The main objective of this research was to investigate challenges facing the internal auditrnfunction that influence the oromia public Enterprises to tail their internal audit activities. Thernresearch was conducted on nine public Enterprises at head office level. Twenty internal auditorsrnwere used as data source who were selected using convenience sampling techniques. To obtainrnthe required information open- ended and closed ended questionnaires was used as datarngathering tools. Then quantitative and qualitative approaches were employed to analyze andrninterpret the filled in data. The findings related to challenges delaying adequacy of internalrnauditing revealed lack of independence, inadequacy of internal control system, inadequate skillsrnamong internal auditors, inadequate facilities at the internal audit department, inadequate fundsrnto carry out internal audit, inadequate cooperation among role players, external auditorsrnreluctance on works of internal audit, the lack of an audit action monitoring processes,rninadequacy on segregation and appointments of duties as well as lack of commitment fromrnmanagement staffs were critical factors influencing internal audit functions of the respectivernpublic enterprises. To alleviate those problems, it is recommended that management, audit committeernand the audit process owner of the respective public enterprises has to work jointly to improve the IAF ofrntheir respective public enterprises as per rules, regulations and requirements of international standards