Assessment Of Effective Internal Audit Practice The Case Of Local Construction Companies In Addis Ababa

The purpose of the study was to investigate determinants of internal auditing effectiveness inrnselected private construction companies. It was delimited to Yotek, Sunshine, Yencomad and SurrnConstruction Companies. descriptive research design was employed to conduct the study. Bothrnrandom and non-random sampling techniques were used to select sample respondents out of therntarget population. With these techniques, the companies’ executives, department heads, internalrnauditors and administration personnel of the companies were selected. The total sample size ofrnthe study was 72. Primary and secondary source of data were used in the study. Data for thernstudy was collected by making use of questionnaire, interview and document analysis. Bothrnqualitative and quantitative methods of data analysis were employed to analyze the data. Asrnthe result, the study concludes that the major qualities of the companies auditing to bernindependence of auditors and they conducted the audits objectively as well as the audits werernconducted in line with the working laws and in ways that conform to the established policies,rnregulations and procedures. It also concludes that the audits were effective in the fact that itrnenabled the companies meet their objectives and goals, as well as enabled them monitor theirrnmajor business activities, transactions and inventories, and maintained safe and efficient cashrnhandling. The key role players to the effectiveness of the audits performed in the companies werern6rnthe audit staffs and top managements. The presence of quality internal audits and the auditors’rncompetence in performing the audits were factors that contributed to the auditing effectiveness.rnThe presence of moderately effective internal auditing had brought about positive impacts to therncompanies. The major impacts include that it helped the companies improve their operations, therneffectiveness of risk management and examine the extent to which financial and materialrnresources were effectively utilized. Moreover, the study concludes that absence of regular followrnups by audit staff and failure to give immediate responses towards audit findings by toprnmanagement and the fact that audit reviews not conducted on due time were the major problemsrnobserved in the companies. As the result, it recommends that in order to enhance therneffectiveness of internal audit functions, companies need to work to have quality internal auditsrnwhich cover all aspects organizational issues. Besides, business firms need to establishrnappropriate organizational culture which is helpful to accomplish its objectives by bringing arnsystemic, disciplined approach to improve the effectiveness of risk management, control andrngovernance process. For the maintenance of a sound and effective auditing, top managementrnneed to cooperate and provide supports to the firm’s internal auditors in different aspects theyrnmay find to be helpful to conduct their auditing activities. Moreover, they need to support thernauditors by providing trainings so that they would update and improve their skills, as well asrnintroduce themselves with new technologies of the time.

Get Full Work

Report copyright infringement or plagiarism