INTRODUCTION

The regulatory framework for internal auditors in Ethiopia, specifically the administration of
internal auditors of the federal government, is guided by Guide No. 47/2016. This guide outlines
the rules, regulations, and standards that govern the practice of internal auditing within the
federal government of Ethiopia.

One of the key objectives of the regulatory framework is to enhance accountability,

transparency, and good governance within the federal government. Internal auditors are tasked
with evaluating and improving the effectiveness of risk management, control, and governance
processes. They play a crucial role in identifying and mitigating risks, detecting fraud, ensuring
compliance with laws and regulations, and enhancing the efficiency and effectiveness of
operations.

STRENGTH

The framework focuses on ensuring the independence of internal auditors when

performing their professional duties. This emphasis on independence strengthens the
credibility and objectivity of the internal audit function within federal government
offices.
The framework establishes clear lines of administrative accountability for the internal
audit department of public offices. Being accountable to the Ministry ensures oversight
and support from a higher authority, promoting transparency and effective governance.
The Minister is responsible for preparing the internal audit organization and allocating
resources to public offices based on factors such as budget allocation, property
management, and scope of work. This strategic resource allocation ensures that internal
audit functions receive appropriate support and resources, enhancing their effectiveness.
By assigning the duties and responsibilities of internal audit heads, the Minister provides
centralized oversight and control over the internal audit function within the federal
government. This centralized approach helps ensure consistency, coordination, and
adherence to the established guidelines and standards.
The Minister ensures that applicants for internal auditor positions in public offices
possess the required professional qualifications. This assessment helps maintain the
competency and expertise of internal auditors, ensuring they have the necessary
knowledge and skills to perform their duties effectively.
The Minister plays a role in resolving disagreements between the internal audit
department and the public body. This involvement promotes effective communication,
collaboration, and resolution of conflicts, ensuring the smooth functioning of the internal
audit function.
The Minister is responsible for developing, modifying, and monitoring the policies,
standards, and procedures of internal audit for public bodies. This ensures that internal
audit functions operate in accordance with established guidelines, promoting consistency,
and adherence to best practices.
The Minister maintains internal audit staff records and special information using modern
information technology. This allows for efficient record-keeping, easy access to
personnel information, and effective management of human resources within the internal
audit department
The Minister's responsibility to investigate complaints and discipline issues demonstrates
a commitment to accountability and fairness within the internal audit function. This
ensures that any alleged misconduct or disciplinary matters are addressed in a transparent
and impartial manner.
The Ministry ensures that internal audit staff receive the same benefits as other staff
members within the institution. This promotes fairness, equality, and a sense of
inclusiveness among employees.
The Internal Audit Department prepares its budgeting needs and provides them to the
office. This ensures that the department has the necessary resources to carry out its audit
activities effectively and efficiently.
The department follows a structured planning process outlined in the Federal
Government Internal Audit Directive. This ensures that audit activities are well-
organized, aligned with organizational objectives, and prioritized based on risk
assessment.
The employment of internal audit staff in public offices is conducted in accordance with
the guidelines set by the Federal Ministry of Public Service and Human Resource
Development. This ensures that the recruitment process follows established standards and
promotes fairness and transparency.
In cases where there is a need for hiring internal auditors in a specific public office, the
Ministry may delegate the recruitment procedures to that office. However, the final
approval for the recruitment decisions still rests with the Ministry. This balance of
delegation and oversight helps to streamline the recruitment process while maintaining
control and compliance with guidelines.
The level of promotion of internal audit staff in public offices is conducted in accordance
with the guidelines set by the Federal Ministry of Public Service and Human Resource
Development. This ensures that promotions are based on standardized criteria and
promote fairness and transparency.
The process of granting annual leave and permissions for internal audit department staff
is conducted in accordance with the Federal Civil Servants Proclamation. This ensures
adherence to the legal framework and established regulations.
Staff performance assessment is based on pre-agreed goals, comparing planning and
implementation, and measuring performance or outcomes. This indicates a structured
approach to evaluating performance and aligning it with established objectives.
WEAKNES

Like any regulatory framework, the effective implementation of the guide may face
challenges. These challenges could include resistance to change, lack of resources,
varying levels of understanding and commitment, and difficulties in monitoring
compliance across all federal government offices.
The framework does not explicitly mention external oversight mechanisms, such as
independent audit oversight bodies or external auditors. Including external oversight
measures can provide additional assurance and accountability for the internal audit
functions..
The Minister's authority to assign and dismiss internal audit heads and professionals may
raise concerns about potential political influence or interference in the appointment
process. Ensuring that appointments are based on merit and independence is crucial to
maintaining the integrity of the internal audit function.
The responsibility of the Minister in hiring, ranking, and managing internal audit staff
may raise concerns about potential biases or favoritism in the decision-making process.
Ensuring transparency, accountability, and adherence to merit-based principles is
essential to mitigate such risks.
The framework does not mention the regular evaluation of training programs' impact on
public offices. Conducting systematic evaluations can help identify areas of improvement
and ensure that training efforts align with organizational objectives.
The framework does not explicitly mention providing professional development
opportunities or career advancement pathways for internal audit staff. Supporting their
growth and development can enhance their capabilities and job satisfaction.
Without specific information on the content of the Federal Government Internal Audit
Directive No. 7/2010, it is challenging to identify potential weaknesses or areas that
require improvement in the department's duties and responsibilities.
The framework does not provide specific details about the criteria used to evaluate and
compare candidates for promotion. Clear and well-defined criteria are essential to ensure
fairness and transparency in the promotion process.
The internal audit performance plan is developed in accordance with the company's
strategic goals or the goals of critical business processes. This ensures that the internal
audit function contributes to the overall objectives of the organization and focuses on
areas of high importance.

SUMMERY
In summary, the regulatory framework, as outlined in Guide No. 47/2016, establishes the
guidelines and standards for the administration of internal auditors in the federal
government of Ethiopia. It aims to improve accountability, transparency, and governance
by ensuring that internal auditors operate with integrity, independence, and
professionalism.
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