DEBRE TABOR UNIVERSITY

FACULTY OF BUSINESS AND ECONOMICS

DEPARTEMENT OF ACCOUNTING AND FINANCE

ASSESSMENT OF INTERNAL AUDITING PRACTICE (A CASE STUDY ON

AWASH INTERNATIONAL BANK DEBRE TABOR BRANCH)
BY:
ABRARAW MOGES, ID NO ACC (SUM) 103/08
KINDALEM GEDEF, ID NO ACC (SUM) 131/08

A RESEARCH PAPER SUBMITTED TO DEPARTMENT OF ACCOUNTING IN

PARTIAL FULFILLMENT OF THE REQUIREMENT FOR BACHELOR OF ART
(B.A.) DEGREE IN ACCOUNTING AND FINANCE

ADVISOR: WORKNEH M. (MSC)

SEPT, 2021
DEBRE TABOR, ETHIOPIA

I
 Abstract
The main objective of the study is to assess internal audit practice in Awash international bank at Debre
Tabor branch. To achieve this objective, the researchers was used qualitative and quantitative data type.
And primary data source was used. The primary data are to be collected through interviews and
questionnaires. The researchers selected 20 target population in order to conduct this research to assess
internal audit practice in selected bank. The researcher was used judgmental sampling technique to select
respondents from the entire population. Finally, on the collected data descriptive analysis had been made
there analysis to support by tables and percentage used and the analyzed data had been interpreted using
inferential analysis and the conclusion of the study to deducted from at he analyzed data. The reliance on
the level of internal audit work medium i.e. 64.28%, therefore we can conclude that, even though the bank
has internal auditing practice highly its application is medium. The quality of internal audit work depends
on adequate and relevant as required by auditing standard. And quality of internal auditor Function. The
table show that majority of respondents agreed with the statement that internal auditor in AIB Debre tabor
Branch was Free from conflicting of auditors which is 50% responses. The internal auditors in Awash
International Bank, Debre tabor Branch are exercising due professional care in performing audit work are
9 out of the 14 respondents which 64.2%. From this it is possible understand that internal auditors in
Awash International Bank in Debre tabor Branch have objective. In other words, this objectivity increases
the extent of reliance on internal audit practice. The researchers understands that, there is no potential and
actual conflict of interest and the internal auditor should not be expected to report to the manager. The
existence of stable worker in any company in cases of the adoptability of the work and hence increases the
quality of audit work.

Key words: - auditing, auditor, internal auditing

i
 Acknowledgment

First and foremost, we would like to thanks my Almighty, GOD and his mother st, marry for giving ours
strength to finish the paper and second we would like to express our deep gratitude and appreciation to our
senior essay advisor Workneh Mengist (MCS) for his constructive suggestions, guidance and unreserved
support. Third we would thanks to Debre Tabor University college of Business and Economics Department
of Accounting and Finance Head Mr. Birhan Moges (MCS) and Awash International Bank Manager Ato
Kasahun Ashene and The internal auditor Ato Ayenew Ayalkibt which they give moral support give
tangible evidence to help us for our finding ,fourthly our gratitude is also to all the staff members whose
know internal auditor for their endless cooperation in providing necessary information, materials which was
very important for the accomplishment of this research and full filling the research questionnaire. The last
but not the least we would like to thank our family.

ii
Table of Contents
Abstract...............................................................................................................I
Acknowledgment..................................................................................................II
Table of content………………………………………………………………………………………………………………………………… … III

List of table.....................................................................................................IV
CHAPTER ONE...................................................................................................1
INTRODUCTION.................................................................................................1
Background of the study.........................................................................................1
1.1. Statement of the problem.............................................................................................................2
1.3. Objective of the Study................................................................................3
1.3.1. General Objective...................................................................................3
1.3.2. Specific Objective....................................................................................3
1.4 Significance of the Study....................................................................................4
1.5. Scope of Study................................................................................................4
1.6. Limitation of the Study.....................................................................................4
1.7. Organization of Study.......................................................................................5
CHAPTER TWO..................................................................................................6
LITRATURE REVIEW..........................................................................................6
2.1. Definition of Internal Auditing............................................................................6
2.2. Historical development of Initial Auditing..............................................................6
2.3. Internal Auditing in Ethiopia.....................................................................7
2.4. Objective of Internal Auditing.............................................................................7
2.5. Meaning of Internal Auditing..............................................................................8
2.6. Internal Audit Function.....................................................................................8
2.7 Characteristic of Internal Audit............................................................................9
2.8. Internal Auditing Role in Control.........................................................................9
2.9 Independence, Objectivity and Compliance.............................................................9
2.10. Responsibility of Internal Auditor.....................................................................10
2.11. Applicability of Internal Auditing.....................................................................10
2.12. Barriers to Successful Audit Result...................................................................10
2.13. Audit reports...............................................................................................11
2.14. Contents of Report.......................................................................................11
2.15. Format of Report..........................................................................................12
CHAPTER THREE.............................................................................................12
Methodology......................................................................................................12
3.1. Study area....................................................................................................12
3.2. Types of data and source.........................................................................12
3.3. Method of data collection.................................................................................13
3.4. The sample design.........................................................................................13
3.5. Data analysis and presentation...........................................................................13
CHAPTER FOUR...............................................................................................14
Data Analysis and Presentation...............................................................................14

I
4.1 Result Analysis and Discussion..........................................................................14
4.1.1 The AIB’S Debre Tabor Branch reliance on internal auditing practice........................15
4.1.2 The AIB Debre tabor Branch internal auditor objectivity........................................16
4.1.3 Internal auditors competence in AIB Debre tabor Branch........................................17
4.1.4 Internal Auditors’ perception toward staffing and safeguarding   of asset in   AIB, Debre tabor Branch.
.......................................................................................................................19
4.1.5 The application of internal auditing principle in practice in AIB, Debre tabor   Branch. . .20
4.2.1 Division of internal auditing department in AIB, Debre tabor Branch and their Function.21
4.2.2 Response of Financial audit division head...........................................................21
4.2.3 Response of operational division head..........................................................................................22
CHAPTER FIVE................................................................................................23
SUMMERY, CONCLUSION AND RECOMMENDATION..........................................23
5.1 Summary.........................................................................................................................................23
5.2 Conclusion...................................................................................................23
5.3 Recommendation............................................................................................24
References.........................................................................................................25
Annex..............................................................................................................26
Declaration........................................................................................................30

II
 List of table

List of Table Pages

Table 4.1 AIB Debre Tabor Branch reliance on internal audit work ….………………………………….13

Table 4.2 The AIB Debre Tabor Branch level of reliance on internal audit work………………………...13

Table 4.3 The AIB` Debre Tabor Branch Internal audit objectivity ……………………………….……...16

Table 4.4 The internal auditors opinion on the degree of competence of AIB, to Debre Tabor…………...17
Table 4.5 The internal auditors perception to words staffing and safeguarding  of  assets in AIB, Debre
Tabor Branch………………………………………………………………………………………..……….18

Table 4.6 Internal auditor’s suggestion about good qualities of internal Auditing items of objectives and
competent ……………………………………………………………………………………………………19

III
 ABBREVATION AND ACRONYMS

IA=internal auditing

IAP=Internal auditing practice

GAO=General accounting officer

CPA=Certified public accountant

IIA=Institute of internal auditor

AICPA=American institute certified public accountant

AIB=Awash International Bank

IV
 CHAPTER ONE: INTRODUCTION

1.1 Background of the study

Auditing is a systematic process of objectively obtaining, evaluating evidence regarding assertion

about economic action and event to assert established criteria and communicating the result to
intended users (Bradiiey,2005).

