Unity University

Department of Accounting and Finance

A Proposal on An assessment of internal auditing practices of Lion bank

Submitted to:- instructor Jemal

Group member ID
1. Abenezer Nardiyas UU86119R
2. Abraham Dereje UU86093R
3. Abrham Fikru UU88052R
4. Birhanemeskel Zebene UU86419R
5. Jamal Hopkins UU84666R
6. Mesay Getahun UU86350R
7. Noel G/Hiwot UU86808R
8. Yohannes Getu UU86504R

Date:- Nov 20, 2023 G.C

Addis Ababa, Ethiopia
TABLE OF CONTENTS
1.1. Background of the study ………………………………………………1
1.2. Statement of the problem ……………………………………………...1
1.3. Objective of the study …………………………………………………2
1.3.1. General objectives …………………………………………………...2
1.3.2. Specific objectives …………………………………………………...2
1.4. Research Questions …………………………………………………….2
1.5. Research hypothesis ……………………………………………………2
1.6. Scope/Delimitation of the study ………………………………………..3
1.7. Research Methodology/design………………………………………….3
1.7.1. Types of research design ……………………………………………..3
1.7.2. Population of interest …………………………………………………3
1.7.3. Sampling techniques & sample size ………………………………….3
1.7.4. Data collection instruments (sources of data) ………………………...3
1.7.5. Data analysis procedures ……………………………………………...4
1.8. Significance/Importance of the study …………………………………...4
1.9. Definition of terms ………………………………………………………4
1.10. Research ethics………………………………………………………….4
1.11. Organization of the Paper ………………………………………………5
1.12. References ……………………………………………………………...6

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Abstract

This study was conducted to asses internal auditing practices in Lion bank. Auditing is the
systematic process by which a competent independent person accumulates and evaluates
evidence about quantifiable information. The internal audit is continuous review of operations
and records taken with in the business and is normally done by specially assigned staff. Internal
auditing help an organization accomplish its objectives by brining a systematic discipline to
evaluate and improve the efficiencies of risk management control and governance process. The
study sought to test and determine the assessment of internal auditing practices in Lion bank.
Internal auditors conduct compliance and fraud audits to ensure proper internal control systems
and efficient enterprise operation. Because of time and cost limitation the research is enforced to
limit the study area in assessing internal auditing practice of Lion Bank.

Key words:- internal audit, internal control, financial audits, principle of audit

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 1.1. Background of the study
The internal control process is a method for reducing instance for fraud, misappropriation and
errors. It has recently become more extensive addressing all the various activities faced by the
organizations it is now recognized that internal control process in critical to organization ability
to meet is goals and objectives and to maintain its financial capability. Company’s internal
control consists of the policies and procedures established to provide reasonable assurance that
specific objective of the company will be achieve. Internal Audit practice in the examination of
accounts a business concern by it employees specially appointed for the purpose.

When the properly designed and consistently enforced a good system of internal audit will help
management safeguard the organization resources, product reliable financial reports and comply
with laws as regulations. It will also reduce the possibility of significant errors and irregularities.
Proper internal auditing practice is the base for freeing the stability of Any Company. The study
focuses a describing and analyzing the important control directions that will be related to internal
auditing practice.

1.2. Statement of the problem

Internal auditing composes the examination and evaluation of the adequacy and effectiveness of
the organization system of internal control and qualities of performance in carrying out assigned
responsibilities internal auditing is a service function established with in the organization to
examine and evaluate its activities. Internal auditing may focus on financial audits. Compliance
audit, fraud audit, internal auditors usually assist management in ensuring that there is proper
internal control system in place and the operation of the enterprise (organization) is operated in
effective and efficient manner. It is clear that in adequate internal control can expose the
organization to various problems. Primarily, absence of internal auditing in the organization will
result in lack of continuous assurance services. Secondly, the degree of independence of internal
auditor since they are employee of the organization so it is the related problem will be executing.

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 1.3 Objective of the study

The objective of the study is classified into general objective and specific objective

1.3.1 General Objective

The general objective of this study would be to assess internal auditing practice in Lion bank in
Saris Branch.

