Determinants of Internal Audit Effectiveness in Roads Construction Sector, Case Study in Ethiopian Roads Authority

Abstract

The main purpose of this study is to investigate on the determinants of internal audit effectiveness. The study has been conducted by taking purposive sample and data was collected using structured questionnaires distributed to all internal audit staffs and middle level managers of Ethiopian Roads Authority. The data analysis part was done using SPSS version 20 (Statistical Package for the Social Science). Regarding to demographic variables they were analyzed through descriptive statistics tools. Whereas, to investigate the effect of Audit Quality, Auditors competency, Top Management Support, Independence of internal audit and Approved Internal Audit Charter on internal audit effectiveness the correlation and regression analysis were used. According to the regression output Audit Quality, Competence of internal audit, Management support, Independence of internal audit and approved Internal Audit Chart were contributed significantly for the internal audit effectiveness. All of these five independent variables are making 58.7% of the contributions for internal audit effectiveness in Ethiopian Roads Authority. Ethiopian roads Authority 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 IAE in the public sector offices. The study is significant for academicians as it helps to improve the understanding of factors influencing internal audit effectiveness. Additionally, managers can use the finding of the study to solve the practical problems facing the internal audit effectiveness specifically in Ethiopian roads authority. Key Words