DETERMINANTS OF INTERNAL AUDIT EFFECTIVENESS EMPIRICAL STUDY ON THE CONSTRUCTION AND BUSINESS BANK

Abstract

The objective of this study was to investigate the determinants of internal audit effectiveness (management support, management’s perception of internal audit values, organizational independence of internal auditors, placement of adequate and competent internal audit staff, and the presence of approved internal audit charter) and to show the influences of the same on the effectiveness of internal audit activities in the Construction and Business Bank. The Internal audit staff and auditee across the bank were the source of the required data to the researcher. The Sample size of 132 was identified from the total population 196 using Taro Yamane's Formula and out of which only 120 respondents filled and returned the Questionaires. The study employed a combination of descriptive and exploratory research methods. The appropriate firsthand information was collected through questionnaires distributed. The collected data was analyzed through Excel and SPSS and the findings were described statistically and also presented using Tables. Accordingly the study uncovered that the management support, the existence of adequate and competent IA staff followed by the organizational independence and managements perception highly affect the internal audit effectiveness in in the Construction and Business Bank. However, it is also found that the presence or absence of approved internal audit charter has no effect on the effectiveness of internal audit task accomplishments. So, the Construction and Business Bank should understand which factors highly affect the effectiveness of its audit team at the corporate level in order to enhance its audit team effectiveness. It is recommended that if similar research will be done in the future so as to uncover those factors not included in this study but has consequence on the effectiveness of internal audit activities.