNIVERSITY, 2019-01) BELAY ASEFA, BELAY
In order to stay competitive in business and improve performance, medium size enterprise firms to understand how, when and with whom to networked to improve on their performance and increase their market share and worthiness of their firms. The general objective of this study was to evaluate the effects of networking on performance of medium size enterprise firms in Ethiopia medium size enterprise need to work in collaboration with others. It is necessary to create chain that gives value for business through networking. The purpose of this study was to test the impact of networking on the business performance of medium size enterprises in Ethiopia. The questionnaire survey method was used in this study to collect data from respondents. The data was collected from 128 samples of respondents recognized through stratified random sampling technique and the collected data was analyzed using ordered probit model: which is one of nonlinear models used for analyzing data measured on ordinal scale. This research paper identifies the relationship between enterprise and the concerned stock holder improved business networking enterprises increased their performance IN this survey study it was found that networking with financial institutions, business connection, trade linkage and quality of the relationship in network positively and significantly related with business performance of medium size enterprises. In addition to this, firm age was positively and significantly related with business performance of medium size enterprises. This was indicated with regression co-efficient of the variables the result of this study recommends the need for government and other stakeholders to improve the networking skills of medium size enterprise to significantly improve business performance
Impact of Road Infrastructure Development for Economic Growth in Ethiopia
(WOLKITE UNIVERSITY, 2019-01) Bahirnesh Assefa
This paper examined impact of road infrastructure development on economic growth in Ethiopia. The general specification of the model is an augmented Solow Growth model. Such a model is basically a VAR. The logarithmic form of this production function of Solow growth model allows including road network and good values of export or import in national currency per total road length variables which impact for growth of GDP. Vector auto regressive model (VAR) use analyzes the secondary data for the long run relationship between road infrastructure development and economic growth in Ethiopia. The study is making use of time series data for the period 1975 to 2017. The data used is from secondary data sources such as central statistics agency, World Bank, IMF, MOFED, and African Development Bank (ADB). The objective of the study is the impact of the road infrastructure development for economic in Ethiopia. The result shows that road infrastructure development for asphalt road, gravel road, road density per 1000 km2 and export of goods values per total road length in national currency have a positive impact with economic growth in the long run. And also in the same result that total road length per 1000 persons (labour force) and importing goods values per total road length in national currency shows a negative impact on economic growth in the long run. Based on the findings, it was suggested that the government should come up with sustainable and implementable road infrastructure development for economic growth. Maintenance Road Sector Development Program (RSDP) that will ensure good access road network in Ethiopia. Also, economic growth in Ethiopia depended on the level of good and accessible road network is increasing transportation and facilitates for exporting goods (economic activity)
Multidimensional Measure of Poverty in Urban Ethiopia
(Wolkite University, 2019-01) Awoke Ambachew
Multidimensional, Poverty, logit, Urban, Ethiopia
THE IMPACT OF FOREIGN AID ON AGRICALTURAL GROWTH IN ETHIOPIA A TIME SERIES ANALYSIS
(WOLKITE UNIVERSITY, 2019-01) Abdulhake Teni
The study has empirically examined the impact of foreign aid on Agricultural growth in Ethiopia over the period 1974/75 to 2015/16 using time series analysis. The main hypothesis of the study is that foreign aid has an impact on agricultural growth of Ethiopia. To test this hypothesis an empirical model is estimated using Johansen integration test and Vector Error Correction model (VECM) as the estimation techniques to estimate the long run and short run relationship. The empirical result from the statistical analysis shows that foreign aid has negative insignificant impact on agricultural growth in the long run and also arable land, capital investment, labor and government expenditure on agriculture sector have positive significant impact on agricultural growth in the long run. The result of the study reveals that foreign aid which is directly given to agricultural sector for agricultural growth has a long-run relationship according to the Johansen integration test. The most important policy implication of the result is that arable land capital investment labor and government expenditure is crucial to increase agricultural growth of Ethiopia both in both long run and short run than encourage direct foreign aid in agricultural sector.
