ARBA MINCH UNIVERSTY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

ASSESSMENT OF INTERNAL AUDITING EFFICIENCY AND EFFECTIVENESS (A

CASE STUDY ON OMO MICRO FINANCE ARBA MINCH TOWN)

A RESEARCH PROPOSAL SUBMITED TO THE DEPARTEMENT OF ACCOUNTING

AND FINANCE IN THE PARTIAL FULFILMENT OF THE REQUIRENMENT FOR BA
DEGREE IN ACCOUNTING

BY: - LEYKUN GETACHEW

ID: EBE/283/11

ADVISOR: - WUDENEH A. (Mac) JAN, 2022

ARBAMINCH, ETHIOPA
Abstract

Effective and efficient internal auditing practice is a base for preserving the stability of any
organization. the overall objective of this study will aiming to conduct internal auditing
effectiveness and efficiency in case omo- micro fiancé in Arba Minch branch. In the study the
researcher will be use descriptive type of research design. To achieve the objective of the
research primary data will be used. Primary data will be collect through questionnaires and
semi – structural interview .The study try to assess the current practices of internal audit in Arba
Minch Town omo- micro finance. On the collected data regarding the sample, judgmental
sampling of non-probability will be used. The researcher also will use mixed research approach
which means both qualitative and quantitative approach used. On the collected data descriptive
analysis will be made then after the data had been gathered, it would be analyzed and presented
in a tabular form and percentage method. Careful interpretation of analyzed information was
carried out to arrive at reasonable generation.

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 TABLE OF CONTENT

Content Page

Contents

Abstract………………………………………………………………………………………………………
1. INTRODUCTION.......................................................................................................................1
1.1 Background of the study........................................................................................................1
1.2 Statement of the Problem.......................................................................................................3
1.3 Research Questions....................................................................................................................4
1.4 Objectives of the Study..........................................................................................................4
1.4.1 General Objective...........................................................................................................4
1.4.2 Specific Objective...........................................................................................................4
1.5 Significance of the Study.......................................................................................................5
1.6 Scope of the Study.................................................................................................................5
1.7Organization of the paper.......................................................................................................5
CHAPTER TWO
2. REVIEW OF LITERATURE
2.1 Theoretical Review............................................................................................................6
2.1.1 History of Internal Auditing...........................................................................................6
2.1.2 The Institute of Internal Auditors (IIA)..........................................................................8
2.1.3 International Professional Practices Framework (IPPF).................................................8
2.1.3.1 Mandatory Guidance...................................................................................................8
2.1.3.2 Recommended Guidance.............................................................................................9
2.1.4 Definition of Internal Auditing.......................................................................................9
2.1.5. International Standards for the Professional Practice ofInternal Auditing....................9
2.1.6. History of Auditing in Ethiopia...................................................................................10
2.2 Empirical literature review..............................................................................................11
2.3 Research Gap.......................................................................................................................12
CHAPTER THREE.......................................................................................................................13
3. METHODOLOGIES.................................................................................................................13
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 3.1 Research Design..................................................................................................................13
3.2. Research Approach.............................................................................................................13
3.3 Data Types and Sources.......................................................................................................13
3.3.1 Primary Data.................................................................................................................14
3.4 Method of Data Collection..................................................................................................14
3.5 Population /Target Group/...................................................................................................14
3.6 Sampling Technique and Sample Size................................................................................14
3.7 Data Analysis.......................................................................................................................15
Reference.......................................................................................................................................15

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CHAPTER ONE

1. INTRODUCTION

Most scholars agree that the role of internal auditing efficiency and effectiveness in public sector
governance is compulsory. A healthy constructed internal auditing function can play vital role in
the governance and accountability process of public sector institutions and private sector
companies through their assessment on the effectiveness and efficiency of key organizational
controls, governance and risk management process. In this chapter the subtopics that are going to
be discussed include Background of the study, Statement of the problem, Research question,
Objectives of the study, Significance of the study and Scope of the study.

