HARAMAYA UNIVERISTY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF ACCOUNTING AND FINANCE

ASSESSMENT OF INTERNAL AUDITING PROCEDURES

AND PRACTICES IN CASE OF ETHIO TELECOM DIRE
DAWA DISTRICT

A Research Proposal Submitted To College Of Business And Economics,

Department Of Accounting And Finance In Partial Fulfillment Of The
Requirement For Bachelor of Arts (BA) Degree In Accounting And
Finance.

Prepared By: Mustafa Mohammed

Advisor: Ashu G.

Dire Dawa, Ethiopia

November, 2023
 TABLE OF CONTENT
TABLE OF CONTENT........................................................................................................... I
LIST OF TABLES ................................................................................................................ III
ACRONYMS ......................................................................................................................... IV
ABSTRACT ............................................................................................................................. V
CHAPTER ONE ...................................................................................................................... 1
INTRODUCTION.................................................................................................................... 1
1.1 Background of the Study ................................................................................................... 1
1.2 Statement of the Problem .................................................................................................. 2
1.3 Research Questions ............................................................................................................ 3
1.4 Objective of the Study ....................................................................................................... 4
1.4.1 General Objective .......................................................................................................... 4
1.4.2 Specific Objective ......................................................................................................... 4
1.5 Scope of the Study .............................................................................................................. 4
1.6 Significance of the Study ................................................................................................... 4
1.7 Organization of the Study ................................................................................................. 5
CHAPTER TWO ..................................................................................................................... 6
REVIEW OF RELATED LITERATURE ............................................................................ 6
2.1 Theoretical Review............................................................................................................. 6
2.1.1 Overview of Internal Auditing ...................................................................................... 6
2.1.2 The History and Evolution of Internal Auditing ........................................................... 7
2.1.3 Establishment and History of Internal Audit in Ethiopia .............................................. 8
2.1.4 The Roles of Internal Auditors ...................................................................................... 9
2.1.5 Types of Audits Performed by Internal Auditors ........................................................ 12
2.2 Empirical Reviews ........................................................................................................... 13
2.2.1 The Internal Audit Quality .......................................................................................... 17
2.2.2 The Organizational Setting.......................................................................................... 18
2.2.3 The Internal Audit Charter .......................................................................................... 18
2.2.4 The Management Support ........................................................................................... 19
2.2.5 The Resource availability ............................................................................................ 19
2.3 Summary ........................................................................................................................... 20
CHAPTER THREE ............................................................................................................... 21
RESEARCH METHODOLOGY ......................................................................................... 21

I
3.1 Study Area ........................................................................................................................ 21
3.2 Research Design and Approach ...................................................................................... 21
3.3 Data Collection Instrument ............................................................................................. 23
3.3.1 Interview...................................................................................................................... 23
3.3.2 Document Review ....................................................................................................... 24
3.3.3 Questionnaire .............................................................................................................. 24
3.4 Population of the Study ................................................................................................... 25
3.5 Sampling and Sampling Size ........................................................................................... 25
3.6 Data Processing Procedure ............................................................................................. 25
3.7 Data Analysing Technique .............................................................................................. 25
3.8 Time Schedule .................................................................................................................. 26
3.9 Cost of Budget Schedule .................................................................................................. 26
REFERENCES ....................................................................................................................... 27

II
 LIST OF TABLES
Table 1 Time Schedule ............................................................................................................ 26
Table 2 Cost of Budget Schedule............................................................................................. 26

III
 ACRONYMS
CPA Certified Public Accountants

IA Internal Audit

IAF Internal Audit Function

IIA Institute of Internal Auditors

IPPF International Professional Practices Framework

MOFED Ministry of Finance and Economic Development

QAIP Quality Assurance and Improvements Program

SPPIA Standards for the Professional Practice of Internal Auditing

IV
 ABSTRACT
The overall objective of this study is aimed at describing and analysing the internal auditing
procedure and practice in case of Ethio-telecom in Dire Dawa branch. The absence of
proper internal auditing in the organization leads many problems. The absence of primarily
internal auditing in the organization will result in lack of continuous assurance service. The
second problem in achieving internal auditing practice is the degree of limited
independence of internal auditor since internal auditors are employees of company this
serve, they cannot achieved the certified public accountants (CPA) independence in fact.
First internal auditing is not practiced to the expectations of international standards by
many private and government organizations of Ethiopia. Second the internal audit function
needs to enhance its proficiency to have a positive impact on governance. The study tries to
assess the internal auditing procedure and practice in case of Ethio-telecom in Dire Dawa
branch. Data will be collected from both primary and secondary sources. The primary data
will be collected through unstructured interview and questionnaires and observation. The
secondary data will be collected from published material and manuals which are available
in the organization library and website. Regarding the sample, judgmental sampling of non-
probability will be used. The collected data will be analysed by using descriptive analysis
such as tables and percentages.

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 CHAPTER ONE
INTRODUCTION

1.1 Background of the Study

Internal auditing is an impartial, independent assurance and consulting activity that adds
value and improves the operation of a company. It aids businesses in achieving their goals by
implementing a systematic, disciplined approach to assessing and improving the efficacy of
risk management, control, and governance processes. Internal auditing is a catalyst for
improving an organization's governance, risk management, and management control by
providing insight based on analyses and assessments of data and business processes. Internal
auditing adds value to governing bodies and senior management as an objective source of
independent advice with a commitment to integrity accountability (Institute of Internal
Auditors, 2015).

Internal auditors don't have any statutory responsibilities; hence they don't have a specific
role. According to Aguolu (2017), an internal auditor's responsibilities are defined by the
management that appointed him or by an audit committee if one exists. They are responsible
for reviewing the data and information provided to management for decision-making
purposes.

The internal auditor is not responsible for establishing an internal control system. This is still
management's responsibility. Internal auditors, on the other hand, are expected to make
significant contributions in the establishment of a competent system of internal control,
which, once established, becomes his job to assure its efficiency and effectiveness. The
control system used in every economy has a significant impact on its development and
growth. Controls are necessary to ensure that money, materials, machinery, time, resources,
and manpower management are all optimized. Many companies, especially banks, use these
controls to see how effective and efficient they are with their resources (Ahlawat & Lowe,
2016).

Internal auditing is one of the most popular controls used to reduce waste and lead programs
toward completion. Auditing has been around for a long time, dating back to ancient Egypt
and the middle Ages' big mercantile establishments (http://www.audit theory). This
demonstrates that internal auditing cannot be overlooked or undervalued in today's economy,

1
as it arose from the intricacies of today's company atmosphere and transactions. Internal
auditing was regarded as valuable machinery in accomplishing a target judged accurate at a
given moment in time by other management of many significant company enterprises and
government concerns.