THE ROLE OF ACCESS TO CREDIT AND ITS EFFECTIVENESS IN REDUCING UNEMPLOYMENT THE CASE OF SELECTED MICRO AND SMALL SCALE BUSINESS ENTERPRISE IN MESKAN DISTRICT, GURAGE ZONE
(WOLKITE UNIVERSITY, 2019-01) BELETE BIRATU ANDETA, BELETE
This research aims to the role of access to credit and its effectiveness in Reducing Unemployment in Gurage Zone: the case of Mesekan District selected MSE᾿s. For the sake of achieving the objectives of this study, questionnaires were analyzed using statistical analysis such as descriptive and inferential analyses. Mean and Standard deviation explained the descriptive statistics while Pearson Product Moment Correlation Coefficient and Multiple Regressions applied. Information was gathered using a five point Likert scale questionnaire from a sample of 115 micro and small scale operators and through an interview conducted with 20 micro and small scale operators. The respondent operators were selected using stratified random sampling technique from each stratum; the sample has been selected through disproportional stratified sampling used. Besides, the interview questions were analyzed using descriptive narrations through concurrent triangulation strategy. The empirical study elicited eight major challenges which seem to affect the effectiveness of credit access of MSE's in the District which include: marketing, management, technological, finance, entrepreneurial, working premises, infrastructures factors and including bureaucratic bottlenecks system. The findings further indicated that among the independent variables Marketing, management, technological and financial factors were the major factors that significantly affected the effectiveness of credit access to reducing unemployment. Based on the findings it was recommended that government to establish well structured marketing sites by providing selling and display places in areas close to working area and Provision of training on quality improvement in order to improve the effectiveness of credit access. Provision of business development services such as training technical and managerial, advisory and counseling services are very crucial for effectiveness of credit access of MSE᾿s. micro finances institutions should improve access to finance through offering a better lending terms and conditions and also government supporting institutions work effectively and efficiently for the effectiveness of credit access
Impact of Self Help Groups (SHG) on women welfare indicators in Waliso Town, South West Shoa Zone, Oromia Region, Ethiopia
(WOLKITE UNIVERSITY, 2019-01) Misgana Gedafa Kitesa
The study was initiated to assess the impacts of self-help groups in women welfare indicators, investigate the welfare of women, identify the factors by using random sampling technique in cross sectional data types with propensity score match model to evaluate the treated and control group and identify the challenges encountered. Self help groups (SHG) face at unit and system levels and explore the contribution of social organizations in strengthening SHG. The study result revealed that self-help groups (SHG) are playing important role in determining the status of women in self-help groups (SHG) and the level of decision making in the group and at household level. The core point of this paper is that working impact of Self help group which contains the introduction part literature review methodology result and discussion and the conclusion and recommendation. Women are also advocating about women and their families in several occasions and are attracting the attention of the administration at different level as important partner. The income, asset accumulation, food and non food consumption expenditure and saving of women have shown improvement with the amount of loan they borrow from the inbox of the self-help groups (SHG). The welfare indicators that women incurred from the organization in Self help group make them more economically independent. Generally, the impact of self-help groups (SHGs) is magnificent in improving women welfare and makes themto be economically self-reliant. Types of occupation such as traditional alcohol work, preparing and selling dry “enjera”, animal fattening, the Communication and experience; saving and access to credit are significant and need more external support are more the focus of this stud
ROLE OF PRODUCTIVEE SAFETY NET PROGRAM ON HOUSEHOLDS PARTICIPAION ON OFF-FARM ACTIVITIES IN ETHIOPIA: THE CASE OF MAREKO DISTRICT
(Wolkite University, 2019-01) REDWAN KEDIR
This research attempted to assess the role of productive safety net program on household participation on off-farm activity in Mareko district of Southern Nation Nationality Region. Purposive, stratified proportionate random sampling and simple random sampling techniques were employed to select sample respondents. A total of 200 households were selected for the study. The instrument developed was survey questionnaire. Both qualitative and quantitative data were gathered for the study. Descriptive statistics like frequency, percentage, and econometrics models were employed to analyze the survey data. The descriptive statistics result revealed that, from the sampled respondents the majority (66.5 %) of households was participated in off-farm activity. From the total sampled respondents almost all were got their livelihoods from agricultural activities, which account on average (50 %) of the total annual income. The remaining 27% of incomes of the rural household head were off-farm activities. The result of probit model regression also indicates that, Gender (sex of household head, farming land size and total household size were found out significantly and positively affect the off-farm activity participation, while, age of household head, farm income and marital status were found out negative and significant factors. Propensity score matching techniques was used to analyzes the effect of PSNP participation on off-farm activity income. Albeit the result from the PSM was not statistically significant, it indicates that participation in PSNP program had negative effect on the off-farm activity income. Finally, it was recommended that Government and NGOs should provide training on more profitable off-farm activities for PSNP beneficiaries to support household’s participation on off-farm income generating activities