1.1 Background of the study

In recent years internal auditing (IA) has undergone dramatic change that have extended its area
of involvement in a way that allow it to make greater contribution in order to add more value to
the efficiency and effectiveness of organization. Traditionally the role of internal auditing has
focused on compliance assurance, financial control and asset safeguarding. After the corporate
financial standards of the 2000,s many reforms (Sarbanes-Oxley Act 2002; Combined Code
2003;OCED 2004; IFAC2006) have reinforced the responsibilities of internal auditing efficiency
and effectiveness enhancing corporate governance mechanisms.

According to the definition of Institute of Internal Auditors (IIA), internal auditing is an

independent, Objective assurance and consulting activity designed to add value and improve an
organization’effeciency and effectiveness. It helps an organization to accomplish its objectives
by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk
management, control and governance process. So that the aim of internal auditing is to improve
organizational efficiency and effectiveness through constructive criticism (Goodwin-Stewarts
and Kent, 2006).

Ellis/2003/ asserts that the value of internal audit had been affected by the perception that
internal auditing only appraises accounting function is past and post-operative contrary to
proactive and hence does not have a big effect on organizational performance.

1
The professional practices framework (PPF) is produced by the IIA are the only set of
internationally recognized standards for internal audit. It is the criteria by which the operations of
an internal audit department are evaluated and measured, and intended to represent the internal
auditing practices as it should be.

Although a number of countries have developed their own internal audit standards, these are
based in large part on the IIS , s standards. In Ethiopia the office of audit general undertakes
external audit of government ministries and their respective offices to ensure accountability.
Public sector organizations are also required to have internal auditing efficiency and
effectiveness to support management. The ministry of finance and economic development has
the authority to issue internal audit manuals for use by all organizations that are wholly and
partially financed by the government budget and concerned with providing basic government
services to the whole society. The minister has issued a manual that contain a code of ethics for
internal auditors and procedural guidance on the conduct of audit (MOFED, 2005). Internal audit
standards of the Ethiopian government specified is closely matches with those published by IIA.

Although the internal auditing has many roles and contributions to the organization and the
public interest, it also faces many challenges. Some of the challenges identified by the ministry
of finance and economic development (2004), in their internal audit manual there are lack of
management respect, lack of independency, lack of professional development, etc…
Additionally researches have been undertaken on internal auditing practice in Ethiopia.

Among the conducted research Mihiret and Yismaw, (2007) on internal audit effectiveness and
efficiency in Ethiopia public universities, Kedir, et al. (2014) on internal auditing standards and
its practice the case of East Arsi zone, Haile Mariam (2014) on determinants of internal audit
effectiveness in the public sector, Mohammed Said, on internal audit and risk assessment in
Ethiopian public enterprises” and others can be mentioned.

It is with this background that the researcher by this study will attempt to assess the internal
auditing efficiency and effectiveness in Arbaminch omo micro fiancétown, specially will try to

Examine the competence of the auditing practice and the perception of the head and other
employees about internal audit efficiency and effectiveness.

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1.2 Statement of the Problem
Along with the development of the economy and technology, internal auditing efficiency and
effectiveness has become an important aspect of corporate governance in an organization.
Economic crisis, corporate failures, malpractice and growth in the number of reported fraud
cases has emphasized on the importance of an effective internal auditing. The effectiveness and
efficiency of internal auditing practice greatly contributes to the effectiveness and efficiency of
each audit in particular and the organization at large (Dittehosfer, 2001). Sparkman.
(1997).applying the theory of transaction cost economics, demonstrated how internal audit
recommendations are important to the management of government organizations.
Internal auditing is an independent, objective assurance and consulting activities designed to add
value and improve an organizations. It helps an organization to achieve its objectives by
introducing a systematic its objectives by introducing a systematic discipline approach to
evaluate and improve the effectiveness and effeciency of risk management, control and
governance.
The Institute of Internal Auditors provides the professional practice frameworks and sets
standards, which are worldwide with authoritative and mandatory guidance for internal
auditingefficiency and effectiveness. Hence by taking this mandatory guidance and framework in
to consideration, the researcher reviewed related researches on internal auditing practice and
noticed the following major points on the area.
 In most cases the internal auditing independency is impaired because most of the time they
are attached with internal functional areas, Kedir et al; (2014)
 Internal auditing efficiency and effectiveness in the case of Ethiopian governmental higher
educational institutions shows that lack of proper management commitment, lack of
developmental program for internal auditors and other organizational issues are critical
factors influencing effectiveness and efficiency of internal auditing function in the public
universities. (Bethlehem, 2000)