The word 'audit' comes from the Latin word 'audire,' which means he listens. This is because
an estate domain's account was examined by having those who compiled it called out to those
in charge. With the expansion of trade and commerce, a more accurate system of recording
commercial activities became necessary. Auditing is a process in which business entities'
books of account and vouchers (including charities and trusts) are subjected to critical
examinations by professionally qualified and independent account (Auditors) on such a level
of detail that they can form an opinion as to their truth and fairness. Auditing serves as a
bridge over the credibility chasm generated by managerial separation (Corama, et al, 2016).

Generally, the history of internal auditing in Ethiopia dated back to the 1940s just about the
time the profession is also evolving in Europe and in the United States (Lemma, 2016). In
addition, the internal audit service is currently being considered as a good contributor to
corporate governance. Recently, in developing countries, there has been increased interest
and more emphasis is placed on the IAF (Internal Audit Function) as one tool to crisis
prevention and enhancing good governance system of the public sector (Zeleke, 2017).
Therefore, the study will be focused on assessing the internal auditing procedure and practice
in case of Ethio-telecom Dire Dawa Branch.

1.2 Statement of the Problem

Nowadays, the internal audit profession is moving rapidly from the traditional transaction-
based approach to the new business-based (risk-based) approach. Also its culture is under a
continuous change and improvement. While the complexity of business activities becoming
more and more, its internal control systems should also be well strong and adequate to protect
the interests of the organization and its stakeholders. (Corama, et al, 2016).

The IIA provides internal audit professionals worldwide with authoritative guidance that
organized in the IPPF as mandatory guidance and recommended guidance. Conformance with
the principles set forth is required and essential for the professional practices of internal
auditing. Effective January 2017, The Internal Audit Standards Board (IIASB) has released
one of the mandatory guidance elements of IPPF, the revised standards of internal auditing.

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These standards together with the code of ethics encompass all mandatory requirements of
the IPPF. (Lemma, 2016).

The following cases more elaborate the existing internal audit practices and the related
research gaps that detected from review of the related literatures regarding Ethiopian private
and government owned organizations, and that derived the researcher‟s attention to dwell
much time and effort in the subject area.

The existing audit practices revealed that the internal audit practices did not comply with the
IPPF guidelines that promulgated by IIA (Tigabu, 2013). Most internal auditors undertake
their day to day internal audit activities traditionally and did not have profound knowledge of
the IPPF (Hamdu Kedir, 2014).

Internal auditing was not practiced to the expectations of international standards by many
private and government organizations of Ethiopia (Tigabu y., 2013; Teshay, 2016). Very few
researches have been done regarding assessing the practices of internal audit rather than
concentrating on the effectiveness of internal audit in Ethiopian organizations. Even though
there are some researches done on internal audit practice and audit effectiveness (Mihret &
Yismaw, 2007; Bethlehem, 2009; Mohammed, 2011; Shewamene, 2014; Tariku, 2015;
Weyneshet, 2017; Sisay, 2018;), as to the knowledge of the researchers, it seems that no
study appears to have been made in Ethio-telecom in Dire Dawa branch that exclusively
assess the Internal Audit Practice. Hence, filling the knowledge gap, this research attempts to
study the Internal Audit Practice and tries to suggest the possible solutions.

1.3 Research Questions

1. What is the nature and purpose of internal auditing in Ethio-Telecom Dire Dawa?
2. To what extent the management involve in the content of audit report?
3. Are the standards of internal auditing applied in practice in Ethio-Telecom?
4. What is the quality of internal auditing practices in Ethio-Telecom in terms of
competence, objectivity and independence?

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1.4 Objective of the Study
1.4.1 General Objective
The general objective of the study is to assess internal audit practices and procedures in
Ethio-Telecom, Dire Dawa Branch.

1.4.2 Specific Objective

1. To examine the nature and purpose of internal auditing in Ethio-Telecom, Dire Dawa
Branch.
2. To assess the extent of management involvement in the content of audit report.
3. To Examine whether the standards of internal auditing applied in practice in Ethio-
Telecom, Dire Dawa Branch or not.
4. To evaluate the quality of internal auditing practices in in Ethio-Telecom, Dire Dawa
Branch in terms of competence, objectivity and independence.

1.5 Scope of the Study

This study is only limited to the Ethio Telecom in Dire Dewa. The researcher evaluates the
Internal Audit Quality, Organizational Setting, Approved Audit Chartered, Management
Support, and Availability of Resources in the organization in order to judge how the Internal
Audit Practice appears in Ethio Telecom in Dire Dawa. The limitation of case studies is
generalization (Kothari, 2022). They can't be generalized in the traditional sense. Case
studies, by definition, cannot claim to be typical. Furthermore, because the sample is tiny and
idiosyncratic, and the data is largely non-numerical, there is no method to determine the
likelihood that the data is typical of a wider population (Hodkinson & Hodkinson, 2019).

The fundamental weakness of this study is that it is based in part on the internal audit
director's and internal auditors' assessments of the case organization. As a result, it is not
maintained that individual perceptions adequately assess the underlying reality that they are
supposed to represent. Furthermore, every single case study finding should be interpreted
with caution, as replication may be required before fully-fledged population inferences can be
drawn.

1.6 Significance of the Study

Internal audits are performed in a variety of legal and cultural situations, in companies that
vary in purpose, size, complexity, and structure, as a foundation of effective corporate

4
governance. It is also critical to ensure the appropriateness and adequacy of internal control
systems created by the organization's top management and Board of Directors in order to
meet the organization's objectives. The study aids Ethio Telecom's managers and Board of
Directors in recognizing Internal Audit processes and their impact on the company's
performance. The research also aids in the identification of areas of weakness and provides
constructive recommendations. Furthermore, by looking at the various described above, this
study adds value to the existing Internal Audit process that has been undertaken in Ethio
Telecom in Dire Dawa. In addition, the study is a valuable source document for future
academics with an interest in the subject.

1.7 Organization of the Study

The research will be expected to organize in to five chapters. Chapter one will briefly
introduces about the background of the study, statement of the problem, research questions,
and objectives of the study, scope of the study and organization of the study. Chapter two will
discuss the review of related literatures that contains both theoretical and empirical concepts.
Chapter three describes the methodology of the research emphasizing on the research design,
target population of the study, sampling design and size, data collection and instruments, data
processing and analysis while chapter four will discuss the data analysis, presentation and
interpretation. Finally, chapter five will contains summary of the findings conclusions,
recommendations and implications for future researchers.