In our country internal auditing is a corner stone for good public-sector governance by providing
unbiased objective assessment of whether the public resources are reasonably and effectively managed
to achieve intended result. Auditing helps government organizations achieve accountably and
integrity, improve operations and install confidence among citizens and stock holders (Boronton and
Johanson, 2000).

The starting place for internal audit theory is the definition of internal audit. The divergence and
interpretation of the audit role is explored, in terms of the way we may practice more average from the
standard its own approach and style. The institution of internal auditors’ definition internal auditing is
an independence objective assurance, and consulting activity designed to add value and Importance to
an organizations operation. It helps an organization to accomplish its objectives by bringing a
systematic way of risk management, control and governance process. (Spencer, 2010)

Auditing is an important activity for all types of organizations whether governmental, private for
profit, not for profit or any other. Auditing is a systematic process of objectively obtaining and
evaluating evidence regarding assertions about economic actions and events to ascertain the degree of
correspondence between those assertions and established criteria and communication the result to
interested user(Sisay 2014).

In all large organizations important elements of Internal control is the Internal auditing staff. Internal
auditors are professional level employees with the responsibility of investigating throughout the
company the efficiency of operations in every department or other organizational unit. They are
continuously studying and testing the system of internal control and reporting to top management on
compliance with company standards and on problem which require strengthening of internal
controls(Sisay 2014).
1
Internal audit is an independent and objective activity, an organization that gives assurance as to the
degree of control by the operations, a guide to improve operations and contribute to an adding value.
Internal audit helps the organization to achieve its objectives by evaluating a systematic and
methodical approach to its risk management processes, control and management of the entity and
making proposals to strengthen their effectiveness(Daniela 2010).
Internal audit solves day to day problems of insurances companies both at the head office and
branches. However, they spend most of their time ensuring that accounting records are properly
maintained and reliable; that the assets of the company are adequately safeguarded and properly
maintained; and that the company is in compliance with the established policies and procedures.
Internal auditing is also handicapped by a critical shortage of appropriately trained and skilled
manpower(Sisay, Kebede, and Hailu 2003).
Banking is a service area that needs special quality parameters to serve the need of customer utmost. It
is the most vital economic sector that provides services in order to meet important needs of society at
large. Therefore, the ability of banks to continue and survive in the market depends on their ability to
respond to the requirements of change and interact with the output of it as the customers' needs and
wishes which are also shaped and formed in the light of their economic, social and civilization
conditions(AMARE 2016).
Proper internal auditing practice is a base for preserving the stability of any company. The study is
faces on describing and analyzing the important control directions that are related to internal auditing
practice, in regard to see the existing and applicability of attributes and the standards in Awash
International Bank (AIB) performance to increase the quality of audit work. Raising awareness of the
role and significance of internal auditing to the achievement of specific objectives in reasonable
assurance, accountability, effectiveness and efficiency of operations, reliability of financial reporting
in compliance with applicable laws and regulations (Sawyer, lawyer B, 1989).

1.2 Statement of the problem

Internal audit is an important part of company’s internal control system through which the company’s
management ensure the adequacy and proper implementation of other established controls.(Anon
2019).

Internal auditing is examination of internal control system in which it functions by measuring and
evaluating effectiveness of other control on the other hand external auditor has reasonability to report
on the truth and fairness of the account of the company. The internal control system is the major part
2
in any organization. The role of internal auditing unit is to determine that internal control is in place
by reviewing policies and practices in the organization in order to avoid loss of financial resources,
noncompliance and also to provide reasonable assurance that public money has been spent in an
efficient and effective manner(AMARE 2016).
Audit is essentially entrusted with the task of reporting reality in financial statements and this reality is
what the users of accounting information expect. However, the auditors may not check out the reality
and this reality may fall short of user expectations. This shortfall in audit Independence is broadly
label as audit expectation gap. Because internal auditors can make line managers aware of their
responsibility; can act as a consultant in monitoring risk, identifies weakness in internal control
system, and facilitates the implementation of risk management as well as internal auditing contributes
to the appropriateness of procedures and operations of the audited body(Anon 2017).

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 can’t achieved the
certified public accountants (CPA) independence in fact. This limited independence reduces their role
with company to the lever of the more assistance to the top management.

The other problem is that inadequate internal control can expose the company to various identifiable
risks, such as waste of company available resource, fraud by employees and lack of control over asset.
By not having adequate internal auditing activities, the company will loss substantial amount of
resource and have difficulty to achieve its intended objectives.

All the above mentioned point made the researchers to undertake a study of this nature. Here in this
paper, the researchers wants to assess the existing internal auditing system.

Depending on the above problem the study raises the following question:-

 Are the principles of internal auditing applied in practice in AIB?

 How internal auditing department in AIB is divided?
 How internal audit practice affects external auditing function?
 What seems the quality of internal audit work in AIB in terms of competence, objectivity and
independence?

3
  What is the general nature and use of internal audit in AIB?

1.3. Objective of the Study

1.3.1. General Objective

The general objective of this study is assessment of internal auditing practice in case of on

Awash International Bank Debre Babor branch)

1.3.2. Specific Objective

The specific objectives of this study are:

 To examining the application of the internal audit practice in the bank.

 To identify the quality of internal audit work.
 To assess the internal auditing department in AIB is divided
 Examine internal audit practice that affects external auditing function
 To assess the general nature and use of internal audit in AIB

1.4 Significance of the Study

The major benefits and importance of this study are the following:-

 It enables the managers to be aware of the importance and use of internal audit in achieving
intended objective.
 It helps the auditor in this organization to know their role in the organization.
 It allowed the researcher to practice a larger similar study that could be performed in other
organizational sector.
 It used to as an additional reference to the existing restructure and can be used as a spring
boards for other research, who wishes to conduct a research in the same area.

1.5. Scope of Study

The study emphasizes on how internal auditing principle are applicable in practices and the quality and
applicability of the internal auditing in the Awash International Bank at Debre Tabor Branch and
division of the internal audit department and the function and responsibility of each division.

4
 1.6. Limitation of the Study
There are some limitations to conduct the study, since the study does not cover all branch of Awash
International Bank, the result of the study may not give full information about internal auditing
practice because of:-

 Financial source is not sufficient to gather all relevant information.