Recent researches on internal audit effectiveness and efficiency on Ethiopian public sector show
that internal audit of organizations need improvement in the areas of audit planning,

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 Documentation of auditing work, audit communications and follow-up of recommendations.
(Mihiret and Yismaw, 2007)
 Most internal auditors undertake their day to day internal audit activities traditionally and did
not have profound knowledge of IPPF(Hamud Kedir, Dr. Arega Seyoum & Addisu Gemeda,
2014)
From the empirical reviews on internal auditing practice the researcher understood that previous
researches have not emphasized on the quality of the internal audit and the researches are
conducted at higher level, which means they did not consider the conditions or realities of the
lower level.
Therefore, these research gives remedy to the gaps and the need for improvement on internal
auditing activity due to the changing conditions triggered the researcher to conduct this research
in the future.

1.3 Research Questions

After stating the research problem the following research questions were developed to guide the
study
 What are the factors affecting internal auditing practice of the organization?
 How does internal audit objectivity and independence managed in the organization?
 Does the internal audit staff maintain the expected proficiency or competency and exercise
the professional care?
 To what extent the head and other employees of the organization have proper understanding,
knowledge and support for internal audit role?

1.4 Objectives of the Study

1.4.1 General Objective

The general objective of the study is to assess the current practices of internal audit in
Arbaminch Town omo micro finance.

1.4.2 Specific Objective

Particularly this research will try to achieve the following objectives.
 To identify factors affecting the internal auditing practice of the organization

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  To examine the internal audit objectivity and independency in the organization
 To assess the internal audit staff proficiency (competence) and their professional
 To evaluate the level of understanding, knowledge and support of the head (management)
and employees about internal audit role for the organization

1.5 Significance of the Study

At the very beginning this study concerned / aimed at / an assessment of internal audit practices,
therefore the result of the study will provide information about the identified weak area in the
internal audit activity and their constructive recommendation as a result leads to improvement
and adjustment. The result of this study also helps to achieve the objective of the organization.
Furthermore, this study will add value to the existing internal audit practice. Moreover, it will
serve as a starting point or reference paper for other researcher who will work on the same
subject area.

1.6 Scope of the Study

The relevant dimensions selected in particular for this study is limited to such factors only in the
studied organization level that is; management support, adequate and competent internal audit
staff, internal audit independence and quality of internal audit work. The target groups of the
population are the internal audit team/staff/ and some selected other department ’s staff.

1.7Organization of the paper

The research paper is organized in the following form: chapter one discusses introduction;
chapter two discusses review of related literature ; chapter three discusses Research methodology
part; chapter four also discuss discussion, analysis and presentation of data; and chapter five
discusses the results, conclusions and recommendations.

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CHAPTER TWO
2. REVIEW OF LITERATURE
This part of the study reviews the role internal auditing department needs for independence and
the scope and objective of the work performed by internal auditor and basic concepts of auditing

2.1 Theoretical Review

2.1.1 History of Internal Auditing

The profession of auditing in general, and internal auditing, in particular, is ancient; (Pickett,
2010, p.8) It was “father of modern internal auditing” Lawrence Sawyer who said that word
auditing comes from ancient Rome. Ancient officials were performing public and oral
verification of records that was called “hearing of accounts”. This event was later describedby
the term, audit”. It derived from Latin “auditus” which means „a hearing” (Pickett, 2010).The
roots of internal auditing are long and profound, traces to centuries B.C. However, thebirth of
modern day internal auditing is perceived by many to happen with the formation ofThe Institute
of Internal Auditors (IIA). It was established in 1941 in the United States, withfirst 24 members
(Reding et al., 2013) IIA’s fast growth, worldwide expansion, continuousresearch, and
development fueled growth in internal audit profession. Internal audit function started mainly as
protection against fraud and asset loss. Organizationsgrew in size and complexity which led to
their decentralization. Management needed to internally evaluate accounting information that
was used for making decisions. They alsoneeded to control efficiency of work and to ensure that
no deceitful actions took place. Thenfirst companies that realized the potential of internal
auditing beyond audit of financial statements were railroad, defense, and retail industries.
Quickly, internal auditing became a mean to verify all transactions and to summarize business
and its activities. In this wayinternal audit provided further insights and ensured integrity and
objectivity (Rama-moorti, 2003, p.3).Therefore, internal audit’s role changed from typical
clerical function to a managementpractice. It described internal audit as „the activity which
independently applies consistent procedures and inspection standards in order to assess the
relevance and performance of all orpart of the actions within the organization, in reference to
standards” (Autissier, 1998, p.3).Establishment of IIA confirms this transformation in the
internal audit function. One of thefirst IIA charter members Robert B. Milne describes the reason
behind the establishment ofThe Institute of Internal Auditors as follows: “The Institute is

