ODA BULTUM UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

EVALUATIONs OF INTERNAL AUDITING PRACTICE (CASE On AWASH

BANK In BEDESSA BRANCH.)
RESEARCH PROPOSAL SUBMITED IN PARTIAL FULFILMENT OF
REQUIREMENT FOR BA DEGREE IN ACCOUNTING.
SUBMITTED BY.
ANTENEH TILAHUN.ID:No:0833/09
ADVISOR:BELEY.M.(MA)

MAY;-2019

CHIRO,ETHIOPIA

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Acronyms

AAU Addis Abeba University

FBE Financial Bussiness Economics

GAAP General Accepting Accounting Principle

SAP Statement on Auditing Practic

IIA Institute of Internal Auditors

IPPF International Professional Practices Framework

IAF Internal Audit Function

CAE Chief Audit Executive

IAA Internal Audit Activities

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Table of Contents
Acronym......................................................................................................................................... I
CHAPTER ONE................................................................................................................................ 1
INTRODUCTIONS............................................................................................................................1
1.1.Background of the study..........................................................................................................1
1.2.Background of the organization...............................................................................................2
1.3.Statement of the problem.......................................................................................................2
1.4 Research Question..................................................................................................................3
1.5 Objective of the study............................................................................................................4
1.5.1 General Objective...............................................................................................................4
1.5.2 Specific objective................................................................................................................ 4
1.6 Significance of the study....................................................................................................... 4
1.7 Scope of the study................................................................................................................. 4
1.8 Organization of the paper......................................................................................................5
CHAPTER TWO............................................................................................................................... 5
REVIEW OF RELATED LITERATURE................................................................................................. 5
2.1. Definition and Nature of internal Audit Activity..................................................................5
2.2.Evaluation of Auditing..............................................................................................................6
2.3.Definition of internal Auditor...................................................................................................7
2.4.Objective of internal Auditing..................................................................................................7
2.5.Effect of internal auditor’s work on the audit..........................................................................8
2.6.Professional Qualification to perform independent Audits.....................................................8
2.6.1.Importance of the Auditors independence...........................................................................9
2.6.2.Integrity and Objectivity....................................................................................................... 9
2.6.3.Due professional care......................................................................................................... 10
2.7.Internal Control..................................................................................................................... 10
2.7.1.Objective of Internal control...............................................................................................11
2.7.2.Internal control Documentation.........................................................................................11
2.7.3.Limitation of internal Control............................................................................................. 11

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2.8.Audit practice in Relation to Internal Control........................................................................12
2.9.Elements of internal Control..................................................................................................12
2.9.1.Control Environment.......................................................................................................... 13
2.9.2.Risk Assessment..................................................................................................................13
2.9.3.Control Activities.................................................................................................................14
2.9.4.Information and Communication........................................................................................14
2.9.5.Monitoring.......................................................................................................................... 14
2.10 Empirical study ……………………………………………………………………………………………………………………………..15

2.11 The Research Gap…………………………………………………………………………………………………………………………16

Chapter Three.............................................................................................................................. 17
3. Methodology........................................................................................................................... 18
3.1. The research Approch..........................................................................................................18
3.2. Source of data.......................................................................................................................18
3.3 Methods of Data Collection.................................................................................................. 18
3.4 Population size and sample Technique..................................................................................19
3.5 Sampling techniques.............................................................................................................19
3.6 Data Analysis........................................................................................................................20
CHAPTER FOUR............................................................................................................................ 21
4. BUDGET AND TIME SCHEDULE……………………………………………………………………………………………..21

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CHAPTER ONE

INTRODUCTIONS

1.1.Background of the study

The internal Audit Practice is process of mechanism of reducing unimportance
activity for 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
viability. Company’s internal control consists of the policies and procedures
established to provided reasonable assurance that specific objective of the
company will be achieve. Internal Audit practice in the examination of accounts
a business concern by its 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 free serving the stability of ay
company. The study focusses a describing and analyzing the important control
directions that will be related to internal auditing practice. In regard to see the
existing and applicability of attributer and the standards in Awash bank
Bedessa branch performance to increase the quality of audit work raising
awareness of the role and significance of internal auditing to the achievement
of specific objectives.