 The time allocated for data collections is not sufficient to gather all the relevant information.
 Questionnaire method is primary used to gather primary data. However, the information is not
free from personal bias of respondent.
 Some of the respondents not give response sincerely.

1.7. Organization of Study

This study has five chapters. Chapter one deals with the introduction part which containing, the
background of the study, statement of problem, objective of the study, significance of the study,
significance of the study, scope of the study and limitation. Chapter two summarizes review of
literature. Chapter three deals with research methodology. Chapter four deal with the data analysis
and presentation. Chapter Five deals with summery, conclusion and Recommendation.

5
 CHAPTER TWO: LITRATURE REVIEW

2.1 Theoretical 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.

2.1.1 Definition of Internal Auditing

Many schools and professional institution in the field of define auditing in different manner.
According to William and water perspective on modern auditing book, auditing is exercise whose
objective is to enable auditor to express and opinion about the fairness of the financial statement. In
addition auditing is as the accumulation and evaluation of evidence about the quality of an economic
entity to determine and regard the degree of correspondence between the information and establish
standard. (Setter, 1980, p.10). Financial statement is based on an examination of the statement
regarding their quality, Fairness, and reliability compared to the establish criteria. After verified by the
independent auditor it is presented in the form of written regard (Arens ALVin, 1997, pp. 767-769).

2.1.2 Historical development of Initial Auditing

It is a normal for any nativity to become into being as a result of emerging need. To understand better
the nature of the activity which currently exists some know something about changing conditions in
the past which create the needs for that activity.
The changes in the field of internal auditing reflect the emergent changes in the concept and
techniques of baseness and government service delivery. New approach in global competition,
business process reengineering security, advances in the technology have created the challenges of
development new and more relevant in approaches in the concept and practice of internal auditing. In
spite of its earlier existence the internal auditing did not emerged as recognized field of professional
practice until the 1940s, when the factors influenced its development as distinguished profession. In
the first place, the rapid development and sophistication of business, government service and the
development of statutory audit brought about strengthened demand on management and board to
ensure that assets properly safe guarded, result are consistent with established objective, programs and
operation goals are achieved as planned. The second factor which becomes potent force in the

6
development internal auditing profession is establishment of the institution of the internal auditing
(IIA) in 1941 in New York. Despite this, the first official pronouncement of internal auditor (IIA) was
issued in 1947.

2.1.3 Internal Auditing in Ethiopia

The history of the development of internal auditing in Ethiopia dates back to about the middle of the
1940s jest about the time when internal auditing was evolving as an organized profession in the United
States. Internal audit in Ethiopia had its early legislative root in the constitution of 1931s which
authorized the establishment of an audit commission (Art.34) and the audit commission itself was
establish much rater by proclamation 69/1952 to audit the account of the ministry of finance.

The period of 1950s marked the introduction of a budgetary system in government. The enouncement
of an annual public budget in 1955 for the first tie mint history of the country us a system of financial
Administration based on the annual budget with all its attendant requirement for strengthen internal
control in budgetary agencies. This entailed the formation of internal audit as an integral part of the
budgetary internal control system. Presently, government has taken the initiative to improve same
enumerated weakness and recognize and strengthen the internal auditing practice both in private and
public sector enterprise to this effect only government did provide from necessary frame work by the
financial administration profanation of federal government (proclamation 57/1997) as well as directive
issued by the ministry of finance and economic development but also taking measure to recognize and
strengthen in eternal auditing in these organization (MOFED, 1997).

2.1.4 Objective of Internal Auditing

The objective of internal auditing is to axis member of organization in the effective discharge of their
responsibility. Internal auditing is an independent appraisal function established within an organization
to examine and evaluate its activity as service to the organization. To this end internal auditing
furnished them with analyses appraises, recommendations coursed and interruption concerning the
activities reviewed. The member of the organization assisted by internal auditing includes these in
management and the bound of an refer internal auditor a responsibility to both, providing them with
information about the adequacy and effectiveness of the organization system of internal control and

7
the quality of preference the information furnished to each may differ informant and details depending
up to the requirement and request of management and the board (Engle T.J, 1999, P.118).

2.1.5. Meaning of Internal Auditing

Different scholars and institute define internal auditing indifferent way. However, au definitions are
almost similar in senses. According to the institute of internal auditor (IIA) define in the following
manner. Internal auditing is an independent, appraisal objective assurance and consulting activity
designed to add value and improved and organization operate. It helps an organization accomplish its
objective by bringing a systematic disciplined approach to evaluate and improve the effectiveness of
risk management, control and governance process. Internal auditing is helpful to assist member of the
organization in the effective discharge of their responsibilities (Atkinson, 1986, p.4).

2.1.6. Internal Audit Function

The internal audit function should have organizational independence and should operate under a
charter that grant the right carry out all activity necessary to accomplish the following objective
evaluation of the performance of various functional unit with the organization, especially interims of
operating efficiency and the implementation of controls designed to achieve optimum result. The
verification of the reliability and integrity of the operating and financial information on which the
various controls that have management and other must rely in performing their responsibility.

A good practical list is that the internal audit activity partially or completely achieved, the regular
company operation would on for the time being in the normal manner. To the extent that the internal
auditing group is charged with day to day activity has simply taken place of regular accounting or
other operational responsibility.

The base role of internal audit is to provide assurance about financial and non-financial information
and method for control. Therefore internal audit should be kept distinct from other function engaged in
analyzing and reporting on program is performance (G.Braithwaite, 1989, pp.2-5).

2.1.7 Characteristic of Internal Audit

 Auditors are company employee.
8
  Review of company activities is continuous.
 Have a direct influence on the scope of external auditor activity.
 Primary concern is in serving the needs of the organization.
 Accountable for management and does not issue opinion to the general public.
 Working is subdivided primary according to operating function and line management
responsibility.

2.1.8. Internal Auditing Role in Control

Internal auditing often described as a control which functions by examining and evaluating the
adequacy and effectiveness of other control. It serves to explain much of internal auditing today and
also provides a central concept around which focus tract a vision of the professions principal role in
the future (Bigg and daves, 1980, P.53).

The concern of internal auditor with control grocers is both of immediate and long term interest. The
auditor should respond to that interest by focusing his/here effect on great understanding of control
probably needs to be more clearly acknowledged by the profession since it account so much work
being done by internal editing today.

A major port of the management process has to do with control. This every manager has an important
responsibility to develop a program of control that will most effectively contribute the kinds of
performance of which he/she is in change. This control program consists of the overall control effort
covering the activities over which he/she is responsible and the individual control effort which
together comprise the total control efforts (Robert M. Atkisson, 1986, p. 323).

