Internal Audit Corporate Governance

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A Study on Effective Implementation of Internal Audit Function to Promote Good Governance in the Public Sector

Zeleke Belay (BA, BSc, ACCA, MSc,)
Lecturer at College of Telecommunication and Information Technology Department of Telecommunication Management Email: zelekebly@yahoo.com Mobile: 251 9 11 66 98 61 Office : 251 11 416 99 00 P.o Box: 1413, Code 1110

Addis Ababa

Presented to the “The Achievements, Challenges, and Prospects of the Civil Service Reform Program Implementation in Ethiopia” conference

Ethiopian Civil Service College Research, Publication & Consultancy Coordination Office

April 2007

ABSTRACT Well performing internal audit function is one of the strongest means to monitor and promote good governance system in an organization. As a result, in many countries it has received an increasing attention as an important component of government financial management and as a tool for improving the performance of the government sector. In connection to this, survey is conducted on selected public enterprises in Ethiopia to assess and determine what current practices and desired practices of the role of internal audit functions are and to identify the gaps related to monitoring and promoting of good public sector governance system.

Findings reveal that, the existing IAF in the public sector has les satisfactory involvement to asses the effectiveness of governance structure due to lack of resources, poor leadership for IAF, absence of appropriate frame work to measure IAF performance and lack of competent personnel.

However, to curb corruption and inefficiency in the public sector of Ethiopia by promoting accountability and greater transparency about government programs and services, it is mandatory to have brave IAF as part of modern management control system that in turn needs IAF itself to have appropriate governance structure, mobilizing sufficient and appropriate resource and competent personnel.

Keywords: Internal audit function, good governance, public sector, cavil service reform

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ABBREVIATIONS AND ACRONYMS

CBE CTIT EAL EIC ETC IAF IIA CPD CAE CSRP FDRE OECD WTO

Commercial Bank of Ethiopia College of Telecommunication & IT Ethiopian Air Line Ethiopian Insurance Corporation Ethiopian Telecommunication corporation Internal Audit Function Institute of Internal audit Continuous Professional Development Chief Audit Executive Cavil Service Reform program Federal Democratic Republic of Ethiopia Organization for Economic Cooperation and Development World Trade Organization

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TABLE OF CONTENT

Introduction.................................................................................................................................. 1 The role of auditing to promote good governance....................................................................... 2 Factors for the effectiveness of public sector audit activity ........................................................ 4 Research study agenda................................................................................................................. 8 Objective of the study .................................................................................................................. 9 Relevance of the study ............................................................................................................... 10 Methods of data gathering and reliability .................................................................................. 11 Analysis methods ....................................................................................................................... 11 Empirical results and discussion................................................................................................ 12 Summary and conclusion........................................................................................................... 16 Scope of the study and related areas for future research...
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