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1.2.Background of the organization
The bank of Awash in Bedessa branch was established in the year September
20 2003 G.C. The bank has been four hundred eight six(486)
shareholderscapital 24.2 birr million during the starting period and now there
are above thousands shareholders and current capital of Awash bank is above
Birr 4.4 billion.Awash bank were create job opportunity for above 30 employees
in all over the country and above 20 employees in Bedessa branch currently
the bank of Awash is a good player of effective activities and sufficient banking
service in the country by facilitating customer deposit and credit for customer.
The bank has the following general objectives.
To meet the needs of the emerging private sector for quality and dependable
domestic and international banking services;
To expand and diversify commercial banking services in response to the
growing demands of customers; and
To contribute towards the economic and social development of the country and
to operate profitably in a sustainable manner.

1.3.Statement of the problem

Internal auditing decomposes 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 within 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. Therefore, according to the above information, the study was come
up with some solution to the problem identified before.
Those problems identified and are assumed to be the major causes of internal
auditing are:

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 1. Absence of internal auditing in the organization will result in lack of
continuous assurance services.
2. The degree of independence of internal auditor since they are employee of
the organization so it is the related problem will be existing.

1.4 Research Question

After General Accepting Accounting Principle(GAAP) completing the study the
following basic research question will be get answers.

1. Does the bank have internal auditing practice In Awash Bank Bedessa
branch?
2. Does the principle of internal auditing apply in the Awash bank bedessa
branch?
3. What factors affecting internal auditing practice of Awash Bank of
bedessa branch.
4. What are the major drawback of Auditing practice of Awash Bank
bedessa Branch.

1.5 Objective of the study

1.5.1 General Objective

The general objective of this study would be to evaluate internal auditing
practice of Awash bank in bedessa branch.

1.5.2 Specific objective

1. To investigate the internal auditing practice in Awash Bank Bedessa
branch.
2. To identify the principle of auditing that applied in the Awash bank
Bedessa branch.
3. To assess factors that affect internal auditing practice of Awash Bank
Bedessa branch.

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 4. To identify the major drawback of internal auditing in Awash bank
bedessa branch.

1.6 Significance of the study

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

1.7 Scope of the study

The study area in assessing internal auditing practice of Awash bank Bedessa
branch. This study mainly focused on the manual report which represented to
identify factors which affect the internal auditing practice, the challenges, and
the strategies uses to alleviate the problems in the bank and also use the data
of four consecutive years(2006-2010)

1.9 Organization of the paper

This study divided in to five chapters. Chapter one is the introduction part.
Chapter two presents a review of literature; Chapter three introduces the
research methodology. Chapter four is data representation and the last chapter
contains conclusion and recommendation.

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CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1. Definition and Nature of internal Audit Activity

Internal Auditing is the process by which a competent independent person
accumulates and evaluates evidence about financial information related to
specific economic entity for the purpose of determining and reporting on the
degree of correspondence between the financial information and established
criteria. (Kamal.2000)
Internal Auditing was a process through which frauds and error discovered.
There were a few who through that auditing was concerned with checking with
their accounting records and bad been kept properly and up to date and that is
only created problems for efficient managers who might not have bothered to
keep their records up to date. The auditor examines the information under
audit and express his opinion on the same by way of written report.
(Kamal.2000)
Internal auditor activity. A department division consultant or the practitioner
that provides in dependent objective assurance and consulting services
designed to add value and improve an organizations operation. The internal
audit activity helps an organization to accomplished its objectives by bringing a
systematic disciplined approach to evaluate and improve the effectiveness risk
management control and governance processes. (kamal .2000)
The internal auditing activities evaluates the adequacy and effectiveness of
controls encompassing the organizations governance operations and internal
system. Internal audit reviews include the reliability and integrity of financial
and operational information, effectiveness and efficiency of operations,
safeguarding of assets and compliance with laws regulations and contracts.
These reviews also a creation the extent to which operating and program goals
and objectives have been established and conform to those of the organization,
as well as the extent of which results are constant with established goals and

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objectives and whether operations and programs are being implanted or
performed as intended. (Konrath, 2002)