2.1.9 Independence, Objectivity and Compliance

Internal auditor should be independent of the activity they audit internal auditor are independent when
they can carry out their work freely and objectively, independence permits internal auditor to render
the logical and unbiased judgment essential to the proper conduct to audits it’s achieved through
organizational status and objectivity. Objectivity is an independent mental attitude which internal
auditor should maintain in performing audit. Internal auditors are not to subordinate their judgment on
audits matters to that of others. Objectivity requires internal auditor to perform audit in such a manner
that they have all honest belief in their work product and that no significant quality compromises are
9
made internal auditors or not to be placed in situation in which they fell unable to make objective
processional judgment. Compliance with standard of conduct and policies internal auditor should
comely with processional standard of conduct. The code of the institute of internal auditor set for
standard of conduct the code calls for high standard honest, objectivity, diligence and loyalty to which
internal auditor should conform (Hourd F. Settler, 1990, p. 354).

2.1.10. Responsibility of Internal Auditor

The same responsibilities of internal audit are as follow:-

 Responsible for evaluating design and effectiveness of compliance function

 Develop long range audit plan for organization.
 Audit of new management areas to evaluate internal control system.
 Review internal administrative and accounting control to safeguard resource and ensure
compliance with laws and regulation.

2.1.11. Applicability of Internal Auditing

The development of internal auditing has to a major extent been centered in the business organization.
This tie continuous in the exacting literature of the profession and the convenient treatment of
problems with work of business organization. The need for internal auditing exist in all type of
organization when the completeness of activities, the volume of transaction and dependence on large
number of people to exist in some combination to create operational problem (Arens, 1991, p. 154).

2.1.12. Barriers to Successful Audit Result

The most common barriers for the some achieve successful audit result because of the following
conflicting goals management and auditor:
One of the most common barriers to successful audit results internal auditors face of understanding of
management goals and the ensuring conflicts that rise absence of full range of technical competence:

10
The absence of some form of legal requirement for technical competence has put internal auditing in
jeopardy. Areas that could be affecting by the absence of technical competence are morale in the audit
staffs, the conclusion drown, making decision and corporate objectives at whole.
 Neglect of the most important phase of the study:

Internal audit the title analysis found in the observations focuses on easily identifiable area corn. This
neglect has been the direct cause for audit failure.

 Neglect of internal audit of fundamental communication:

Neglect to communicate clearly with the entity audited poor communication of audit results has
coursed the down failed of some audit and led to a negative misconception about auditor
(G.Braithwoite, 1989, p.230).

2.1.13. Audit reports

Its objectives are to pursue management to take premedical action. Report must be written with very
great care after full consideration of the subject matter. Generally reports can be divided into four main
categories based on the time report will be issued. First, the report prepared by the internal audit staff
after their visit to a function unit, second, periodical report prepared which summarizes the main audit
finding and recommendations for the period under consideration, third, report on the results of special
investigation, and enquires, fourth, an annual audit report.

2.1.14. Contents of Report

Contents of report are impossible to be dogmatic as to the contents of internal audit reports it
suggested. However, that part forms a brief general reference to the work to work perfumed. Report
should deal with matters a rising from the audit result of investigation. The types of error disclosed the
defects revealed in systems and the reason which allowed afraid to be perpetrated are the essential
matter on which information is required (Arens and Loebbecke, 1997, pp.34-37).

2.1.15. Format of Report

11
The format of the audit report is important and a well drafted will contribute in large to the
optimization of its usefulness. The report should be inserted in standard folder and should be
appropriately headed. To fully understand what is going on an audit report, one must analyze the
following varies components. Introductory: The purpose of introductory paragraph is to provide the
reader to understand and accept what is contained in the conclusion. It includes letter of transmittal,
report title table of contents and back ground, objective and scope.

Main body: - refers to audit report selection where the finding are discussed and principal work is
performed.

Conclusion: - it refers to the auditor over all opinion of the area reviewed or judgment drawn from
the specific finding in the main body. The name and designation of the person singing the report,
together the date of issue should be typed at the foot there of (Messier, 2003, p. 421).

2.1.16 Objectives of conducting an audit of financial statements

The purpose of an audit is to provide financial statement users with an opinion by the auditor on
whether the financial statement is presented fairly, in all material respects in accordance with
applicable financial accounting framework (Arens et al, 2006).

2.1.16.1. Management responsibility

The management responsibility for adapting sound accounting of policies maintain adequate internal
control and making fair representation in the financial statement rest with management rather than
with the auditor knows more about the company’s transaction and related assets liability and equity
than the auditor, in contrast the auditors knowledge those matters and internal control is limited to that
acquired during the audit (Arenas et, 2006). The annual reports of many public companies include a
statement about management responsibilities and relationship with CPA firm. Management
responsibility for the interpret and fairness of representation (assertions) in the financial statements
carries with it. Privilege of determining which presentation and discuss it considers necessary
.management insists of financial statements disclosure that the auditor find an acceptable and opinion
the auditor can either issues an adverse or qualified opinion or with draw from his engagement (Arena
et al, 2006).

2.1.16.2 Auditors responsibility

As arenas et al. (2006) the overall objectives of auditors are;-

12
To obtain reasonable assurance about whether the financial statement as a whole and free from
material misstatement, whether due to fraud or error, thereby enabling the auditors to express an
opinion whether the financial statement are prepared with all material respects, in accordance with an
applicable financial reporting framework; and To report on the financial statement and communicate
as required by audit standards in accordance with the auditors.

2.1.16.2.1. Auditors responsibilities for detecting material error

Auditors spend a great portion of their time by planning and perform audit to detect un international
mistakes made by management and employees auditors fined a variety of errors resulting from such
things as mistakes in calculations, omissions, and misunderstanding and misapplication of accounting
standard, incorrect summarization and descriptions. auditors responsibility for detecting material
Fraud audit standard make no distinction between the auditors responsibilities for searching for errors
and fraud in either case the auditor must obtain reasonable assurance about whether the statement are
free of material misstatement. the standards also recognize that fraud is often canceling the fraud, the
difficulty of detection doesn’t change the auditors responsibilities to properly plan and perform the
audit to detect material misstatements , whether caused by error or fraud (Arena elala 2006).

2.2 Empirical Review

Empirical studies examine prior researchers done related to effectiveness of internal audit and factors
that affect internal audit quality seek to establish whether they can be link to the current study
.According to Wubishet and Deribe (2006).Internal audit in an important part of corporate governance
structure within an organization. To investigate the factors determining internal audit quality in
finance and economic development office. According to (Kaldir Hssen, 2007) examine internal audit
practice in small government office. His study will be investigate key problems authorizing internal
audit practice regarding the organizational policy authorizing internal audit ,audit corporation
,independence ,objectivity ,proficiency and planning of internal audit unit. According to Mihiret
(2007) internal audit practice arguably a result of four problems, internal audit quality, management
support, organizational setting and attributes of the audit. The study will be identify factors that affect
the practice of internal audit service.

