AshEse Journal of Economics
Vol. 1(1), pp. 001-012, March, 2015
© 2015 AshEse Visionary Limited
Full Length Research
Internal audit function and its challenges in public sector governance: Empirical evidence from Amhara National Regional State, Ethiopia
Agumas Alamirew Mebratu
Received 23 January, 2015; Accepted 23 March, 2015
The purpose of this study is to examine the role of internal audit function in public sector governance and challenges that have an effect on this function in the case of Amhara National Regional State public sector, Ethiopia. Based on structured questionnaire survey of all internal audit directors and staff from 35 public sector bureau of Amhara National Regional State, a total of 61 internal auditors was used. To analyzed the data, OLS multiple regression statistical method was employed. OLS regression analysis results show that risk management role of internal audit function is positively related to compliance with professional audit standards, unrestricted access, formal mandate, top management support and competent leadership, and negatively related to organizational independence, competent staff and sufficient funding. The finding reveals that competent staff, compliance with professional audit standards and sufficient funding is positively related with the control function of internal audit. The regression results also suggest that governance process role of internal audit function is positively related to competent staff and compliance with professional audit standards and negatively related to top management support, formal mandate and unrestricted access. The regional level results provided by this study cannot be regarded as generally applicable or generalizable throughout the country or in different economic situations. This study attempts to contribute firstly, empirically testing the extent of association of role of internal audit function in public sector(that is risk management, control and governance processes) with its factors ( that is organizational independence, formal mandate, unrestricted access, sufficient funding, competent leadership, competent staff, management support and compliance with professional audit standards). Role of internal audit function in public sector and its factors that have an effect mentioned in this study apparently thus far, have been rarely empirically examined.
Key words: Internal auditing, role of internal audit function, public sector governance, Ethiopia.