2.2.Evaluation of Auditing
The presents status of the auditor’s report and independent auditing
represents the culmination of a century of development. Initially audits were
performed mostly at the request of business owners who wished assurance
that their book keeping had been accurately handled and that all cash was
properly accounted for. With the development of partnership. Audit also
become useful in. The industrial revolution brought with large scale enterprises
that needed outside financing to supplement owner’s capital. In other to prim it
aquestion of costly machines that had become available. It at this point, of
course, that the independent audit come and that third parties displaced
business owners at the principal beneficiaries of auditing services.
(Fabozzi2005)
On management that might otherwise find it expedient to endeavor to deceive
third party users by preparation of misleading financial statement. Audit
effectiveness also extends beyond the immediate statements that have been
examined to both un audited quarterly reports and pronouncements about
future expectations when it is known that the figures will ultimately have to
integrate with audited figures. (Fabozzi, 2005)

2.3.Definition of internal Auditor

The internal audit is continuous review of operations and records taken with
in the business and is normally done by specially assigned staff. It should
operate independently of all the internal check and no care should divest any
one of the responsibilities placed up on him.
The institute of internal auditors, USA had defined internal audit as follows.
Internal auditing is an independent appraise activity within an organization for
the review of operations at a service to management. This a managerial control
which functions by measuring and evaluating the effectiveness of other
controls. (Arens2001)
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2.4.Objective of internal Auditing
The objective of internal Auditing is to assist all members of management in
the effective discharge of their responsibilities, by furnishing them with
analysis appraisals, recommendations, and pertinent comments concerning the
activities reviewed. The internal auditor is concerned with any phase of
business activity. This involves going beyond the accounting and financial
records to obtain a full understanding of the operations under review.
(Johannes FBE, AAU)

Reviewing and appraising the soundness, adequacy and application of

accounting, financial and other operating controls and promoting effective
control of reasonable cost.Ascertaining the external of compliance with
established policies plan and procedures. Ascertaining the reliability of
management data developed within the organization.Appraising the quality of
performance in carrying out assigned responsibilities. Recommending
organizational 9functional0 units to improve their operation.

As a convenient summary of these objectives it might be stated that the

internal auditor is primarily concerned with evaluation compliance and
verification of operational performance. (Leksherkhar, 2003)

2.5.Effect of internal auditor’s work on the audit

Internal auditor work may affect the nature time and extent of the audit
including.Procedures the auditors perform when obtaining an understanding of
the entity’s internal control.

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The auditor obtains a sufficient understanding of the design of control relevant
to the audit of financial statements to skin the audit and to determine whether
they have been placed in operation. Since a primary objective of many internal
audit functions is to review assess, and monitor internal controls, the
procedures performed by the internal auditors in this area may provide useful
information to the auditor. (sherkar2006)

2.6.Professional Qualification to perform independent Audits

In view of the reliance by third parties on the work of auditors engaged in
performing the attest function. It is understandable that there would be
concern for the professional qualification of the public accountants who do this
work. Because in some states anyone who wishes may assume the designation
public accountants such a designation gives an indication that the person
qualified to render competent service to the public. (Howard 2008)

2.6.1.Importance of the Auditors independence

In addition to possessing adequate training and professional experience the
accountant who makes an audit for the purpose of attesting to the fairness of a
client financial statement must act in an independent capacity. Because the
accountants is an employee of the business the accountant’s action are not
subject to supervision by the management of the business and this situation
alone creates considerable independence. Independence is also an attitude of
mind and independent though and action are equally as important as the
independent relationship between accountant and client. Unless the
accountant is independent the opinion expressed is no more reliable than the
statement which have been prepared by management. (Arens2001)

2.6.2.Integrity and Objectivity

Integrity and objectivity are per-eminent qualities expressed in all auditors. An
auditor should be straight forward, hones and sincere in this approach to
professional work. An auditor must be fair and should not allow prejudice or
bias to override this objectivity. He should ensure that he is maintaining an

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important attitude he is reporting and the financial statement which are
subjected to his examination. He should both be and appear to be independent
of any interest which might be regarded whatever its actual effect as being in
compatible with integrity and objectivity. In other words, an accountant who is
practicing auditing profession should be and seen to be independent in each
professional assignment he under takes of any interest which might detract
him from objectivity.
(Leksherkhar. 2003)

