Federal organizations are fully or partially financed by the government, so their budget mustrnbe controlled and examined if they are used their budget effectively and efficiently. This isrndone by internal auditors assigned by Ministry of Finance and Economic Development forrneach federal organization. This research was tried to assess the perceptions of managementrnand staffs about an internal audit in federal organizations. This research used descriptivernresearch design, qualitative research approach and a questionnaire as data collectionrnmethod in order to achieve its objectives. In order to answer the research question, 100rnrelevant questionnaires were developed and distributed to selected participants in the surveyrnand 76 were received giving a response rate 76 %. The study population was managementrnand staff members of finance, human resource and procurement department of 124 federalrnorganizations. This study used random sampling technique to select federal organizationsrnand staff members in the purposively selected departments. The sample size of this study wasrn10 top management and 90 finance, human resource and procurement staffs in 10 selectedrnfederal organizations. The study used primary data collected from well-structuredrnquestionnaires and collected from each sampled organizations. The researcher analysed therncollected data using descriptive statistics and presented the data in terms of percentage,rnmean, standard deviation, frequency distribution and tables. Based on the findings of thisrnstudy, the management and staffs agreed on the independency, competency, and objectivity ofrnan internal audit. The study recommended internal auditors must be independent, competentrnand objective in order to be perceived positively by the management and staffs