Determinants of Internal Auditor's Effectiveness: Case of Ethiopian Public Sectors

Abstract

The main objective of this study is to investigate determinants of internal auditors' effectiveness in Ethiopian public sectors. Public sectors are established with the aim of providing basic public services effectively and efficiently to the whole society. The efficiency and effectiveness of management operations in public sectors, on the other hand, are ensured by the effectiveness of their employees. Internal auditors, the focus of this study and one key employee of public offices, are supposed to work independently and objectively to improve an organization's operations and services quality. Despite of their roles in public sectors, internal auditors have gained less credit from their management that doubts the effectiveness of internal auditors. To investigate determinants of internal auditors' effectiveness in public sectors, primary data was collected from managers and internal auditors by administrating Likert-Scale type questionnaire in 30 public sectors. The Ordinary Least Square (OLS) linear regression model was used to analysis the collected data. The findings of the study revealed that organizational independence of internal auditors was the most dominate determinant of internal auditors' effectiveness with positive significant effect. The presence of internal audit charter in public sectors has also positive effect on internal auditors' effectiveness. Thus, the management of public sectors should work aggressively on the means of assuring organizational independence of internal auditors and the presence of internal audit charter in each sector.

Keywords: Internal auditors' effectiveness, Public sectors, Ethiopia and Organizational independency.