| Abstract: | Internal Audit activity plays a crucial role within an organization. Internal Audit activity helped an organization by evaluating the risks whether they are under control or worth taking. The purpose of this paper is to try and strengthen the idea behind the assessment of determinate factors of internal audit effectiveness in Ethiopia’s private sectors with the exception of Bank and insurance companies and based it on 146 members of IIA Ethiopia that work in different sectors of the private sector industry that operate in the area of manufacturing, service providing, Agro industry and merchandising business sectors and based it on the opinion of the internal audit department staff and issued 146 self-administered questionnaires. These questionnaires were constructed in 5-point likert scale. this the study used Explanatory method of design and used primary data collection method of questionnaire and secondary method of data collection such as document reviews by using mixed research method by employing quantitative and qualitative research methods. The collected quantitative data was analyzed using SPSS statistical software and the qualitative research method used documents review. To check for reliability of the data collected and association of the Internal Audit Effectiveness and the study variables the correlation was measured. According to the results of the study: it showed that the respondents agree with moderate presence of competency, independence and audit quality in the private sector industry however, that there is lack of sufficient Management support given to Internal audit department by Top Management. But the document review also reviled that the lack of Audit charter which affects its independence of the Audit team, narrow scope of audit approach which shows low level of competency, unstandardized working paper and no Internal audit strategic plane also affect the Audit work quality of internal audit effectiveness of Private sector industries in Addis Ababa. Accordingly, the study recommended Top management should provide regular support to internal audit to effectively utilize the department, the departments should have proper Audit charter, Audit manual and Strategic plan. Additionally, private sector industries need to ensuring the effective functioning and changing the audit approach of Audit committee in line with current global market environment to gain the benefit on advancement of internal audit standards. |