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 CHAPTER TWO
REVIEW OF RELATED LITERATURE
This chapter presents an overview of the literature that relates to the topic under investigation
namely Internal Auditing Practices and Performance in Ethio Telecom Dire Dawa. This
chapter consists of overview of internal auditing, the history and evolution of internal
auditing, the roles of internal auditors, the roles of audit committee, development of the
Standards for the Professional Practice of Internal Auditing (SPPIA), agency theory and the
internal audit, literature sources which review internal auditing practices, elements of SPPIA
(2015), internal control system and performance of internal audit department.

2.1 Theoretical Review

2.1.1 Overview of Internal Auditing
Over the years, internal auditing has had different emphasis and roles. Previously, the
emphasis was more towards one-size-fits-all approach whereby audits were scheduled on a
cyclical, methodological basis, and auditors‟ role was reported against a checklist of existing
company policies and procedures to ensure that the internal controls of the company were
functioning well. Ever since, the role of internal auditor is only to reduce or to eliminate risk.
This practice may have been appropriate in times of slower development and not-so-rapid
technological evolution but they would not be applicable today since today‟s businesses rely
on sophisticated electronic technology in every aspect of their operations and they also
require timely information to make decisions regarding global operations. Internal auditing is
an independent, objective assurance and consulting activity designed to add value and
improve an organisation‟s operations (Sawyer & Dittenhofer, 2017).

Internal audit activities are performed in diverse legal and cultural environments; within
organizations that vary in purpose, size, and structures; and by persons within or outside the
organization (Sawyer, 2016). These differences may affect the practice of internal auditing in
each environment. However, compliance with the Standards is essential if the responsibilities
of internal auditors are to be met. Internal auditing dates from ancient times. The role of
auditors during that period was limited to providing validation services for governmental and
family units in order to prevent theft, fraud, and other malfeasance from the treasuries of the
ruler (Carmichael &Willingham, 2017).

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For auditing purposes, two persons were employed to check the accounts: one was the
internal auditor and the other was the external auditor (Felios, 2016). The usual technique
utilized by the auditors was to listen to the oral reports given by the appointed officials
responsible for financial matters. That is why the term “auditor” is thought to have been
derived from this “hearing of accounts”. This practice continued until it was replaced by
paper as the means to evidence financial transactions.

Internal auditing is an important element to management since it provides audit services for
managers at all levels including the board of directors and audit committee. Internal auditor‟s
responsibilities are assuring the integrity of financial and operational information and reports,
organization is complying with laws, statutes, policies, procedures and financial instruments
and is operating efficiently and economically, the goals and objectives of the company have
been accomplished and resources have been provided with; and also safeguarding the assets
of the organization. (Rezaee &Lander, 2015).

This means internal auditors‟ responsibilities are now broader and more demanding. Based
on these responsibilities, it is not difficult to observe how the internal auditing practices can
improve the company‟s corporate governance structure. In fact the revised definition of
internal auditing indicates that the scope of audit work includes evaluating and improving the
effectiveness of a company‟s governance process since the new internal auditing concept
expects the internal audit to function efficiently, effectively and economically the
organizational activities and controls besides assisting management in high-level decision-
making (Internal Auditors, 2015). Brodie (2016) however commented that generally
management has been rather slow to recognize the full value and potential of internal audit
experience even though there has been a steady improvement in the professional standing of
internal auditors. Therefore, there is a need for continuous effort to enhance the
understanding of the role of internal auditing and the benefits it can bring to the organizations
and to society as a whole.

2.1.2 The History and Evolution of Internal Auditing

Internal auditing was developed in the years between „1900 to 1950‟. However, it was not
until the late thirties and early forties that it became widely utilized. Brinks (1941) published
the first significant text on internal auditing. This publication served as a catalyst to bring
together in that same year the twenty-four founders of the Institute of Internal Auditors

7
(Cadmus, 2014). The Institute and the profession grew rapidly due, to a great extent, to the
pressing needs of World War II.

It was also during this period that internal auditors began to be more concerned with more
than a financial audit. Large organizations began to realise that the internal auditors can
perform a greater service than just looking for accounting errors. Thus, internal auditors
began to change to new concepts of auditing and focus upon improving operations rather than
just scouting for accounting errors. This new concept of auditing received management
acceptance because the recommendations made by internal auditors were more helpful than
those typically provided by external auditors; and, significantly, because findings remained
internal and were not made public. . (Setter, 2015, p.10)

Internal auditors adopted the term “operations” or “operational” auditing to describe their
new improved service. This term first came to the attention of internal auditors in an article
by Kent (2017). Basically, operational auditing uses an inductive approach in that it drew
from accounting documents recommendations for change that is it moved from the specific or
actual to the ideal. Internal auditors thus pioneered the concept of operational auditing.
However, during this same period a similar concept, called management auditing, was
developed in the literature of management. (Arens ALVin, 2015, pp. 767-769).

Benedict‟s (2017) followed Rose‟s work and his system offers to evaluate management by
means of weighted factorial analysis. Both writings by Rose (2016) and Benedict (2017)
represent the earliest attempts to develop an interview type management audit. The
management audit was organised around the functions of management and followed a
deductive approach as opposed to the inductive approach of operational auditing. These two
similar but separate concepts were the forerunners of today‟s movement toward the extension
of the scope of auditing.

2.1.3 Establishment and History of Internal Audit in Ethiopia

The emergence of Internal Audit as a discipline is traced to the early 1940s when the Institute
of Internal Auditors (IIA) was established in 1941 at Lake Mary, Florida, USA.
Subsequently, the Internal Audit profession has been growing globally under the global
leadership of the Institute of Internal Auditors (Soh & Bennie, 2016). The need to effectively
utilize funds in the public sector was the main cause for the rapid implementation of modern
audit practice in Ethiopia and to achieve this, the Office of the Audit General is formulated in

8
1961 by amending the office and auditors' duties and responsibilities. In 1987 and onwards
there were significant developments in public sector auditing systems. Besides, the coming of
Proclamation No. 13/1987 empowered the Office of the Audit General to direct the internal
auditors of government offices and public enterprises in three aspects that are; Whether
accounting records are properly maintained and reliable, Whether the assets of the ministries
and enterprises are adequately safeguarded and properly maintained; and Whether policies
and procedures laid down by top management are complied with the proclamations.
Nowadays, IA in Ethiopia is conducted mainly based on the IA standards that are developed
by the Ministry of Finance and Economic Development (MOFED, 2015).