13
2.3 Literature Gap
The study was be made with the purpose of reviewing the internal audit practice in AIB at Debre
Tabor branch particularly in banking industries so as to find out the practice and then to suggest
possible recommendation that can be useful in the effective understanding of audit activities. Internal
audit play a significant practice in evaluating the internal system and contribute to ongoing
effectiveness because of organizational position on authorities in finance and economic development
office. An internal audit practice plays a significant monitor role. The overall objective of internal
auditing practice is to achieve the value and goal of corporations by providing quality assurance and
consultants, Internal audit express the evaluating to testing internal control demonstrating expertise,
techniques and skill ensure that authority mechanism and development are adopted. The internal
auditing practice increased dramatically in the past two decades primarily because of the increase in
size and complexity of many corporations. Internal auditing is a staff, therefore, the auditor ideally is
not in deposition of line function. Internal audit is often describe as a control which function by
examining much of internal auditing and also provide a control around which to construct a vision of
the profession principle practice in the future,

14
 CHAPTER THREE: RESEARCH METHODOLOGY

3.1. Research design

This research paper focuses on the assessment internal audit practice in AIB at Debre Tabor Branch.
The study would be used descriptive method, where data obtained from the respondents are recorded,
analyzed and interpreted by conducted field survey. According to Kothari (2004), second edition, the
major purpose of descriptive research is the description of fact finding enquires out the state of affair,
exits at present. The main reason why researchers performed this method is she/he has no control over
the study he/she can only report what has happened.

3.2. Research Approach

The researchers would be used both quantitative and qualitative research approach. The reason that the
researchers use this approach is, it emphasize objective measurements, and statically, mathematical, or
numerical analysis of data collected through questionnaires and surveys, and by manipulating pre-
existing statically data using computational techniques. It also focuses on gathering numerical data and
generalizing it across groups of people or to explain a particular phenomenon. Qualitative data are
types of information that have aspects that are unable to be measured, or are founded to be
approximations. They describes about the data is how much it is good, best and better.

3.3 Source of data

The researchers was using both primary and secondary source of data exclusively. The primary source
of data was obtains from the employees of the office through distributing questionnaire and interview
whereas the secondary data was obtains from internal audit manuals of office.

15
 3.4. Method of data collection

In the data collection process different types of data collection method has been used in the study.
These methods vary according to the source of data that has been collected. To collect primary data,
two different types of data collection method is use, such as unstructured interview and questionnaires.
The secondary data is collect from pamphlets bank manual, reference books and others research
material which related with the topic.

3.5. The sample technique

The sampling techniques that is going to be implemented for the study is non probability judgmental
sampling. This technique of sampling is selected because it enables to get accurate and sufficient
information. By using these techniques 30 individuals who are believed to have sufficient knowledge
and familiarity with the subject matter is selected. The total number of sampling 20 works on the
organization directly or indirectly related with internal auditing.

3.6. Data analysis and presentation

The study is used for data analysis editing, coding and tabulation. Editing is used to involves the
inspection of questionnaire on a raw data and necessary coactions of each questionnaires and defecting
the most glaring omission in accuracy in detail.

Coding is a technical procedure by which data are categorized through coding the raw data to transfer
into symbols usually numerals. It is tabulated and counted. This can be done by specifying the
categories in to which re gains to be place. The number is depending up on the number of question on
the questionnaires. Coding open- ended questions. This is done through developing consistent set of
standard to each question.

Tabulation consists of simply counting the number faces that fall into varies categories. It
communicates the result of the study, can be used for several propose (i.e. to calculate summary
statistic).

16
Tabulation is can be done by hand. It is facilitated determining the empirical distribution. Variables
frequencies were numerated in each table for calculation of varies statistics and communicative
distribution function would be employed to observer with less than or equal to specify quantity
determined.

CHAPTER FOUR: RESULTS AND DISCUSSION

This chapter presents the result and analysis done on the internal auditing practice in AIB in Debre
tabor Branch. This discussion covers both the attribute standard and performance standard of internal
auditors. A total of twenty (20) questionnaires were distributed to respondents that are working in AIB
in Debre tabor Branch. From these twenty (20) questionnaires fourteen (14) of them are filed properly
and forwarded, which represent 70% of the response rate. The responses obtained from operational
and financial division head are analyzed separately because both of them are asked separate questions.
The data gathered in the two methods, that are questionnaire and interview and analysis made on this
data is presented on the following section.

4.1.1 The AIB’S Debre Tabor Branch reliance on internal auditing practice

As indicated earlier internal auditing practice of a company is useful for enhancing the effective and
efficient auditor work of the company. This well increase quality. In addition, greater participation and
coordination of internal auditors may result in lower audit cost. The contribution of internal audit
function to the financial statement audit depend on the quality of internal auditing rules and procedures
and the proper application of these rules and procedures.

To address the first question, which concern about the Awash International Bank of Debre tabor
Branch reliance on internal auditing practice, respondents were asked whether or not they rely on

17
proper internal audit work and the degree of reliance. As shown under table 4.1 below 10 out of
14(71.4%) of the respondents yes and 4 out of 14(29.6%) of respondents replied partially they rely
practically on internal quit work during the audit of financial statement.

Table 4.1 AIB Debre tabor Branch reliance on internal audit work

No Responses Respondents
No. Percent
.
1 Yes 10 71.4
2 partially 4 28.6
3 No 0 0
Survey of questionnaires in 2021

Table 4.2 the AIB Debre tabor Branch level of reliance on internal audit   work

No. Level of reliance Respondents

No. Percent
1 High 5 35.72
2 Medium 9 64.28
3 Low 0 0
Survey of questionnaires in 2021

As indicated in the above two table 4.1 and 4.2 even if the AIB Debre tabor Branch has enough
internal auditors work which amount 71.4% of their work relied on the internal audit work. The
reliance on the level of internal audit work medium i.e. 64.28%, therefore we can say that, even
though the bank has internal auditing practice highly its application is medium. The quality of internal
audit work depends on adequate and relevant as required by auditing standard.

4.1.2 The AIB Debre tabor Branch internal auditor objectivity

As indicated in the proposal internal auditor should be objective in performing always audits. To be an
internal auditor should ideally report to the higher level of management and for other concerned party,
such as audit committee that allow internal auditor activity to achieve their responsibilities and be
independent of oppositional management in fact and in appearance. For the audit work quality and
functioning and there should avoid contact of interest.

18
Depending on the above issues related with the internal auditors objectivities the response obtained by
the questionnaire are presented in the following table (i.e. table 4.3)

Table 4.3 The AIB Debre tabor branch Internal Auditor objectivity

Responses
Strongly
No Statement Strongly agree agree Neutral disagree
disagree
No % No % No % No % No %
1 Internal auditor in
AIB Debre tabor
Branch is free from
conflicting auditors 5 35.7% 7 50% 2 14.3% 0 0% 0 0%
2 The internal auditor
in AIB Debre tabor
Branch exercise due
professional care in
performing audit 6 42.8% 9 64.2% 0 0% 0 0% 0 0%

Survey of questionnaires in 2021

Depending on the table 4.3 the researchers can under stood as the response of internal auditor work
(i.e. strongly agree and agree) increase the higher the internal auditors objectivity. This result told in
quality of internal auditor Function. The table show that majority of respondents agreed with the
statement that internal auditor in AIB Debre tabor Branch was Free from conflicting of auditors which
is 50% responses. The internal auditors in Awash International Bank, Debre tabor Branch are
exercising due professional care in performing audit work are 9 out of the 14 respondents which
64.2%. From this it is possible understand that internal auditors in Awash International Bank in Debre
tabor Branch have objective. In other words, this objectivity increases the extent of reliance on internal
audit practice.