6
the outgrowth of the belief onthe part of internal auditors that an organization was needed in the
structure of Americanbusiness to develop the true professional status of internal auditing.
Although its roots are inaccountancy, its key purpose lies in the area of management control. It
comprises a completeintra-company financial and operational review” (Rama-moorti, 2003,
p.4).Even though, in the early years after the establishment of IIA, internal auditing was
stillconnected with external audit. Internal auditors have still been assisting in the review
offinancial the financial statements, but the profession was developing. It can be said that it
wasfinally established as serious and fully equipped profession in 70’s. In 1974 first
CertifiedInternal Auditor exam was held since 1978 all American listed companies are required
to have auditing boards with three tofive independent members (Autissier, 1998, p.4). By that
time internal audit function has alsogrown to include “operational” orientation that is “control
which functions by examining andevaluating the adequacy and effectiveness of other controls”
(Rama-moorti, 2003, p.6).Additionally, internal auditor’s importance in organization’s hi-
erarchy rose as its success wasdepending on the relationship between the audit committee and
those in charge of theorganization (Rama-moorti, 2003, p.7).By 1990’s, The Institute of Internal
Auditors implemented a new definition of internalauditing in the form that is known today:
“Internal auditing is an independent, objective assurance and consulting activitydesigned to add
value and improve an organization’s operations. It helps anorganization accomplish its objectives
by bringing a systematic, disciplined approachto evaluate and improve the effectiveness of risk
management, control, andgovernance processes. “Through 2000’s and the beginning of 2010’s
internal auditing evolved around tightenedregulations and increased need for regulatory
compliance. It was focusing more on riskmanagement, improvement of business operations and
IT and battle with corruption. This wasmainly due to global economic downturn and many
corporate scandals that resulted in newlaws and regulations. Continuous and rapid development
of internal auditing over the years has been fueled by globalization, technological development,
e-commerce and growing complexity oforganizational structures (Redding et al., 2013). In the
same time, The Institute of InternalAuditors expanded into 170 countries and territories with
over 180,000 members worldwide it continuously conducts research and develops practices that
allowinternal audit to adjust and respond to ever-changing needs of organizations.

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2.1.2 The Institute of Internal Auditors (IIA)

The Institute of Internal Auditors (IIA) is an international professional association with global
Headquarters in Altamonte Springs, Florida, USA. IIA was established in 1941. The IIA isthe
internal audit profession's global voice, recognized authority, acknowledged leader,
chiefadvocate, and principal educator. Generally, members work in internal auditing,
riskmanagement, governance, internal control, information technology audit, education,
andsecurity. Globally, The IIA has more than 180,000 members. The IIA in North America
comprises 160chapters serving more than 72,500 members in the United States, Canada, the
Caribbean, Bermuda, Guyana, and Trinidad & Tobago. Members enjoy benefits offered by the
NorthAmerican Service Center including local, national, and global professional networking;
world-class training; certification; standards and guidance; research; executive development;
career opportunities; and more. Internal auditors throughout North America enjoy freemembers
only webinars and national conferences such as the General Audit ManagementConference, the
Governance, Risk, and Control (GRC) Conference, and the All StarConference. The IIA’s Audit
Executive Center provides chief audit executives relevant andtimely thought leadership and
connections to peers for benchmarking and sharing bestpractices. In addition, resources such as
IIA Quality Services make The Institute an indispensablepartner to you and your organization.