These newly formed standards are similar to the standards of IIA. Currently, the government
has established different public enterprises by allocating a huge amount of capital. Due to this
significant money allocated to different corporations and other enterprises as capital, the
government needs efficient and effective financial management to function with
accountability and due diligence conforming to the specific rules and regulations and other
instruction appropriate to financial management. In this regard, developing the IA department
and supporting the staff so that they add value to their organization they belong to is one of
the best tools to ensure whether every organization meet their obligation as well as follow the
rules and regulations firmly at the time of doing their activities (Mihret & Yismaw, 2017)

2.1.4 The Roles of Internal Auditors

Internal auditors play a vital role in ensuring that an organization is efficiently run, morally
sound, technologically advanced, cognizant of the environment and other areas of concern,
and safe from unnecessary risk (Institute of Internal Auditors, 2015). Previous definitions on
internal auditing suggested by different authors also enhanced the roles of internal auditors.

Sawyer and Dittenhofer (2016) defined internal auditing as “a systematic, objective appraisal
of the diverse operations and controls within an organization to determine whether financial
and operating information is accurate and reliable, risks to the enterprise are identified and
minimized, external regulations and acceptable internal policies and procedures are followed,
satisfactory standards are met, resources are used efficiently and economically, and
organization‟s objectives are effectively achieved”.

In the revised Statement of responsibilities of Internal Auditing issued by the Institute of

Internal Auditors (2016) as part of the Standards framework, the section on objectives states:

9
“The objective of internal auditing is to assist all members of management in the effective
discharge of their responsibilities by furnishing them with analyses, appraisals,
recommendations and pertinent comments concerning the activities reviewed. The internal
auditor is concerned with any phase of business activity where he can be of service to
management. This involves going beyond accounting and financial records to obtain a full
understanding of the operations under review”.

With reference to these objectives, Sawyer (2016) noted four benefits managers have gained
from internal auditing assistance. These benefits were providing managers with the bases for
judgement and action, helping managers by reporting weaknesses in control and performance
and in recommending improvements, providing counsel to managers and boards of directors
on the solutions of business problems, and supplying information that is timely, reliable and
useful to all levels of management.

Additionally, the Statement sets forth the types of services that should be performed and the
kinds of activities carried on by the internal audit function in attaining the overall objective.
Internal auditors should first review and appraise the soundness and adequacy of the
accounting, financial, other operating controls, and promote effective controls at reasonable
cost. Secondly, the internal auditors should ascertain the extent of compliance with
established policies, plans, procedures, laws and regulations, which could have a significant
impact on the company‟s‟ operations. Then the internal auditors review the means of
safeguarding assets and when appropriate, verify the existence of such assets and appraise the
economy and efficiency with which resources are employed. Lastly, the internal auditors
review operations or programs to ascertain whether results are consistent with established
objectives and goals and whether the operations or programs are being carried out as planned
(Engle T.J, 2016).

Reviewing and evaluating the adequacy and effectiveness of an organisation‟s internal

control system and the quality of performance in carrying out assigned responsibilities is
representative of several primary core activities of internal audit work. The purpose of the
review of the adequacy of the internal auditing is to ascertain whether the established system
provides reasonable assurance that the organisation‟s objectives and goals will be met
efficiently and economically (Atkinson, 2015).

Adequate control is considered to be present if administrative management has planned and

organised in a manner, which provides reasonable assurance that the organisation‟s objectives
10
and goals will be achieved efficiently and economically. Reasonable assurance is provided
when cost –effective actions are taken to restrict deviations, such as improper or illegal acts,
to a tolerable level. The role of internal auditing in the review of effectiveness of the system
of internal control is to ascertain whether the system is functioning as intended Effective
control is present when the administrative management directs the system in such a way as to
provide reasonable assurance that the organisation‟s objectives and goals will be achieved.
The purpose of the review for quality of performance is to ascertain whether the
organisation‟s objectives and goals have been achieved.

The primary objectives of an organisation‟s system of internal control are to provide

administrative management with reasonable assurance that financial information is accurate
and reliable; the organisation complies with policies, plans, procedures, laws, regulations and
contracts; assets are safeguarded against loss and theft; resources are used economically and
efficiently; and established objectives and goals for operations or programs can be met.
Internal auditing focuses on an evaluation of this system or framework of internal control.
(Braithwaite, G., 2016).

A second type of audit work that internal auditors are guided to perform is reviewing the
accuracy and reliability of financial and operating information and the means used to identify,
measure, classify and report such information. Information systems provide data for decision-
making, control, and compliance with external requirement. Therefore, internal auditors
should examine information systems and determine whether financial and operating records
and reports contain accurate, reliable, timely, complete and useful information, and controls
over record keeping and reporting are adequate and effective. The performance of reviews of
the systems established to ensure compliance with policies, plans, procedures, laws,
regulations and contracts represents a third elements of audit activity described by the
Standards. Administrative management is responsible for establishing the systems designed
to ensure compliance with such requirements as laws, rules, regulations, policies and
procedures. The internal auditor‟s role is to determine whether the systems designed by
management are adequate and effective and whether the activities audited are complying with
the appropriate requirements. (Bigg and daves, 2016, P.53)

Further, as described by the Standards, the internal auditor‟s role includes providing
appraisals with recommendations regarding administration management established
objectives and goals for operations and programs. (Hourd F. Settler, 2017, p. 354).

11
Acting as a monitoring agent, the internal auditor is expected to perform two interrelated
functions, auditing and consulting. These are performed to maintain reliability of financial
statements, prevent occurrence of irregularities and enhance effectiveness and efficiency of
operations (Neuman, 2015). Thus, the demand for internal auditing is presumed to arise due
to an accountability relationship between two (or more) parties (e.g. top management vs.
board member) (DeAngelo, 2016; Evans, 2015).

2.1.5 Types of Audits Performed by Internal Auditors

Internal Audits are conducted for different reasons and with varying objectives and with each
type of risk exposure an organization would need to conduct a particular type of Internal
Audit. Some audits are required by regulation or policy, while others are requested by
management to help improve processes or identify internal control weaknesses. According to
(Adukia, 2016), the major types of Internal Audits are hereunder.