4.1.3 Internal auditors competence in AIB Debre tabor Branch

If the organization has competent internal audit staff, it is expected to provide more valuable inputs to
work improving internal controls of an organization, which will affect the quality of internal audit

19
work to be competence internal auditors should have enough level of knowledge, skill and discipline.
The degree of competence of internal auditor depend on their practical experience, availability of
continuing educational and the quality of internal audit working appear.

Therefore, examine the competence of internal auditors are practical experience. Respondents were
asked to indicate the extent of their opinion with the following statements which are excused to have
influence (direct relations) with competence of internal auditor. Internal auditors in AIB, Debre tabor
Branch have appropriate continuing educational program, internal auditors in AIB, Debre tabor
Branch have enough level of practical experience, the internal auditors prepare working paper to
reduce test confident out the result of test and conclusion drawn in the bank.

Table 4.4 the internal auditors opinion on the degree of   competence   AIB, Debre tabor Branch

Responses
Strongly Strongly
No Statement Agree Neutral disagree
agree disagree
No % No % No % No % No %
1 Enough level of
practical
experience 2 14.3% 4 28.6% 8 57.1% 0 0% 0 0%
2 Appropriable
contracting
educational
program 2 14.3% 3 21.4% 7 50% 2 14.3% 0 0%
3 Working paper
documentation
and report have
enough in quality
and quantity 3 21.4% 5 35.7% 4 28.6% 2 14.3% 0 0%
Survey of questionnaires in 2021

As clearly shown in table 4.4, most of the respondents agreed on statement indicated on no (1) 8 out of
14 which is 57.1% of the respondents neutral, 4 out of 14 which is 28.6% of respondents have agreed,
and 2 out of 14 which is 14.3% of respondents strongly agreed. The internal auditor in AIB, Debre
tabor Branch has enough level of practical experience. For the statement indicated under no (2) 7 out
of 14 which is 50% of the respondent have neutral, 3 out of 14 which is 21.4% of the respondent have
agreed, 2 out of 14 which is 14.3% of the respondents and 2 out of 14 which is 14.3% of the

20
 respondents have disagreed. For the statement indicate on no (3) 5 out of 14 which is 35.7% of the
respondents have agreed, 4 out of 14 which is 28.6% of respondent have neutral, 3 out of 14 which is
21.4% of respondents have strongly agreed and 2 out of 14 which is 14.3% of respondents have
disagreed.

The internal auditors prepare working paper to reduce test carried out, the result of test and conclusion
draw in the bank. Therefore, the bank has enough level of practice to prepare working documentation
and report. By considering these three situations, we can suggest that whether the internal auditor does
not have appropriate continuing educational grogram they are almost competent. Because they have
enough level of practical experience and proper working paper documentation and report. Internal
auditing by competent internal audit staff is relevant and reliable for the users of financial statements
of the bank. Therefore, the competence of internal auditors in AIB, Debre tabor Branch is moderate
due to lack of appropriate continuing educational program.

4.1.4 Internal Auditors’ perception toward staffing and safeguarding   of asset

in   AIB, Debre tabor Branch.

The internal auditing department reviews the means of safeguarding assets and as appropriate, verify
the existence of such assets. The internal auditor not only verifies the assurance of such asset, but also,
appraises the economy and efficiency with which resources are employed. The existence of these
criteria enhances the adequacy of information provided by the internal auditor to its customers. This
application of internal auditors in practice for proper safeguarding of assets will increase the reliability
on internal auditors good work performance. Based on the above information, we have the following
response for my questionnaire.

Table 4.5 the internal Auditors perception towards staffing and safeguarding of assets in AIB,
Debre tabor branch.

Responses
Strongly Strongly
No Statement Agree Neutral Disagree
agree disagree
No % No % No % No % No %
1 In AIB, internal auditor is
review the means of
safeguarding asset 4 28.6% 8 57.1% 2 14.3% 0 0% 0 0%
21
2 In AIB staff assignment of
internal auditor is rotated
periodically 0 0% 2 14.3% 3 21.4% 9 64.3% 0 0%
Survey of questionnaires in 2021

As clearly show in table 4.5 the majority of the respondents agreed for statement indicated on no (1)
which is 57.1% of respondents agreed and 28.6% of respondents have strongly agreed. Generally,
85.7% of respondents have agreed concerning the banks appropriate safeguarding of assets. For the
statement on no (2) respondent have almost disagreed which is 64.3% and 14.3% of respondents have
agreed about the statement, “Staff assignment of the AIB internal auditor is periodically rotated”. By
taking the majority about 64.3% of the internal auditors are disagreed about staff assignment of the
bank and periodic rotation of internal auditors. The low staff assignment may be the technical
proficiency and level of experience is appropriate for the audit performed. From this the researchers
understands that, there is no potential and actual conflict of interest and the internal auditor should not
be expected to report to the manager. The existence of stable worker in any company in cases of the
adoptability of the work and hence increases the quality of audit work.

4.1.5 The application of internal auditing principle in practice in AIB, Debre

tabor   Branch
In the first part of this chapter, the questionnaire results indicate that the extent of internal auditors’
reliance on internal auditing practice and quality of internal audit work in AIB is high.

The reason for high internal auditing practice in AIB is due to high level of objectivity and
competence of internal auditor. To analysis this, respondents were asked to indicate the extent of their
point of view with the following three statement that may be basic causes for the banks internal auditor
dependability. From the three the first one is, the programs in AIB , Debre tabor Branch are regularly
revised to covers changes in client system; the second, audit procedure, including testing and sampling
techniques improves is selected in advance where practicable and expanded; the third, the internal
auditor in AIB, Debre tabor Branch are skilled dealing with people and in communicating effectively.

Responses
Strongly
No Statement agree Neutral disagree Strongly disagree
agree
No % No % No % No % No %
1 Programs in AIB are 0 0% 10 71.4% 1 7.14% 3 21.4% 0 0%
regularly revised to

22
 cover change in the
clients system
2 Audit procedure such as
testing and sampling
techniques is selected in
advance 6 42.9% 8 57.2% 0 0% 0 0% 0 0%
3 The internal auditors in
AIB are skilled dealing
with people and
communicating
effectively 3 21.4% 9 64.3% 2 14.3% 0 0% 0 0%
Table 4.6 internal auditor’s suggestion about good qualities of   internal auditing items of objective and
competent

Survey of questionnaires in 2021

The three factors which mentioned above influence the internal auditors practice as indicated by the
professional auditing standard. As clearly show in the table 4.6, 71.4% agreed for the statement that
program in AIB’s regularly revised to cover the change in the clients system while 7.14% of
respondents have neutral and 21.4% of respondent have disagreed.

