DETERMINANTS OF INTERNAL AUDIT EFFECTIVENESS IN SELECTED GOVERNMENT UNIVERSITIES OF ETHIOPIA

Abstract

The increasing rate of financial irregularities, fraud, and mismanagement in Ethiopian Government Universities calls for concern. Despite all control measures put in place by the government, coordinating and regulating agencies, lack of transparency and accountability continues strongly. The objective of this study was to assess determinants of the effectiveness of internal audit in selected government universities of Ethiopia. The study employed explanatory survey research design along with both quantitative and qualitative approaches. Purposive sampling technique was used to select ten universities, 4 from the first generation; 3 from thesecond generation; and 3 from the third generation, from the total of 44 universities. Primary data have been used using self – administered questionnaires for 95 internal audit staffs, 45 middle level and 36 top level managements and semi – structured interview for 7 internal audit directorate directors. A total of 183 respondents were participated in the study. Secondary source of data also used by reviewing documents related to internal audit functions. Descriptive statistics and multiple linear regression model were used to analyze the quantitative data to examine the effect and relationship between IA effectiveness and six determinant factors of IA effectiveness. All the quantitative data was analyzed using a Statistical Package for Social Sciences (SPSS) version 20.The findings of the study revealed that among the four significant factors: independence of internal auditors, competency of internal auditors, internal audit work quality and organizational setting; independence of internal auditors was the most dominant determinant factor for the effectiveness of internal audit. However, 73.5% of the variations in the effectiveness of the internal audit of the universities were jointly accounted by the six variables including management support and perception of managements towards internal audit work value. Therefore, the effectiveness of internal audit in government universities is under question, unless these determinant factors are appropriately pledged. Thus, this study suggests that concerned bodies on government universities have to give attention on the development of internal auditors to be hired at the university level or should arrange ways so that the existing internal auditors in the universities to have continuous professional development.