2.1.3 International Professional Practices Framework (IPPF)

The Global Institute of Internal Auditors has developed a comprehensive range of standards,
guidance and guides to help internal auditors around the world in their work. The International
Professional Practices Framework (IPPF) has been developed to organize the full range of
internal audit guidance from IIA Global in an accessible way. It includes two types of guidance:

2.1.3.1 Mandatory Guidance

IIA members are required to comply with mandatory guidance. This guidance is developed after
consultation with members. These are:

 Core Principles
 Definition of Internal Auditing
 Code of Ethics and

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  International Standards of internal auditing.

2.1.3.2 Recommended Guidance

IIA members are recommended to comply with this guidance. It describes practices for
theeffective implementation of The Core Principles, The IIA's Code of Ethics and the
International Standards for the Professional Practice of Internal Auditing
(InternationalStandards).

2.1.4 Definition of Internal Auditing

Internal auditing is an independent, objective assurance and consulting activity designed toadd
value and improve an organization’s operations. It helps an organization accomplish itsobjectives
by bringing a systematic, disciplined approach to evaluate and improve theeffectiveness of risk
management, control, and governance processes. The Definition of Internal Auditing is the
statement of fundamental purpose, nature and scopeof internal auditing. The definition is
authoritative guidance for the internal audit professionfrom the Global Institute of Internal
Auditors. It is part of the IPPF.

2.1.5. International Standards for the Professional Practice ofInternal Auditing

The International Standards are authoritative guidance for the internal audit profession fromthe
Global IIA. Internal auditing is conducted in diverse legal and cultural environments;
fororganizations that vary in purpose, size, complexity, and structure; and by persons within
oroutside the organization. While differences may affect the practice of internal auditing in
eachenvironment, conformance with The IIA’s International Standards for the
ProfessionalPractice of Internal Auditing (Standards) is essential in meeting the responsibilities
of internalauditors and the internal audit activity (IAA).
The purpose of the Standards is to:

 Guide adherence with the mandatory elements of the IPPF.

 Provide a framework for performing and promoting a broad range of value-added
 Internal auditing services.
 Establish the basis for the evaluation of internal audit performance.
 Foster improved organizational processes and operations.

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The Standards are a set of principles-based, mandatory requirements consisting of:

 Statements of core requirements for the professional practice of internal auditing andfor
evaluating the effectiveness of performance that is internationally applicable an
organizational and individual levels.
 Interpretations clarifying terms or concepts within the Standards. The Standards,
together with the Code of Ethics, encompass all mandatory elements of theIPPF;
therefore, conformance with the Code of Ethics and the Standards
demonstratesconformance with all mandatory elements of the IPPF.Furthermore, the
Standards use the word “must” to specify an unconditional requirement andthe word
“should” where conformance is expected unless, when applying professionaljudgment,
circumstances justify deviation.

2.1.6. History of Auditing in Ethiopia

The importance of internal auditing in Ethiopia was formally recognized in the early 1930s bythe
country’s first Constitution. The development of modern auditing in Ethiopia is markedafter the
issuance of Ministry of Finance directives in 1942, which focused on public sectorfund
utilization (Kinfu, 1990). This document referred to the proper collection of staterevenue and the
necessity for procedures to control expenditures. In 1944, another milestoneoccurred when a
proclamation established the Commission for Audit, charged with auditingthe Ministry of
Finance accounts. The development of state budget practices, an emphasis onfraud deterrence,
and growth in trade and industry subsequently added impetus to the growth of the profession (W-
Ruphael, 1998). As to Lemma Argaw, the ministry of education, ministry of national defense and
the ministry of finance were pioneers in implementing the internal audit practice in Ethiopia. He
revealed this fact as follows. ‘An Internal Auditing function has existed for quite a long time in
Ethiopia; however, it got legal recognition in late1980s (Lemma, 2000).The internal auditing
function started in the budgetary public sector as part of internal control. However, the latter part
of the 1940s witnessed the establishment of Internal Audit functions in the Ministry of National
Defense, Ministry of Education, and Ministry of Finance. It wasalso at this time that the Internal
Auditing units began to sprout in non-budgetary public sector (public enterprises) like Ethiopian