As indicate in table 4.6 on no (2) tell as the AIB have enough level of audit procedures, which have
57.1% of respondent are agreed and 42.9% of respondent have strongly agreed. The other statement on
table 4-6 no (3) the internal auditors in AIB are skilled dealing with peoples and in communicating
effectively most of the respondents which are 64.3% agreed; 21.4% of the respondents have strongly
agreed and 14.3% of the respondents have neutral.

Generally, from above analysis we can understand that internal auditors in AIB are compliance with
role, police and regulations. Therefore this realizes that adequate work performed by internal auditors
in line with internal auditing principle of the bank which increase the effectiveness of the bank. To
support the response given by the internal auditors for presented questionably is used related interview
that are expected to generalize the response of questionnaire.

4.2.1 Division of internal auditing department in AIB, Debre tabor Branch and
their Function
The internal auditing departments in AIB have two major divisions. These divisions are operating and
financial division. The researcher distributed questionnaire for both of the division. The questions
23
presented are different and analyzed separately. All questions which related to the financial condition
are asked financial audit head and the other which related about the operating condition is asked for
the operating and it head. Then, their responses are analyzed as follow.

4.2.2 Response of Financial audit division head

There are five questions that are asked for the financial audit head. Among the five questions, the
respondent response for the two questions, i.e. “the internal audit use reliable documentation for
describing the company’s system as basic for his procedures test, such as flow chart and company’s
procedure manual in AIB” and “examine the control over all accounting operating which materially
affected the financial statement” have strongly agreed. From five questions, the three respondents have
agreed, these questions are, “financial record and reports conation accurate, reliance timely complete
and useful information”, “financial audit division head examine information” and “the financial audit
head prepare activity report and submitted to management and to the board. Finally we can generalize
the financial audit division head discharge his responsibly concerning the financial and accounting
activity of the department.

4.2.3 Response of operational division head

There are five questions which are prepared for the operation head division. Among these, the
respondent agreed for two statements. The first one is operational division head review operations or
programs to ascertain whether the results are consistent with established objectives and goals and
whether the operations are being carried out as planned. The second question is the operational
division head relied the reliability and integrity of operating information and the means used to
identify, measure classify and report such information. Among the five questions the respondents’
response for two statements strongly agreed. The first statement the bank operation division head
report identify weakness and recommendation for improvement and the second statement the purpose,
authority and responsibility of the operational audit division head is defined in a formal written
document form. The researcher can understand from this statement the gradual audit division of the
department, was effective due to the existence of strong operational activity of the operational division
head. Therefore, both the financial audit division and operational audit division of internal audit
department of the AIB, in Debre tabor Branch perform their activity properly. This increase the bank
24
internal audit department to be efficient. In AIB reliability and integrity of information system
reviewed by the internal auditor continuously to identify measure and report such information.
Generally, by considering the results of the respondents from both questionnaire and interview the
response given by the interview are the mirror image of the response obtained by the questionnaire.
Finally we can understand that, the quality of audit work the division and proper function of internal
auditors’ efforts to provide proper information to external auditor in AIB is relatively high.

25
 CHAPTER FIVE: SUMMERY, CONCLUSION AND RECOMMENDATION

5.1 Summary
One of the key elements in ensuring business success is to build a strong and efficient internal audit
controlling system. Organizing in effective internal auditing system for safeguarding resource of the
organization as well as for good internal control in the organization. In order to achieve the planed
objective, the method of data collection were survey of the bank document and questionnaire
distributed and interview. Data were presented and analyzed through descriptive analysis along with
simple statistical to such as table and percentage.

As shown under table 4.1 below 10 out of 14(71.4%) of the respondents yes and 4 out of 14(29.6%) of
respondents replied partially they rely practically on internal quit work during the audit of financial
statement.

The reliance on the level of internal audit work medium i.e. 64.28%, therefore we can conclude that,
even though the bank has internal auditing practice highly its application is medium. The quality of
internal audit work depends on adequate and relevant as required by auditing standard.

This result indicated that in quality of internal auditor Function. The table show that majority of
respondents agreed with the statement that internal auditor in AIB Debre tabor Branch was Free from
conflicting of auditors which is 50% responses.

The internal auditors in Awash International Bank, Debre tabor Branch are exercising due professional
care in performing audit work are 9 out of the 14 respondents which 64.2%. From this it is possible
understand that internal auditors in Awash International Bank in Debre tabor Branch have objective. In
other words, this objectivity increases the extent of reliance on internal audit practice.

The researchers understands that, there is no potential and actual conflict of interest and the internal
auditor should not be expected to report to the manager. The existence of stable worker in any
company in cases of the adoptability of the work and hence increases the quality of audit work.

The internal auditors prepare working paper to reduce test carried out, the result of test and conclusion
draw in the bank. Therefore, the bank has enough level of practice to prepare working documentation
and report. By considering these three situations, we can suggest that whether the internal auditor does
not have appropriate continuing educational grogram they are almost competent.

26
Therefore this realizes that adequate work performed by internal auditors in line with internal auditing
principle of the bank which increase the effectiveness of the bank. To support the response given by
the internal auditors for presented questionably is used related interview that are expected to
generalize the response of questionnaire.

Generally, by considering the results of the respondents from both questionnaire and interview the
response given by the interview are the mirror image of the response obtained by the questionnaire.
Finally we can understand that, the quality of audit work the division and proper function of internal
auditors’ efforts to provide proper information to external auditor in AIB is relatively high.

27
5.2 Conclusion

Depending on the finding of the study, the following conclusions were made:-

 Internal auditing practice is one of the most important functions in any organization for
undertaking different purpose; such as examining and controlling the organization’s resource.
In any area of an organization’s activity must need internal auditing application consistently.
For this research, data gathering instruments are two methods. These are questionnaire and
interview. From both questionnaire and interview the respondents agree for existence of
enough auditing practice in AIB, Debre tabor Branch. Therefore, internal auditing practice in
AIB, Debre tabor Branch is high.
 Internal auditor in AIB, Debre tabor Branch have enough level of practical experience and
working paper documentation and report to record test carried out. But, internal auditor in AIB,
Debre tabor Branch the survey of result also shows that could review the means of
safeguarding assets. This happened due to internal auditor were authorized to review the means
used to suffered asset from various types of lose such as those resulting from theft, improper or
illegal activities.
 Finally, when the researcher studied considers the analysis part, there is some problem in
reliability of audit work accessibility for continuing educational program and the revision on
the bank program. The effect of this problem was reducing the quality and reliability of audit
work.

28
 5.3 Recommendation

In view of the conclusion, the following build suggestion and recommendation were made in the hope
that they would minimize the problem identified in the study area.