2.6.3.Due professional care

This standard requires the auditors to carry out every step of the audit
engagement in an alert and diligent manner full compliance with this standard
with standard would rule out any negligent acts or material omissions by the
auditor of course auditors as well as members of other professions inevitably
make occasional errors in judgment but this human element does not justify in
difference or in judgment or intention to professional responsibilities.
(Raywhittingtion2007)

2.7.Internal Control
Spicer and Peglartomes authors in auditing literature define the system of
internal control as internal control is best regard as the whole system of
control. Financial and other wise established by the management in the
conduct of a business including internal cheek internal audit and other forms
of control.
This definition implies the following

The internal control is the system of controls is established over financial and
non-financial areas. The mechanism of controls may manifest itself in the
farms to internal cheek or internal audit or other forms.

The statement on auditing practice (SAP) of the institute of chartered

accountants of India describes internal control or “the plan of organization and

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all the methods and procedures adopted by the management of an entity to
assist in achieving managements objective of ensuring, asfaras possible, the
orderly and efficient conduct of its business including adherence to
management policies, the safeguard of the assets prevention and defection of
Froud and error, the accuracy and completeness of the accounting records and
timely preparation of reliable financial information. The system of internal
control extends beyond those maters which relate to functional of accounting
system. (Tandon 2005)

2.7.1.Objective of Internal control

Internal control comprises all the method followed by an organization and there
by:Ensures efficient conduct of the business operations and prevents wastage
of resources by dishonest employees of the organization. Minimizes occurrence
of fraud and error or irregularity if not completely eliminated. Protect its assets
of against improper disbursement. Assures the high degree of accuracy and
dependability of all the financial and operating information. Improves operating
efficiency and high lights weaknesses. Above all measures the adherence to
established polices of the company. (Ravinder 2001)

2.7.2.Internal control Documentation

Whenever the intendent auditors on the word carried out by the internal audit
department the same should be properly document along with the reason
supporting the secession. Such documentation should include the examination
and assessment on the quality of the internal audit personal the defer of their
independence the objectivity with which work is performed the scope of the
internal audit function and also the details of any specific tests of transactions
balances or working paper besides the extent of the internal audit work to
which the independent has relied and the conclusions arrived at should be
documented. (Lekshmy2000)

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2.7.3.Limitation of internal Control
The existence of internal control system in any entity provides good clues that
aims of internal control, vit adherence to policy, safeguarding of assets,
detection and prevention of error (frauds) reliability and completeness of
accounting data might be achieve. One must not forget that clues that they are
and not assertion guaranteeing the fulfillment of control objectives essentially,
there are certain inherent, limitations attached to internal control.
(SAP) official points out certain possible limitations, for instance the internal
control may not adequately cover all areas in view of cost considerations, it
cannot for see control mechanism for transactions of unusual nature it cannot
stand against deliberate circumvention of control procedures by management.
False manipulation of transaction by the entity with tacit approval of
management or ingenious breach of controls by staff by collusion or controls
may become absolute in changed see recognizing this vital fact the auditor
should proceed to evaluate the internal control. (Tandon 2005)

2.8.Audit practice in Relation to Internal Control

The features of internal control system and the efficiency and effectiveness with
which it is being operate from the basis for the auditor to decide the extent of
detailed he has to perform. As general rule, where a fool proof system of
internal control to the satisfaction of the auditor is in successful operation in
detail but to select groups of representative transactions. For close and detailed
examination, at the other end of the seal stand organizations where the control
and the system of internal control are so seriously inadequate that not useful
purpose could be served by embarking up an any kind of extensive detail;
checking because even the most exhaustive cheeks would not enable him to
form an opinion on the financial statements. In between these two extremes in
the system of internal control, hence one of the first duties of the auditors is to
examine and review the accounting system and related internal control to
determine the nature timing and extent of the audit procedures to be
performed in order to establish the relatability of the records as basis for the
preparation of the financial statement which will present a true Ans fair view in