A, Operational Audit- An operational audit evaluates the performance of a particular

function or department to assess its efficiency and effectiveness. Financial data may be used,
but the primary sources of evidence are the operational policies and achievements related to
organizational objectives. Internal controls and efficiencies may be evaluated during this type
of audit. Some areas of operational audits include organizational structure, processes and
procedures, the accuracy of data, management, and security of assets, staffing, and
productivity.

B, Compliance Audit- A compliance audit evaluates an area‟s adherence to established laws,

standards, regulations, policies, and/or procedures. Compliance audits are done because of a
policy or statutory requirement. While the audit is done for regulatory reasons, the objectives
are still to ensure adequate control over an important internal process.

C, Financial Audit-A financial audit is a historically oriented, independent evaluation

performed to attest to the fairness, accuracy, and reliability of financial data. The central
objective is to ensure that the financial activity of the department, unit, or area is completely
and accurately reflected in the appropriate financial reports.

D, Follow up Audit-these are audits conducted approximately six months after an internal or
external audit report has been issued. They are designed to evaluate corrective action that has
been taken on the audit issues reported in the original report. The purpose of a follow-up
audit is to revisit a past audit‟s recommendations and management‟s action plans to

12
determine if corrective actions were taken and are working, or if situations have changed to
warrant different actions.

E, Investigative Audit-This is an audit that takes place as a result of a report of unusual or

suspicious activity on the part of an individual or a department. It is usually focused on
specific aspects of the work of a department or individual. Investigations are conducted to
determine the extent of loss, assess weaknesses in controls, and make recommendations for
corrective actions.

E, IT Audit an Information Technology (IT)audits-evaluates controls related to the

institution‟s automated information processing systems. The information technology audit
function develops audit programs to assess, evaluate, and make recommendations to
management regarding the adequacy of internal controls and security inherent in
organization‟s information systems, and the effectiveness of the associated risk management.
The goal is to ascertain that IT systems are safeguarding assets, maintaining data integrity,
and efficiently operating to achieve business objectives.

F, Management Audit- Also called the performance audit, are internal consulting projects.
Because an internal audit is an activity independent of management, it is often an excellent
resource to provide independent and objective insight on the efficiency of business processes.
Management can request internal auditors to review a business process, organization, or
strategy; and the auditors do not have to worry about backlash from management. A common
management audit is a review of organizational structure, such as having an internal audit
look at how administrative work is divided among divisions and if there are opportunities to
be more efficient.

Other types of internal audits would include the integrated audit, which is a combination of
the IT Audit and the Operational Audit.

2.2 Empirical Reviews

The main aim of this research is to assess the practice of Internal Audit in the views of
different authors and the researcher‟s ideas and recommendations regarding the related topic
of internal audit.

In Ethiopia, different studies have been conducted on IA Effectiveness (IAE). Such as

(Mihret & Yismaw, 2017), (Mihret & Woldeyohannis, 2018); (Mihret et al., 2018);

13
(HaileMariam, 2014). (Mihret & Yismaw, 2017) studied on IAE by using Ethiopian higher
educational institutions as a case study. They have formulated a model with audit quality,
management support, organizational setting an attribute of the audits as an attribute of IAE.
The finding revealed that internal audit quality and management supports are the main factors
that influence IAE. In contrast, organizational setting and audits attributes haven‟t significant
impact on IAE.

Besides (Mihret& Woldeyohannis, 2018) conducted a case study research in an Ethiopian

public sector. This study assessed the value-adding role of the Internal Audit Function in an
Ethiopian public sector. The value-adding role of the Internal Audit function is determined by
the perception of audits and internal auditors. They found that the traditional/ compliance
audit is dominant in the organization under study in contrast to value-added auditing. Internal
Audit Effectiveness, on the other hand, stands for the function's capability to achieve the
objectives of the function.

Similarly (Mihret et al., 2018) examines factors that are associated with the attribute of IAF.
He used analytical survey responses of 188 CIA and internal auditors from ministers, state-
owned enterprises, and private companies. He founds that in organizations where the role of
IA is clearly defined, high-risk profile and IA is highly linked with external audit has good
internal audit quality.

(HaileMariam, 2014) also studied on “Determinants of internal audit effectiveness in the

public sector offices”. The researcher founds that management support, adequate and
competent internal audit staff, and the presence of an approved charter has a positive and
significant impact on IAE. On the other hand management perception and organizational
independence has a positive relationship but they have no significance to IAE.

(Kedir et al., 2014) in their article entitled Internal auditing standards and its practice the case
of East Arsi Zone, Ethiopia presented the result of their case study that evaluated the current
practices of internal auditing in the internal audit departments of 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 comparison. The result of the study showed that the scope of the Internal
Audit function in the enterprises surveyed did not yet go far from the traditional practices and
14
much time is devoted to performing financial and compliance audits. Regarding the quality
assurance program, none of the respective public enterprise‟s audit departments have quality
assurance programs. Thus, the researcher concluded that the selected public enterprises
should be able to develop quality assurance programs.

Fekadu Bethlehem, (2017) ,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 institution's
internal audit practices. The study was done on four universities, Adama, Hawassa,
Haramaya, and Addis Ababa Universities. Seven Internal Auditors who were selected using
convenience sampling techniques were used as the data source and open-ended and closed-
ended questionnaires were used as data gathering tools. Then qualitative approaches were
employed to analyse 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
resourced that 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 assessment processes as required. Proper management commitment and other
organizational factors were critical factors influencing the 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 the effectiveness of IAF in the respective universities. To alleviate
those problems, it was recommended that management and the audit division of the
respective universities have to work jointly to improve the IAF of their respective universities
as per requirements of international standards (Fekadu Bethlehem, 2017).

Tsegaye, (2018) conducted research on The Internal Audit practices in private commercial
banks of Ethiopia with a general objective of assessment of internal audit practice. The
research was focused on five private banks that were selected by using the purposive
sampling technique. The qualitative and quantitative data types were applied in the study.
And the data were collected by using questionnaires and document review. The result
revealed that, the current practices of Internal Audit in Private Commercial Banks of Ethiopia
through taking the Mandatory Guidance requirements of IPPF as a benchmark could be
summarized into three groups: components of standards that fairly complied, did not
15
adequately comply, and poorly (below the expectation) complied within the selected private
banks. The existing healthy conformance with certain mandatory Guidance requirements of
the IPPF should be kept up and goes to the sound conformance level by all elements. And
lastly, it was attached with poor/below the expectation/ conformance, the Quality Assurance,
and Improvements Program standard. The researcher recommended that the existing
inadequate conformance have to make improvements until it satisfies the needs of all
stakeholders; and, the Quality Assurance and Improvements Program (QAIP) standard;
should be carried out properly by all Private Commercial Banks of Ethiopia were the given
ways to curve all unsatisfactory conformances of the mandatory guidance requirements by
private commercial banks of Ethiopia.