 The reliability of internal auditing practice as one can understand from the analysis part is
medium i.e. the existing internal auditing are not reliable for investor and other user or the
audit result in AIB. The researchers recommend the bank, their document available for the
users who went to use their document.
 The internal auditor in AIB, Debre tabor Branch have not appropriate containing education
program. This low level of internal auditors continuing educational program affect the
competence of internal auditors to be at low level. This affects the internal auditing work to be
poor and decrease the quality of internal audit work. Therefore, the bank management should
be given enough opportunity for continuing educational program to increase in competence of
internal auditors and enhance the effective and efficiency of internal audit work.
 Form the conclusion part researchers understand that the audit work is relatively good because
internal auditors are discharges their responsibility regarding to suffering of asset and they
were properly staffed at their proper place.
 The internal auditing principle in AIB, Debre tabor Branch applied in practice without any
violation. But, the agreement percentages for the statement, the internal auditor in AIB are
skilled dealing with people and in communicating effectively are relatively low. This indicates
there is relatively low level at communication between internal auditor and external auditor. To
reduce these problem members of the higher officials should be given well trained for the work
they assigned and improve their high level of profession competency by obtaining professional
certifications.
 Finally, the researchers understands that the organizations data were needed by different party
for different aim. The researcher recommends that the organization must adjust and change its
role in this regard. Because the data needed mainly for academic purpose and have no negative
impact on the function of the bank.

29
References

(Amare medhanit. 2016). “factors affecting internal audit effectiveness : a case of commercial bank of
ethiopia addis ababa branch offices by : medhanit amare june , 2016.”
(Anon. 2019)“assessment of internal control system effecteviness a case of ethiopian construction
design and supervision works corporation.”
(Anon. 2017).assessment of internal control system effecteviness a case of arba minch, ethiopia october
(Arens Alvin a. and etal, 1991), auditing an integrated approach, 5thedifion, prentice USA.
(Big and Daves, 1980), internal auditing, 5th edition, Britain
Boronton and johanson, (2000),internal auditing hand book, 3rd edition ,India

Bradley T. (2004),principle of auditing,11thedition,U

(Daniela, Petra ș. c. u. 2010). “internal audit: defining, objectives, functions and stages.” studies in
business and economics 5(3):238–46.
(Daniel g. Braithwaite, 1989), comprehensive auditing, new approach for internal auditing, Britain.
(James k. Loebbecke, 1997), auditing, an integrated approach, 7th edition, prientice hall int’l, USA.
(Kothri, C.R.2004) Research Methodology Methods and Techniques, 2nd edition, New Age
International (P)Ltd. Publishers.

(Sisay, Betelhem Tesfaye and Eden. 2014). “internal auditing practice in the case of commercial bank
of ethiopia head office business faculty department of accounting internal auditing
practice in the case of commercial bank of ethiopia head office by business faculty
for the degree of bachelor of.” (june).
(Sisay, zelalem, ephrem kebede, and hiwot hailu. 2003.) “an assessment of internal audit practise in
case of lion insurance s . c by an assessment of internal audit practice in case of.”
Spencer, (2010), principle of auditing 9th edition, Brittan

(Whittington and gany, 1995), principle of auditing, 11th edition, USA.

30
Appendix

DEBRE TABOR UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS
DEPARTEMENT OF ACCOUNTING
The purpose of this questionnaire is to collect data on the internal audit practice in Awash international
Bank of Debre Tabor branch. This questionnaire is aimed to at examining the quality of internal and
function of each division head. In general this questionnaire is focused on examining whether the
principles of internal auditing in Awash Bank is applied in practice or not the quality of the output
depend on the respondents’ fair response to the question.

I. For internal auditors only

1. Did Awash International bank in Debre tabor branch relied on internal audit
work

Yes partially No

1. If your answer for question 1 is ‘yes’ or partial how much is the reliance
High medium Law
2. If your answer for question 1 is ‘no’ or the lever of reliance
Internal auditor is not competent
Internal auditors have not adequate scope of work.
Internal auditor department is not stuffed properly.
Internal audit department has lack of following up.
3. The internal auditor in Awash International Bank have an appropriate
continuing educational program
Strongly agree Disagree
Agree Strongly disagree
Neutral
4. The internal audit in Awash International Bank are Free from conflicting
duties and able to investigate any area
Strongly agree Disagree
Agree Strongly disagree
Neutral

31
5. Programs in Awash International Bank of in Debre tabor branch are regularly
revised to cover changes in the clients system
Strongly agree Disagree
Agree Strongly disagree
Neutral

6. The internal auditor of Awash International Bank exercise due professional

core in performing internal audit
Strongly agree Disagree
Agree Strongly disagree
Neutral
7. The internal auditor in Awash International Bank is skilled in dealing with
people and in communicating effectively
Strongly agree Disagree
Agree Strongly disagree
Neutral
8. The internal auditors prepare working paper to recorded test carried out, the
result of rest and conclusion drawn in the bank
Strongly agree Disagree
Agree Strongly disagree
Neutral

9. The internal auditor in Awash International bank of Debre Tabor branch have
enough level of practical experience
Strongly agree Disagree
Agree Strongly disagree
Neutral
10. In Awash International Bank of Debre Tabor branch internal auditor is review
the means of a safeguarding assets and as appropriate, verity the existence of
such asset

32
 Strongly agree Disagree
Agree Strongly disagree
Neutral

11. Audit procedure, including the testing and sampling techniques employed, is
selected in advance, where practicable and expanded
Strongly agree Disagree
Agree Strongly disagree
Neutral
II. For Financial audit division head only.
1. The internal audit use reliable documentation for describing the company’s
system as the basis for his procedural test, such as flow chart and company
procedure manual
Strongly agree Disagree
Agree Strongly disagree
Neutral

2. Financial record and reports contain accurate, reliable timely complete and
useful information in Awash Bank of Ethiopia Debre Tabor a Branch
Strongly agree Disagree
Agree Strongly disagree
Neutral
3. In AIB the financial audit division head examine information
Strongly agree Disagree
Agree Strongly disagree
Neutral
4. The financial audit head prepare activity report and submitted to
management and to the board
Strongly agree Disagree
Agree Strongly disagree
Neutral

33
5. The financial audit division head examine the control over all accounting
operation which materially affect the financial
Strongly agree Disagree
Agree Strongly disagree
Neutral
III. For operational division head only
1. In the internal audit department of the bank operation division head
report identify weakness and recommendation for improvement
Strongly agree Disagree
Agree Strongly disagree
Neutral
2. The operational division head passes the knowledge, Skill and
discipline needed to carry out its audit responsility
Strongly agree Disagree
Agree Strongly disagree
Neutral
3. The operational division head review operations or programs to as
certain wither result are consistent with established objective and goals and
whether the operations are being carried out as planed
Strongly agree Disagree
Agree Strongly disagree
Neutral
4. The operational division head relied the reliability and integrity of
operating information and the means used to indentify, measure classify and
report such information
Strongly agree Disagree
Agree Strongly disagree
Neutral
5. In AIB, the purpose, authority and responsibility of the operational
audit division head is defined in a formal written document

Strongly agree Disagree

Agree Strongly disagree

Neutral
34
35