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other words the auditor needs to study and evaluate the accounting system
and related internal controls instituted by the client business sour to enable
him to enable him to establish the degree of reliance which he can place there
an in determining the nature, timing and extent of his substantive procedure.
(lekshanyshekhar 2000)

2.9.Elements of internal Control

Internal control system operates at different levels of effectiveness determining
whether particular internal control system is effective judgment resulting from
an assessment of the five components. Control environment, risk assessment,
control activities, information and communication and monitoring effective
controls provide reasonable assurance regarding the accomplishment of
establish objectives. (Konrath, 2002)

2.9.1.Control Environment
The control environment as established by the organization’s administration
sets the tone of an institution and influences the control consciousness of its
people leaders of each department area or activity establish a local control
environment. This is the found for all other components of internal providing
discipline and structure. (Richiute2002 USA)

2.9.2.Risk Assessment
Every entity faces a variety of risk from external and internal sources that must
be assessed. A precondition to risk assessment is establishment of objectives
linked at different levels and internally consistent. Risk assessment is the
identification and analysis of relevant risks to achievement of the objective
forming a basis for determining by how the risks should be managed. Because
economics, regulatory and operating conditions will continue to change.(Larry
2002).
Objective must be established before administration can identify and take
necessary steps to manage risks. Operations objectives related to effectiveness
and efficiency of the operations including performance and financial goal and

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safe guarding resource against loss financial reporting objective pertain to the
preparation of reliable published financial statements including prevention of
fraudulent financial reporting compliance objectives pertain to lows and
regulations which establish minimum standards of behavior. (Konrath 2004).
The process of identifying and analyzing risk is an ongoing process and is a
critical component of an effective internal control system. Attention must be
focused on risks at all levels and necessary actions must be take to mange.
Risks can pertain to internal and external factors. Aster risks have been
identified they must be evaluated. Managing change requires a constant
assessment of risk and the impact an internal controls economic industry and
regulatory environments change and entities activities value mechanisms are
needed to identify and react to changing conditions.(Konrath, Larry, Auditing
concepts & Application USA, 1999).

2.9.3.Control Activities
Control activities are the policies and procedures that help to ensure
management objective are carried out they help ensure that necessary action is
taken to address to the achievement of the entity’s objectives. Control activities
occur throughout the organization at all levels and in all functions. They
include arrange of activities as diverse as approvals, authorizations verification,
reconciliations, predict reviews of operating performance, security of and
segregation of duties. Control activities usually involve two elements a policy
establishing what should be done and procedures to affect the policy. All
polices must be implemented through fully, conscientiously and consistently.
(Shekhar 2003).

2.9.4.Information and Communication

Pertinent information must be identified, captured and communicated in a
form and time frame that enables people to carry out their responsibilities.
Effective communication must occur in a broad séance, flowing down, across
and up the organization all personnel must receive a clear message from top
management that control responsibilities must be taken seriously. They must
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understand their own role in the internal control system, as well as how
individual activities relate to the work of others. The must has a means of
communicating significant information up stream. (2003).

2.9.5.Monitoring
Internal control system need to be monitored a process that assess the quality
of the system’s performance over time on going monitoring occur in the
ordinary course of operations, and includes regular management and
supervisory activities, and other action personnel take in performing their
duties that assess the quality of internal control system performance.
The scope and frequency of separate evaluation depend primarily on an
assessment of risks and the effectiveness of ongoing monitoring procedures,
internal control deficiencies should be reported up stream. With serious
matters reported immediately your top administration and governing boards.
(Irwin, 2005)
Internal control system changes over time. The way controls are applied may
evolve, once effective procedures can become less effective due to the arrival of
new personal, varying effectiveness of training and supervision, time and
resources constraints, or additional pressures, furthermore, circumstances for
with the internal control systems was originally designed also may change.
Because of changing conditions, management needs to determine whether the
internal control system continues to be relevant and able to address new risks.
(Irwin, 2005)
2.10 Empirical Evidences Review
Different researches were conducted on the existing practices of internal
Ethiopian context. The focus of those papers varies in terms of sectors,
industries and institutions. Highlights of some previous research papers on
similar subject areas including the research conclusions and recommendations
are discussed auditing in the as part of the evaluate of previous empirical
evidences and presented as follow:

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Yisehak Tigabu (2013) in the research entitled “ Internal audit practices in the
Ethiopian Financial sector, as compared to the International Professional
Practicing Framewor (IPPF) pronounced by the IIA” to compare the existing
internal audit practices in the Ethiopian financial sector by taking the
framework as a benchmark. The financial sector in Ethiopia comprises of
banks, insurance companies and microfinance institutions. A mix of sample
was taken from all and the research deployed three data collection methods:
questionnaires, interview and document review. The results of the research
revealed that the current practices of internal audit activities (IAAs) in the
Ethiopia financial sector did not comply with the IPPF guidelines that
promulgated by the IIA. Furthermore, there were no quality assurance and
improvement programs in place by those financial institutions that can make
their internal audit practices head towards the level of being IPPF complaint.
The research recommended that the c urrent IAAs in the Ethiopian financial
sector should comply with IPPF to make them value adding in the areas of risk
management, internal control and governance. It was also recommended that
those institutions need to introduce quality assurance and improvement
programs, both internal/external and/or periodic/ongoing, to periodically
review and improve the quality of their IAAs.(Yisehak Tigabu, 2013)
Hamdu Kedir, Dr Arega Seyom and Addisu Gemeda in their article entitled
auditing standards and its practice the case of East Arsi Zone, Ethiopia”
“Internal presented the result of their case study that evaluated the current
practices of internal auditing in the internal audit departments o f selected
public enterprises in East Arsi Zone, Ethiopia as compared to major internal
audit standards. The purpose of the study was to investigate how major
internal audit standards are applied in the internal audit departments of
selected Public enterprises in East Arsi Zone of Ethiopia, taking competency,
compliance, Independency, Risk management and quality assurance as major
parameters of the IIA standard for he comparison. The result of the study showed that the
scope of the internal audit function in enterprises surveyed did not yet go far from the
traditional practices and much time is devoted in performing financial and compliance audits.

15
Regarding quality assurance program, none of the respective public enterprises’ audit
departments have quality assurance programs. Thus, CAE should be able to develop quality
assurance programs. (Hamdu Kedir, 2014).
Bethlehem Fekadu conducted research on “Internal Audit Practices: A Case of Ethiopian
Governmental Higher Educational Institutions for the purpose of investigating challenging
factors that have influenced the Ethiopian higher governmental institutions’ internal audit
practices. The study was done on four universities, Adama, Hawasa, Haramaya and Addis Ababa
Universities. Seven internal auditors who wer e selected using convenience sampling
techniques were used as data source and open ended and closed ended questionnaires were
used as data gathering tools. Then qualitative approaches were employed to analyze and
interpret the filled in data. The findings of the study showed that IAAs in the sample
Universities lacked the following: none of the sample universities have established the audit
committee, their Internal Audit departments were not sufficiently resourcethat affected their
effectiveness, no developmental programs for their internal auditors, risk based internal audit
plans were not established and none of the respective universities’ audit departments have
quality assurance program including the internal and external quality evaluate processes as
required by ISPPIA No.1300. Proper management commitment and other organizational factors
were critical factors influencing effectiveness of IAF in the respective universities. The research
concluded that proper management commitment, lack of capacity development programs for
internal auditors and other organizational factors were critical factors influencing effectiveness
of IAF in the respective universities. To alleviate those problems, it was recommended that
management and the audit division of the respective universities has to work jointly to improve
the IAF of their respective universities as per requirements of international standards. (Fekadu,
2009)

2.11 . The Research Gap

Previously very few researches have been done regarding internal auditing related topics at
various organizations in Ethiopia. By the definition of IIA, the internal audit is expressed as a
profession that is moving from its traditional view (approach) to the new risk (approach) based

16
view . Since internal auditing in today is different from internal auditing yesterday and before, it
is under a continuous review and progress (Reding et., 2013).