1.3.2 Specific objective

 To assess the application of internal auditing practice.
 To identify the principle of auditing that applied in the bank
 To assess factors that affect internal auditing practice in Lion Bank Saris Branch.
 To identify the major draw back of internal auditing in Lion bank Saris Branch.
 To compare and contrast the theoretical aspect of internal auditing practice to the actual
practice.
 To forward the possible solution based on the study.

1.4 Research Questions

 Does the bank have internal auditing practice?
 Does the principle of internal auditing applied in the organization?
 What factors affecting internal auditing practice Lion Bank on Saris Branch?
 What are the major draws back of Auditing practice in Lion Bank Saris Branch?

1.5 Research Hypothesis

 There is a positive relationship between the implementation of effective internal auditing
practices and the overall financial performance of the organization.

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 1.6 Scope of the study

Because of time and cost limitation the research is enforced to limit the study area in assessing
internal auditing practice of Lion Bank. This study mainly focused to identify factors which
affect the internal auditing practice, the challenges, and the strategies uses to alleviate the
problems in the bank.

1.7. Research Methodology

1.7.1 Research design

The Research will be designed to evaluate the problem of Internal auditing practice in Lion Bank
Saris branch. The study will be expected at 4 weeks it compulsory for researcher went to the area
to collect information required to answer the major problem in Internal auditing practice.

1.7.2 Population of Interest

The Research conducted will be used type of data collected is Quantitative because the data is
mathematics or statically analysis.

1.7.3 Sampling techniques

The Research will be select the sample techniques is used non-probabilistic judgmental sampling
which is based on the researcher judgment to select the sample technique. The questionnaires
distributed for these employees and the researcher also interviewed the manager.

1.7.4 Data Collection Instruments

 The data collection method is used both primary and secondary sources.
 To collect primary data is use structure questionnaires and interview.
 To collect secondary data different documents from different sources is website,
magazine, journals, reports etc.

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 1.7.5 Data Analysis Procedures

The data collection through the questionnaires and interview were organized and analyzed. Then
tabulate in the form of tables and interpretation and conclusion and recommendation.

1.8 Significance of the study

The major benefits of this study will be the following.
 It will enable the manager to sensitive the importance and use of internal audit in
achieving intended objectives.
 It will make possible the auditor in the bank know application of internal auditing
principles.
 I will be used as an additional reference to the existing literatures and can also be used as
spring boards for other researcher who wish to conduct a research in the same area.

1.9 Definition of terms

Internal Audit: - is an independent, objective assurance and consulting activity designed
to add value and improve an organization’s operation.
Internal Control: - is a process, affected by an entity’s board of directors, management
and other personnel, designed to provide reasonable assurance.
Financial Audit: - is a thorough, detailed examination of a company’s financial
statements and accounts.
Principle of Audit: - is a presentation of audit theory and practice.

1.10 Research ethics

 we should obtain informed consent from participants before conducting any
assessments or collecting data.
 We must ensure the data collected from Lion bank about internal auditing practices
is kept confidential and is not disclosed to unauthorized individuals.
 We should strive to maintain objectivity in their assessments and avoid any conflict
of interest that could bias the result.
 We should accurately and transparently report their findings
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 1.11 Organization of the Paper

The organizational of the paper consist of Background of the study, statement of the problem,
research questions, objective of the study, significances of the study, scope of the study,
Research Design and methodology, limitation of the study, organization of the Paper, literature
review methodology, data analysis, interrelation, on summary, conclusion and recommendation.

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 1.12 Reference
 Auditing handout
 Arens, Alvin A. (1997), Auditing: An Integrated Approach
 Ann Swayey (1992), Internal auditing, 14th edition
 Kamal Gupta and Ashok Arora (1996): Fundamentals of Auditing
 Ratliff and Reding (2002): Introduction to Auditing
 Mihret and w/yohannis (2008), Value added role of internal audit, Ethiopia case study
managerial audit 7th edition