TAX REVENUE AND ECONOMIC GROWTH IN ETHIOPIA: A PANEL DATA APPROACH
(WOLKITE UNIVERSITY, 2019-01) MULUGETA ENDALE, MULUGETA
This study examines tax revenue and economic growth in some selected regional state of Ethiopia using annual panel data. Theoretically and empirically, it has been showed that taxes affect the allocation of resources. The main purpose of this study was to reveal the relationship between tax revenue and economic growth for the regional state of Ethiopia during the period 2005-2017. While, analyzing the effect of tax revenue on economic growth, the study applied panel long run and short run relationship between tax revenue and economic growth. The study applied fixed and random effect model, Johansen’s co integration test, VECM, and Granger causality test. The tax revenue with its component though affects economic growth significantly. The causal relationship with economic growth in the long run is not significant as expected. This implies there is independence between tax revenue and economic growth. In the short run the finding shows that there is no jointly causality between tax revenue and economic growth. Furthermore, the speed of adjustment is slow; however, to improve the speed of adjustment needs more controlling and monitoring system should be applied. The findings of the study major issues should the policymakers consider for effective taxation policy formulation and implementation of the economy.
Determining Factors of Liquidity of Private Commercial Banks in Ethiopia
(WOLKITE UNIVERSITY, 2019-06) Abenezer Tesfaye
This study intended to examine the determinants of Liquidity in Private Commercial Banks in Ethiopia. In view of that, this study determined the bankspecific and macro-economic factors affecting bank liquidity for Six Private commercial banks in Ethiopia, covering the period of 2000-2017 by usingbalanced fixed effect panel regression. The findings of the study showed thatcapital adequacy, and inflation had statistically significant and positive relationship with banks’ liquidity. Bank size had a negative and statistically significant impact on Private Commercial banks .Loan growth had positive and statistically insignificant impact on Private Commercial banks. GDP growth rate has statistically insignificant and positive influence on the liquidity of private commercial Banks. Inflation had positive and significant impact on banks liquidity.On the other hand, the results of the study profitability were quite surprising. The result is conflicting with researcher’s expectations and also a finance theory which emphasizes the negative correlation of liquidity and profitability. Moreover, the coefficient of profitability was not statistically significant, implying that its Influence is insignificant. This positive relation shows that, higher profitability leads to increase banks liquidity. Conclusion about the impact of Ethiopian bank’s profitability on liquidity remains ambiguous and additional investigation is required. The researcher recommended that to maintain adequate system for managing liquidity of private commercial banks in Ethiopia.
Factors Affecting Internal Audit Effectiveness in Governmental Sectors: Case Study in Guraghe Zone
(WOLKITE UNIVERSITY, 2019-06) Abidlemewella Bedewi
The main purpose of this study was investigating factors affecting internal audit effectiveness in governmental sectors in guraghe zone, SNNPRS. As a result, the study used 13 randomly selected sectors (four out of eleven regional sectors with IA work process, one & the only federal sector and eight out of fifteen zonal sectors with IA work process) out of purposively selected 27 governmental sectors that have IA work process. The sectors were stratified into three strata (federal government, regional government and zonal government related sectors). Simple random sampling was applied on each stratum to get sectors that were used to form the sample size. Distributing two types of prepared questionnaire to 128 top management & IA, primary data was collected from 116 respondents (response rate 90.625%). Descriptive statistics & OLS multiple linear regression to measure IAE and to identify factors affecting IAE were applied respectively. Internal audit independence, management support, adequate and competent internal audit staff, sufficiency of budget, level of objectivity, approved IA charter, unrestricted information access and professionally competent team leader were hypothesized factors to be investigated and all of these factors were expected to have positive and significant impact on IAE. Out of these eight factors, internal audit independence, sufficiency of budget and unrestricted information access, were factors identified to have positive and significant contribution to IAE & internal audit independence was identified to be the most important deriver of IAE. But management support, level of objectivity, approved IA charter and professionally competent team leader were investigated to have insignificant positive contribution to IAE. Beta sign to adequate and competent internal audit staff showed that the variable has negative and insignificant contribution to IAE. Regression output of the analysis showed that 62.3% of the study is explained by the model and it showed that all of the variables collectively could play very important role to contribute for IAE.