ASSESSMENT OF INTERNAL AUDIT PRACTICE: A CASESTUDY ON ETHIOPIAN INSURANCE CORPORATION

Abstract

Internal Audit has an important role in assisting a firm to achieve its objective when it is implemented, operated, and managed effectively. Organizations that effectively implemented, operated, and managed Internal Auditing were better able to identify their business risks and system inefficiencies for the sake of taking corrective actions and improvement in the process. The overall objective of the study is to assess the Internal Audit Practices of Ethiopian Insurance Corporation. The study adopted a case study design and covered the head office Internal Auditors of Ethiopian Insurance Corporation. The study adopted a mixed research method by employing quantitative and qualitative research methods. The quantitative research method was used through 29 usable self-administered questions. These were constructed in a 5-point Likert scale, distributed to Internal Auditors of Ethiopian Insurance Corporation, and analyzed using Statistical Package for Social Science (SPSS) Version 20 software. The qualitative research method was used through the interview with the Internal Audit director of Ethiopian Insurance Corporation and selected documents review. In this regard, Internal Audit Quality, Organizational Setting, Approved Audit Charter, Management Support, and Resource Availability were the variables in use for assessing the practice of Internal Audit in EIC. According to the results of the study; the quality of Internal Audit is as per the International Audit Standards. Ethiopian Insurance Corporation has an approved Internal Audit charter and it is reviewed regularly as required. The researcher mainly recommended; the EIC management shall revise its organizational structure so that the Internal Audit Department reports to the Board of Directors, the management of the EIC shall give serious attention to give adequate training to the internal audit staff, for better audit coverage and better assurance of control, risk management and good governance, the adequate number of staff shall be fulfilled for the Internal Audit department.