Mulugeta, (2018) conducted research on Internal Audit: Reporting Relationship in Ethiopian

Public Enterprises With objectives of analysing the reporting line of internal audit and
investigate its relationship with internal audit scope, independence, good governance, and
audit committee. He conducted the survey study on selected Ethiopian public enterprises and
recommended possible ways to cope up with the problems identified in the research to
promote the good image of the Internal Audit profession. The results of the survey showed
that the functional reporting lines in practice were not always organized according to the
theoretical assumptions, particularly in ETC (at Zonal and regional level) and Zequala steel
rolling Factory; internal audit has been seen as outside the management structure (outsider)
and board members are ministers who have several other responsibilities so that they do not
have sufficient time to deal with the oversight of the internal audit function; the Ethiopian
public enterprise's Internal Audit scope is more limited on the verification of financial
transaction (Financial audit), Compliance audit, assessments of internal control, and fraud
investigation. The researcher finalized his study by recommending corrective actions to
address the weaknesses identified. (Ali, 2011)has conducted research on Internal Audit and
risk assessment in Ethiopian public enterprises with a general objective of seeing internal
audit function‟s contribution to risk assessment. This research paper examined internal
auditing and risk assessment in the Ethiopian public enterprise context using 20 purposefully
selected public enterprises. A mixed research approach is used and the data were collected by
using questionnaires and document review. Results of the survey showed that all public
enterprises have an Internal Audit function that performs; operational audit which requires
most resources and compliance audit as a second important audit type; the amount of audit
resources devoted to risk assessment reveals the relative relevance of each kind of activity.

16
Results of the research showed that many Ethiopian public enterprises had introduced a
formal risk assessment process in their internal audit function, and few enterprises were on
the way to introduce a formal risk assessment process. Hence, the research recommended that
internal audit functions that did not incorporate control risk self-assessment will be better off
by incorporating it as part of the scope of operation of their respective IAAs for effective risk
assessment. Thus, this study will be beneficial in terms of the decision making of the board of
directors, audit committee of the organization, and other regulatory bodies The researcher
critically reviewed and analysed different kinds of literature that are related to this research.
In order to present the assessment of Internal Audit Practice in the Insurance industries, that
literature easily understands the factors that assess the Internal Audit Practices, such as
Internal Audit Quality, Organizational setting, Approved Audit chartered, Management
support, and Resource availability are sequentially presented hereunder.

2.2.1 The Internal Audit Quality

Internal Audit quality requires auditors to carry out their role objectively and in compliance
with accepted criteria for professional practice, such that internal audit activity will evaluate
and contribute to the improvement of risk management, control and governance using a
systematic and disciplined approach (Chartered Institute of Internal Auditors, 2017). This is
important not only for compliance with legal requirements but because the scope of an
auditor‟s duties could involve the evaluation of areas in which a high level of judgment is
involved. Greater quality of IA work understood in terms of compliance with formal
standards, as well as a high level of efficiency in the audit‟s planning and execution will
improve the audit‟s effectiveness.

Internal Audit quality is a function of the level of staff expertise, the scope of services
provided, and the extent to which audits are properly planned, executed, and communicated
(Mihret & Yismaw, 2017).Adequate staffing is essential for a system to its full capability.
Weakness in staffing can lead to mismanagement, error, and abuse, which can refute the
effect of other controls (MOFED, 2017). The size of IA staff and the competency of internal
audit are the critical characteristics of IA quality that can‟t be separated. This means at the
absence of one dimension the other cannot contribute to the quality of internal auditors. The
empirical findings by (Al-Twaijry et al., 2014), based on questionnaire and interview
responses from internal and external auditors, working in Saudi Arabia, suggest that the
external auditors believe that IAF size is an important indicator of its quality. In addition, the

17
large size of the IA staff has many benefits for the internal operations of the IA unit. For
instance, in larger-sized functional units, there will be more opportunity and flexibility to
have a staff rotation schedule that can also influence IA effectiveness by promoting a more
healthy relationship and resulting in more objective audit investigations.

2.2.2 The Organizational Setting

Organizational setting refers to the organizational profile, internal organization and budgetary
status of the Internal Audit Department; and also the organizational policies and procedures
that guide operation of audits. According to (Mihret & Yismaw, 2017) the organizational
setting in which internal audit function operates has significant influence on the effectiveness
of the function. The Internal Audit Department should be given sufficiently high status in the
organizational structure to enable better communication with senior management. In addition,
it requires having favourable internal departmental organization to ensure independence of
internal audit from audits.

2.2.3 The Internal Audit Charter

Internal audit charter is defined by the IIA as “a formal written document that defines the
activity‟s purpose, authority and responsibility. The charter should be (a) establish the
internal audit activity‟s position within the organization; (b) authorize access to records,
personnel and physical properties relevant to the performance of managements; and (c)
defined the scope of internal audit activities”(Chartered Institute of Internal Auditors, 2017).
Additionally, an internal audit charter typically includes the responsibilities of the IA in broad
terms, the standards followed by the IA; and the relationship between the IA and the audit
committee. It may also defines access to the information (documents, records, systems, and
personnel) necessary to perform and reach conclusions on the work, and it is a vehicle for
asserting that there are no unreasonable limitations on the scope of the auditor work.
According to (Van Peursem, 2005), the presence of a strong Charter adds an official and
respected layer of authority to the position of Internal Audit in the company. It is also an
important feature of insuring success in achieving the independent status of an Internal Audit.
Furthermore, according to (Van Peursem, 2005), the existence of audit charter in organization
influences senior management to flow the recommendations of the internal auditor
(Hailemariam, 2014).

18
2.2.4 The Management Support
Management support is expressed in terms of supporting the auditing process by fulfilling the
necessary resources, finance, transport if required, providing training, introducing auditors
with new technology and procedures, budgeting funds for certification and other facilities
that facilitate the internal auditing works. Management support has a far-reaching
consequence on IA effectiveness in organizations. For example, (Mihret & Yismaw, 2018) in
their case study of IA effectiveness on public sector shows that the component of
management support consists of the response to audit finding and the commitment to strength
internal audit which has significance influence on IA effectiveness. Given the fact that
internal audit activities are performed in dynamic management process and more supportive
environment, internal auditor expects senior management to take the first steps to support the
IA process. Because, (Sarens & Beelde, 2016) argue that the overall acceptance and
appreciation of IA within the company is strongly dependent upon the support they receive
from senior management. Internal audit actively seeks management support with resources,
commitment to promote and communicate their added value. The management support is
almost crucial to the operation and internal audit; because all other determinants of IA quality
derive from the support of top management, given that hiring proficient IA staff, developing
career channels for IA staff, and providing organizational independence for IA work are the
results of decisions made by top management (Cohen & Sayag, 2010). This means it is the
interest of management to maintain a strong internal audit department (Mihret & Yismaw,
2017).

