Relationship Between Internal Audit And Corporate Governance Among Commercial Banks In Ethiopia.

Abstract

This study was conducted to examine relationship between internal audit and corporate governance among commercial banks in Ethiopia. The concept of internal audit and corporate governance has not been studied in the past more so among commercial banks. Therefore this study sought to examine role of internal audit and how it relates to corporate governance among commercial banks in Ethiopia. Research design was explanatory kind of research and the research was conducted on 13 purposely selected sample commercial banks by adopting mix research data type. Data was collected using a structure questionnaire and distributed to selected sample commercial banks. It was analyzed by using descriptive statistics aided by spss data analysis tool and for each sample select commercial banks a level of internal audit independence and a level of corporate governance. Pearson Correlation was used to analyze the relationship between internal audit and corporate governance within a test of significance of 95% confidence level. The study further found out that there was a strong linear relationship or there was positive correlation coefficient between internal audit independence and corporate governance by correlation factor of 0.676, the study also found a positive correlation between internal audit charter and corporate governance and Professional proficiency as well as Scope of internal audit work was found positive correlation of the corporate governance within commercial banks in Ethiopia. The study recommends that the elements of internal audit practices studied contribute positively to the corporate governance within commercial banks in Ethiopia. The study suggests further studies to be conducted on other elements of internal audit and their influence on good corporate governance within commercial banks in Ethiopia. Keywords; Internal audit, corporate governance, commercial banks