Internal Audit Effectiveness and its Determinants: A Conceptual Analysis from Selected Private Banks in Mekelle City

An effective internal audit function is one of the foundations of good governance in banks due to their inherent vulnerability to risks and the ever-increasing regulatory compliance demands. This paper presents a conceptual and partially empirical investigation of the effectiveness of internal audit in private commercial banks in Mekelle City, Ethiopia. Descriptive evidence from a survey of 130 valid responses (out of 134 collected) from internal auditors and branch managers supports the conceptual analysis. Drawing on agency, institutional, and communication theories, the paper proposes six key determinants: organisational independence, the competence of audit staff, the quality of audit work, management support, the audit charter, and the audit committee. Management support, auditor competence, and quality of audit work emerged as the most influential determinants. It is hoped that this paper will add to the body of knowledge connected to internal audit in developing countries.

Internal audit effectiveness, Management support

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