Highway Authority, Ethiopian Airlines, EthiopianTelecommunications, and financial sector that

formed the modern layer of the NationalEconomy” (Lemma, 2000). Perhaps the most direct

10
impact on the status of internalauditing in Ethiopia came from another important document
issued in 1987, Proclamation No.13 (W-Ruphael, 1998). Moreover, Proclamation No. 68/1997
requires that, theFederal Democratic Republic of Ethiopia’s (FDRE) new economic policy be
supported by amodern and reliable audit system in order to ascertain proper implementation
througheffective monitoring of administrative, developmental and service rendering institutions
in theFederal Public Sector. Generally, the history of internal auditing in Ethiopiadated back to
the 1940s just about the time the profession was also evolving in Europe and inthe United States
(Lemma, 2000).

2.2 Empirical literature review

The previous section presented theoretical literature review part of this study; auditing
activity requires highly qualified or skilled, knowledgeable and experienced auditors. Thus,
internal auditor has the responsibilities to assist member of the organization in the effective
discharge of their responsibility. Internal audit furnishes the workers with analysis, appraises,
recommendations cause and interruption concerning the activities reviewed. Internal audit has a
great function which requires a systematic and tactical intelligence of the auditors. Therefore,
persons who assigned to this position in the organization should be versatile in every aspect of
the organization either financial, operational or performance. They should have quality of
auditors which can be gained by education and long period experiences.
Internal audit is the audit of company affairs and to the institute of chartered Accountant of India
define internal auditing an independent appraisal involving specialized application of the
techniques of auditing in accordance with the specific need of the company. (D.P Jain, 1960)
This lack of independence is the major difference between internal auditors and CPA firms. In
many states, internal audit experience can be used to fulfill the experience requirement for
becoming a CPA firm. To maintain independence from other business functions, the internal
audit group typically reports directly to the president, another high executive officer, or the audit
committee of the board of directors.). Pp.16

11
Periodical reviews are drawn up to measure the success or failure of the activity in achieving the
objective of the organization. Benefits of Auditing are for control mechanism, conflict of
interest, consequence and regular requirements.

2.3 Research Gap

Here in this paper, the researcher assessed the existing internal auditing system or to assess
periodic review which every Auditor are expected to adhere while conducting an audit. So the
quality, relevance, validity, independence of Auditors and standards of internal auditing system
in the organization was assessed deeply in order to identify any problem or grievance so that it
can be corrected.

Therefore, this study was tried to assess the current practices of internal audit in ArbaMinch
Town omo micro finance.And the factors affecting the internal auditing practice of the
organization additionally the level of understanding, knowledge and support of the head
(management) and employees about internal audit role for the organization in Arbaminch Town
Omo –micro finance office.

The internal audit department has adequate professional knowledge, skills and experience
on the overall activities of the department

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CHAPTER THREE

3. METHODOLOGIES

3.1 Research Design

To conduct the research, the researcher used the most appropriate design to study, which is
descriptive research design. -Moreover, “descriptive research may be characterized as simply the
attempt to determine, describe or identify what is. The main purpose of descriptive research is to
describe the state of view as it exists at present. Simply stated it is fact finding investigation, in
descriptive research definite conclusion can be arrived at but it does not establish a cause and
effect relationship. This type of research tries to describe the characteristics of the respondent in
relation to a particular product.

3.2. Research Approach

For the purposes of the study the researcher was used mixed research approach because these
methods are specifically useful in understanding contradiction between qualitative results and
quantitative findings. Andtherefore the researcher used mixed research approach in order to have
relevant a data and use to explain internal auditing efficiency and effectiveness of Omo micro
finance Arbaminch.

3.3 Data Types and Sources

By enhancing the quality of data through triangulation and to achieve the objectives of this study,
the researcher needs a multiple forms and sources of data. The types of data are primary and
secondary.

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3.3.1 Primary Data
In this study, the researcher will use primary data that will be collected via questionnaires
distributed to those included in the sample.

3.4 Method of Data Collection

In the data collection process different types of data collection tools / instruments/ will be used in
the study. These instruments vary according to the source from which data will be collected. To
collect primary data a questionnaires are prepared and the questionnaire will have two parts that
is information will be filled bythose people (respondents) that have direct involvement in the
internal audit activity and by those that have indirect involvement. The researcher will collect
the secondary data directly by referring (reviewing) to all documents related to the internal
auditingefficiency and effectiveness activity of the organization.
The questionnaires and document examination will be used to corroborate the patterns that
evolved from collected both instruments, so that the validity of the findings could be enhanced.

