Factors Determining Internal Audit Effectiveness: Empirical Evidence from Large Manufacturing Companies in Tigray, Ethiopia

This study explores factors determining internal audit effectiveness within large manufacturing companies in Tigray, Ethiopia. The topic has received limited scholarly attention, particularly in the context of developing countries. Recognizing the absence of universally accepted assessment frameworks, the research employs mixed methods approach, drawing on data from questionnaires and focus group discussions conducted across 34 large manufacturing firms. Quantitative analysis was performed using an ordered logit regression model complemented by qualitative content analysis to capture deeper organizational insights. The study has examined the influence of several factors, including internal auditors' independence, management support, internal auditors' competency, internal auditors' experience, internal audit department's size, existence of an approved internal audit charter, and presence of an audit committee on internal audit effectiveness. The study's findings reveal that independence, management support, and competency have a positive and statistically significant result on internal audit effectiveness. These insights hold critical implications for policy makers, regulators and corporate leaders aiming to strengthen internal audit standards and practices, enhance operational efficiency, and improve internal control systems within the manufacturing sector.