2.2.5 The Resource availability

To perform the audit activities the management of the organization should implement
sufficient amount of resources in terms of time, budget and staff. The audit department must
have sufficient funding relative to the size of its audit responsibilities. This important element
should not be left under the control of the organization under audit, because the budget
affects the audit function‟s capacity to carry out its duties (Chartered Institute of Internal
Auditors, 2017). The Internal Audit Department needs to have adequate resources to achieve
its objectives (Arena & Azzone, 2009); (Mihret & Yismaw, 2018). Assessing the sufficiency
of resources should generally include comparisons with similar organizations, the business
risks, and the degree of change within the organization. According to the Institute of Internal
Audit, insufficiency of internal audit resources may be an indication for; management does

19
not respect the role and contribution of internal audit, management includes internal audit in
general under-funding to meet short term forecasts, management diverts internal audit
resources to meet short-term goals, operational crisis, and special projects. Lack of authority
for budget administration adversely influences the performance of the internal audit function
(Mihret & Yismaw, 2018). Hence the function needs to administer its own budget.

2.3 Summary
Researches were previously conducted regarding Internal Auditing related topics like
Effectiveness, Challenges, and Determinant factors at various Public sector and private
organizations in Ethiopia. From the above discussion, the majority of the previous studies
were concentrated on the Effectiveness of Internal Audit in various organizations in Ethiopia.
Prior literature regarding IA effectiveness was made through either quantitative or qualitative
methods (Mihret et al., 2017) ;( AbuAzza ,2015). The study expects to expand the limitation
in the literature regarding the research method through the study in mixed-method research
(AbuAzza, 2014). There is a limitation of literature on the area of practice of IA in Ethiopia
especially in the case of Ethiopian Insurance Corporation. So, the study contributes to the
existing literature regarding the practice of IA in the government-owned Insurance Company.
There is a limitation on research conducted concerning Internal Audit Practices. Some
researchers advocated further research and the need for a more comprehensive study on the
issue of Internal Audit Practice. As well, since to-date, no research has been done by paying a
special attention to assess the practices of Internal Audit in study area by taking additional
factors and using mixed research method. Therefore, this study attempts to fill the gaps by
assessing the practice of Internal Audit in Ethiopian Insurance Corporation with the variables
Internal Audit Quality, Organizational Setting, Approved Audit Chartered, Management
Support, and Resource Availability by using mixed research method and primary and
secondary data collection techniques.

20
 CHAPTER THREE
RESEARCH METHODOLOGY

3.1 Study Area

This study will be conducted internal auditing procedure and practice in case of Ethio-
telecom in Dire Dawa branch.

3.2 Research Design and Approach

According to Kothari (2016), research design is the arrangement of condition for
collection and analysis of data in a manner that aims to combine relevance to the research
purpose with economy in procedures. It is the blueprint for collection, measurement
and analysis of data. Burns & Bush (2016) stated that research design can be used for
three purposes; these are descriptive, exploratory, and explanatory.

The types of research employed under the study would be mainly descriptive type of
research. Descriptive research is a process of systematically describing and analyzing
something‟s features, properties or characteristics. Descriptive research provides
numerical descriptions that identify what the thing being studied looks like in terms of its
size, location, and frequency. Burns & Bush (2016), the following is the advantage of
descriptive research design

 One of the biggest advantages of descriptive research is that it allows you to analyze
facts and helps you in developing an in-depth understanding of the research problem.
 Another benefit of descriptive research is that it enables you to determine the behavior
of people in a natural setting.
 In such a type of investigation, you can utilize both qualitative and quantitative
research methods for gathering facts.
 Descriptive research is cost-effective and quick. It can also be used for many different
purposes, which makes it a very versatile method of gathering data.
 You need less time for performing such types of research.

21
From that advantage of descriptive research design, I choose descriptive from the others.
Indeed this study describes and critically assesses that encountered in assess internal auditing
procedure and practice in case of Ethio-telecom in Dire Dawa branch.

Research approach is the general framework for the study that links, knowledge claims,
strategies of enquiry, specific methods and implicitly reflects the researcher attitude as to how
knowledge is constructed and commands what method to be employed in the study. As noted
in (Creswell, 2017). Thus, the study is a quantitative research where relied on the
measurement of quantity or amount plus it helps the researcher to express phenomena in
terms of quantity and involves the generation of data in measurable form which can be
subjected to rigorous quantitative analysis in a formal and rigid fashion (Kothari, 2016). In
addition, quantitative research generates statistical data through the uses of large-scale survey
research, using predetermined instruments such as close-ended questionnaires and/or
structured interviews to collect data and can be analysed using statistical procedures to test
objective theories through examining the relationship among variables. Moreover, it is
advantageous as it procedurally, follow scientific approach, tests reliability and validity of the
instrument to minimize researcher‟s biasedness by employing large sample size. Hence the
results can be believed and generalized to larger population (Dawson, 2016; Creswell, 2017).
Thus, the study will be used mixed methods approach because of the following advantage

1. It provides a more complete and comprehensive understanding of the research

problem than doing it separately.

2. It provides a better focus by developing better and more specific instruments

according to the research context.

3. Helps explain findings or how causal processes work.

4. More precise perspective of the phenomenon (comprehensive, complete and holistic).

Indeed a mixed approach method that involves a two-phase project in which the researcher
collects quantitative data in the first phase, analyses the results, and then uses the results to
plan (or build on to) the second, qualitative phase. The quantitative results typically inform
the types of participants to be purposefully selected for the qualitative phase and the types of
questions that will be asked of the participants. The overall intent of this design will be to
have the qualitative data help explain in more detail the initial quantitative results.