3.5 Population /Target Group/

Defining the population of the study is very crucial issue and it is the first requirement for
designing the sample. Accordingly it is defined as follow;-
The target population for the study is the internal audit staff/team/members and the head
/manager/ and some employs of the organization.

3.6 Sampling Technique and Sample Size

From the nature of this research area (i.e. assessing of internal auditing practice) the sampling
technique that will be used for the study is judgmental sampling technique, the one which is non-
probabilistic, this is because as the area of this study requires the decisions of the researcher on
different aspects and in relation to this judgmental technique is suitable and important, because
the judgmental technique of sampling allows for the research to make subjective decisions about
the samples.

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3.7 Data Analysis
Before processing the responses, the completed questionnaires will be edited for completeness
and consistency, after the data will processes and grouped in to categories a descriptive analysis
will be used to summarize the collected data.

Reference
Bethelehem Fekadu (2000). Internal Audit Practices: A Case of EthiopianGovernmental Higher
Educational Institutions.

Dittenhofer, M. (2001). Internal auditing effectiveness: An expansion of present methods.

Managerial Auditing Journal, 16 (8), 443-450.

Fekadu, B. (2009). Internal audit practices: a case of Ethiopian Governmental Higher

Educational Institutes.

Goodwin-Stewart, J. & Kent (2006). The Relation between External Audit Fees, Audit

Committee and Internal Audit. [Online] Available at: http://epublications.

bond.edu.au/business pubs/15 [Accessed 06 11 2015].

Hamdu Kedir, Dr. Arega Seyoum and Addisu Gemeda (2014). Internal Audit Standards

Andit’s Practice: the Case of East Arsi Zone, Ethiopia.

Kedir H. et al. (2014, octobre). Internal auditing standards and its practice the case of. Basic
Research Journal of Business Management and Accounts, 3(6) (2315-6899), 08-84

Kinfu, J. (1990). Accounting and auditing in Ethiopia: a historical perspective,

Lema Argaw, proceedings inaugural ceremony of IIA-EC, The State of internal

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 Auditing in Ethiopia the Way Forward to Professionalism, December 2000, pp21-37.

Mihret A. and Yismaw W, (2007),"Internal audit effectiveness: an Ethiopian public sector case
study", Managerial Auditing Journal, Vol. 22 Iss 5 pp. 470 – 484.

MOFEC.(2005). Internal audit procedural manual, Ministry of finance and economic

cooperation, Addis Ababa

Mohammed Seid (2011). Internal Audit and Risk Assessment in Ethiopian Public

Enterprises.

Pickett K.H Spenser (2010). The Internal Audit Handbook- 3rd Edition.
Rid-dle, C. (2013).Internal auditing. Altamonte Springs, Fla.: Institute of Internal
Auditors, Research FoundationProceedings of the First National Conference of Ethiopian
Studies, Institute ofEthiopian Studies. (pp. 189-225). Addis Ababa: Addis Ababa.
Samuel Mulugeta (2008). Internal Audit: Reporting Relationship in Ethiopian PublicEnterprises.

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TIME AND BUDGET SCHEDULE

1/ Time Schedule

NO Activity Nov Dec Jan Feb Mar Apr May

1 Literature review and Topic selection
2 Preparation of proposal and
submission
3 Data collection
4 Data processing and Analysis
5 Presenting the data and Making
conclusion
6 Writing the research paper and
submission
7 Paper presentation

BUDGET SCHEDULE

NO Items Unitof measurements Quantity Cost Analysis

Per unit Total cost

birr Cent Birr cent

1 Pen Number 8 10 00 80 00
2 Paper Packet 1 packet 220 00 220 00
3 Typing& printing Page 150 1 50 225 00
4 Binging Per bind 3 15 00 45 00

17
5 Internet Per minute 2 hr 18 00 36 00
6 Miscellaneous 00 00 500 00
7 Total cost 264 50 1106 00

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