Therefore, as a global guidance setting body, the IPPF organizes authoritative guidance that
promulgated by the IIA. The IIA provides internal audit professionals worldwide with
authoritative guidance organized in the IPPF as guidance mandatory guidance and
recommended.Conformance with the principles set forth in mandatory guidance is required
and essential for the professional practice of internal auditing. These mandatory guidance
elements are categorized into two namely attribute standards and performance standards. The
standards together with the code of ethics encompass all mandatory elements of the IPPF. As it
is a mandatory guidance, no previous research was made in Awash Bank Bedessa branch by
taking into account the mandatory guidance elements the revised International Standards for
the Professional Practice of Internal Auditing (Standards) that was released by the International
Internal Audit Standards Board (IIASB) effective January 2017 and the code of ethics.

It could be seen from the above discussion that majority of the previous studies were
concentrated on the effectiveness of internal audit in various organizations in Ethiopia. Very
few studies were conducted on the area of assessing the internal audit practices in different
sectors and industries. As well, since todate, no research has been done by paying a special
attention to assess the practices of internal audit in Awash Bank of Bedessa Branch by taking
the mandatory guidance elements: the revised international auditing standards and the code of
ethics as a benchmark. So the forgoing research gaps were identified and derives the attention
the researcher to do well his time on the stated gaps.

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Chapter Three

3. Methodology

3. Study area
This study will be conducted on Internal Auditing Practice in Awash Bank Bedessa Branch.
Located far away thirty seven(37.Kms) from Oda Bultum University.

3.1. The research Approch

The study will be focuses on the Evaluation of Internal Audit Practice In Case Of Awash Bank in
Bedessa Branch. The study will be used both qualitative and quantitative research approaches in
order to achieve the research objective.

3.2. Source of data

In order to get sufficient and relevant information for the study the researcher will be use both
primary and secondary data.The primary data will be collected from employees working on audit
department and manager of awash bank in bedessa branch and secondary data will be collected
from books, manuals and reports.

3.3 Methods of Data Collection

Primary data obtained using questionnaires, interview with the manager of the Awash Bank
Bedessa branch and observations. Questionnaires were distributed to various employees of the
Awash Bank bedessa branch. Secondary data source such as the Awash Bank audit evaluation
report, Awash Bank internal audit charter, manuals, and other documents relevant to the study
were reviewed and observed.

3.4 Population size and sample Technique

The target population for the research was 24 employees and the sample size will be 12
employees of Awash Bank in the bedessa branch. The selection of the sample was judgmental
method for the study. The reasons for this is specially those staff members are directly or

18
indirectly involved in the internal audit activity of the Awash Bank in bedessa branch ,and they
were participate in the study as respondents to the questionnaire.

3.5 Sampling techniques

To select the sample the researcher will be used non-probabilistic judgmental
sampling which is based on the researcher judgment to select the sample
technique. Based on this The researcher select is employees from the bank that
have jobs related with finance and audit. The questionnaires distributed for
these employees and the researcher also interview the manager.

3.6 Data Analysis

The data collection through the questionnaires and interview were organized
and analyzed. Then tabulate in the form of tables and interpretation was made.
The data that was gain from the questionnaires was analyze quantitatively
where as the data that was gain from the interview also analyze qualitatively
and conclusion and recommendation were give.

CHAPTER FOUR
4,BUDGET AND TIME SCHEDULE
4.1 TIME SCHEDULE
S/ MAIN April May June July201 Augst2019 September201 OCT.2019
N ACTIVITES 2019 2019 2019 9 9

1 Title 
selection

19
 2 Proposal 
writing

3 Proposal 
submission

4 Preparing 
questionnair
es

5 Data 
colle
ction

6 Data analysis 

7 Report 
writing

8 Report 
submission

9 Report 
defense/pres
entation

4.2 COST BUDGET EXPECTATION

No. Item Unit Unit price Total cost(birr)

1 Pen 10 7 70

20
2 Paper 1 250 250

3 Writing & Printing 100 pages 5 500

4 Coping 50 pages 1 50

5 Telephone and internet 120 min 0.70 84

6 Transportation -- -- 200

7 Miscellaneous expense -- -- 100

Total cost 1504

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B.NTondom(2005)“Ahandbookofpracticalauditing”SHANDandCompanyTID.
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K.CshekharandleksmyS(2000)“AuditingincorporatingCompanies”Vikaspublishi
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