22
The case-study method will be used in this research because a case study is applying an
exhaustive approach which is the researcher focuses on only one specific instance of the
phenomenon to be studied. It is also only an instance to study the original or phenomenon in
depth. Case study as a research method by (Zainal, 2016), stated that a case study allows the
exploration and understanding of complex issues. It can be considered a strong research
method particularly when a holistic, in-depth investigation is required. A case study offers an
opportunity to study a particular subject, and it enables the use of multiple data sources to
cross-validate results through triangulation (Soy, 2016). Thus, the case study design enables
using a flexible research approach by using multiple sources of data involving document
review, interview, and questionnaires and using both qualitative and quantitative analysis
techniques (Almalki et al., 2016).

3.3 Data Collection Instrument

Qualitative methodology will be used with the qualitative phenomenon (Kothari, 2014). In
this aspect, the researcher will be gathered the data through interview and document review
utilization. To enhance the quality of data through triangulation Primary and secondary
sources will be used. Primary sources of data will be including interviews and questionnaires,
whereas the secondary source of data will be through a review of relevant documents.

3.3.1 Interview
The reasons for conducting an interview is, to collect information that is unique and to obtain
information that is unable to gather by the researcher through other methods (Stake, 2015).
Therefore, the researcher will made an interview to support the quantitative aspect and to
collect additional information which is going to be difficult to collect through a questionnaire.

The qualitative data collection method through the interview in this study followed semi
structured interviews. Using a semi-structured interview is best to understand the relationship
between variables (Saunders et al., 2016). To this aspect, the researcher can be flexible to
gather additional information. The interview guide developed by (Abu-azza et al., 2015) is
adapted to this study. It relates to the research objective of the study. The interview guide
consists of five sections. The first section is composed of questions which are about the
Quality of IA; the second group is composed of questions which are about the Organizational
Setting; the third group asks questions which are deals with the Approved Audit Charter; the
fourth group is composed of questions which are about management support and the fifth

23
group is composed of Resource availability in the Internal Audit Department. Therefore, a
Semi-structured interview with the Internal Audit Director of the Ethiopian Insurance
Corporation will be conducted. It is used to understand the way that Internal Audit Practice
looks like.

3.3.2 Document Review

Document review is relevant to enhance the quality of finding through quantitative methods
and support the interview data (Leedy & Ormrod, 2015). This technique is the most means of
gathering data to make the study rich in information. The review of relevant documents helps
the researcher to understand the key facts of the organization. It is also used by prior Internal
Audit researchers (Abu-Azza, 2012; Mihret, 2017). This method of data collection will be
adopted to gather information from documents held in the organization concerning the
practice of Internal Auditing. Those documents reviewed are IA reports, plans, programs,
working papers, organizational chart, IA department chart, all served as a means of
generating secondary data.

3.3.3 Questionnaire
A questionnaire is a series of questions asked to individuals to obtain useful information
about a given topic. When properly construct and responsibly administer, questionnaires are a
vital instrument by which statements can be made about specific groups of people or entire
populations. Questionnaires are frequently used in social research. They are a valuable
method of collecting a wide range of information from a large number of individuals, often
referred to as respondents. Adequate questionnaire construction is critical to the success of a
survey. Inappropriate questions, incorrect ordering of questions, incorrect scaling, or bad
questionnaire format can make the survey valueless, as it may not accurately reflect the views
and opinions of the participants. A useful method for checking a questionnaire and making
sure it is accurately capturing the intended information is to pre-test among a smaller subset
of target respondents. The questionnaire will contain both closed-ended and open-ended
questions. The open-ended questions allow the respondents to share as much information as
possible in an unconstrained manner. The closed-ended questions, on the other hand, involve
“questions” that will answer by simply checking a box or circling the proper response from a
set of options that will provide. While the closed-ended questions allow for easier analysis of
the data due to standardized questions, their main limitation is that they allow the researcher
to determine only what the respondents are doing and not how or why they are doing it. A

24
self-administered questionnaire was distributed to all Internal Auditors at the head office in
the case organization. The response helps to understand the opinion of Internal Auditors
about the practice of Internal Audit in Ethiopian Insurance Corporation. The data collection
instrument developed by (Abate, 2017) (Berehe, 2016); (Bisrat, 2019); (Hawa, 2016); with
modifications was used. It requires respondents' level of agreement on the practice of Internal
Audit. In this research one of the ordinal measures called the “Five Point Likert Scale” will
be used. A Likert scale consists of a series of evaluative statements concerning an attitude
object; respondents are asks to rate the object on each statement using a five-point includes
Strongly Agree 5, Agree 4, Neutral 3, Disagree 2, Strongly Disagree 1.

3.4 Population of the Study

The research target populations are all employees working in Ethio Telecom Internal Audit
Department. The total numbers of participant are 22 among the 22 respondents, all
questionnaires will be collected. To reach a meaningful conclusion, no need to take the
sample, as they are already few in numbers to collect the overall information.

3.5 Sampling and Sampling Size

Ethio Telecom has total population of 22, out of these total population 16 of employees are
male and the remaining 6 employees are female, since the total population of the department
is small, the researcher will use censes sampling method, a censes study will be reliable
whenever the population of the organization relatively small so, the researcher will take all
the population that exist in the organization as a sample size.

3.6 Data Processing Procedure

The analysed data will be described and summarized by using the descriptive statistical
method particularly by measure of central tendency (mean) values, frequency, percentage,
measure of central dispersion (standard deviation). Then, the results of the study will be
presented by using various tables.

3.7 Data Analysing Technique

The data collection through the questionnaires and interview will be organized and analyzed.
The data that gained from the questionnaires and interview will be analyzed quantitatively
and qualitatively respectively. Hence, before analyzing these data, the researcher is properly
checked for the completeness of the data and rearrange and organize them under each of the

25
 research objectives of the study. Once it is over, the researcher used Manual methods of data
analysis like tabulation and percent to analyze the quantitative information gathered from the
primary sources. Finally, based on the analysis, conclusion and recommendations would be
forward.

3.8 Time Schedule

Table 1 Time Schedule

Time
No. Activities Oct
Oct, Oct, Oct, Oct, Oct, Oct,
, Nov
W1 W1 W2 W2 W3 W3
W4
Topic Selection and
1
Defense

2 Proposal Development
Proposal Defense and
3
submission

4 Field visit

5 Data Collection

6 Data analysis

7 Report Writing

8 Thesis submission

9 Thesis defense

3.9 Cost of Budget Schedule

Table 2 Cost of Budget Schedule

Description Measurement Quantity Price per unit Total price in birr

Unit
Paper Pack 2 110 220
Pen Pack 6 5 30
Printing Page 150 3 450
Transport - 200
Refreshment 300
Miscellaneous Expense 200
Contingency 300
Total cost 1,700.00

26
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