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    of 19

    PRINCIPALS HEALTH AND BUSINESS

    COLLAGE JEMO COMPUS


    ACCOUNTING AND FINANCE
    DEPARTMENT

    ASSESSMENT OF INTERNAL AUDIT PRACTICES IN CASE OF


    THREE BRANCHES OF BERHAN BANK S.C

    BY: Id. No.


    Demeke Tadesse………………..0007/12
    Genet Belay……………………. 0040/12
    Shikuria Muhajir………………..0022/12
    Alemetsehay Ayele……………..0002/12
    Ebnezer Masresha………………0011/12
    Birtukan Tamiru…………………0006/12
    Advisor: Mr. Zerihun
    OUTLINE OF PRESENTATION
     INTRODUCTION
     PROBLEM OF THE STATEMENT
     OBJECTIVE
     SCOPE
     SIGNIFICANT OF THE STUDY
     LIMITATION OF STUDY
     METHDOLOGY
     DATA ANALYSIS AND PRESENTATION
     CONCLUTION AND RECOMENDATION
    INTRODUCTION
    The internal control process is a
    mechanism for reducing instance for
    fraud, misappropriation and errors. It
    has recently become more extensive
    in addressing all the various
    activities face by the organizations
    and it is now well recognize that
    internal control process is critical for
    organization’s ability to meet is
    goals and objectives and to maintain
    its financial viability.
    Background of the
    organization
     According to Brehan Bank’s annual report
    (2014), Behan Bank was established in
    accordance with Article 304 of the
    Commercial Code of Ethiopia with the
    objective of operating in the banking
    industry. This objective has been ensured in
    Article 3 of the Memorandum of Association
    of the Company. The Bank was registered and
    licensed by the National Bank of Ethiopia on
    27 June 2009 with an authorized capital of
    300,000,000 and subscribed capital of Birr
    154,736,000 divided into shares of 1000 Birr
    par value each. The bank is also one of the
    youngest banks currently reached the
    Statement of the problem

    This study support in identifying and


    reducing the gap between actual
    practice of the bank and the general
    procedure that are stated theoretically.
    Thus, the study assessed the auditing
    practice of Berhan Bank in case of
    three Branches and came up with
    some solution for potential problem
    which resulted in lack of continuous
    services assurance and the degree of
    independence of internal auditor.
    Research Questions
     This study was supposed to answer the
    following research questions.
     Is their well-organized internal auditing practice
    in case of three Branches of Berhan Bank?
     Does the principle of internal auditing apply in
    three the three branches Behan Bank S.C?
     What factors affecting internal auditing practice
    of Berhan Bank in internal audit in the three
    Branches?
     What are the major drawbacks of auditing
    practice of Berhan Bank in internal audit in the
    three Branches ?
    Objective of the study

    General Objective
     The general objective of this study was to assess internal
    auditing practice in case of three Branches of Berhan
    Bank S.C.
    Specific objective
     To investigate the internal auditing practices in case of
    three branches of Brehan Bank S.C.
     To identify the principle of auditing that applied in the
    case of three branches of Berhan bank.
     To assess factors that affect internal audit practice of the
    Bank in internal audit in the case of three branches of
    Berhan bank.
     To identify the major drawback of internal auditing in the
    Bank in internal audit in the case of three branches of
    Berhan bank.
    Significance of the
    study
     The major benefits of this study were to provide
    valuable information on Berhan Bank internal
    audit practice and performance of the Bank’s top
    management, employees, outsiders,
    shareholders, and other stakeholders and to show
    the strength and weakness of the current internal
    auditing systems, This study was also used as an
    additional reference to the existing literatures
    and was used as reference material for other
    researchers who wish to conduct further
    researches in the same area.
    Scope of the study

    The scope of this research will be


    limited to assessing internal auditing
    practice of Berhan Bank’s Jemo, Furi,
    and Lebu Branches. This study mainly
    focus on the manual reports mainly on
    factors that affect the internal auditing
    practice, the challenges, and the
    strategies uses to alleviate the
    problems in the bank and we used the
    data of four consecutive years report,
    (2011-2015).
    Limitation of internal Control

    Shortage of time
    Financial problems and
    somewhat reference materials
    Some staff members are not
    willing to give information
    Research Design

    ◦ The study was applied descriptive research design to


    describe the data that was collected through various
    sources.
    Research approach
    In this study both qualitative and quantitative (mixed)
    research approach was applied.
    Type and Source of data
    We have used both primary and secondary data
    source.
    Primary data source
     To collect primary data the we was used structured
    interview and questionnaires.
    Secondary data source
     to get secondary data different documents from
    different sources was gathered from published
    materials, magazine, journals and reports.
    Sampling size

     The internal audit Practice in case of three


    branches , according to human resource, has
    the total population (employees) of 16.
     And from those director and team leaders
    are 3 in number, the number of senior
    auditors is 2 and the number of auditors in
    different teams and AA City branches are 3.
     From total population of 15 employees, we
    have taken 10 employees, including
    manager, based on Yamane Sample size
    formula (n=N/ (1+N (e) 2)). The Sample
    respondents are selected on the basis of the
    distribution of population
    Sampling techniques

    The sampling technique that we


    used to obtain data from
    respondents is non-probability
    and judgmental i.e. convenience
    sampling to find the target group
    of the study who has direct job
    related. This is because of their
    convenience, accessibility and
    proximity to the researchers.
    Data Analysis

    The data that was collected from


    primary and secondary source
    was analyzed using descriptive
    statistics. The analytical tool was
    also supported using cross
    tabulation and percentage.
    Data Presentation and
    Analysis
    Response rate
    A total of 15 questionnaires were
    distributed to selected employees of
    Berhan Bank Audit internal Department at
    the end of which 12 questionnaires,
    representing 80% were returned, the
    entire analysis given in this study was
    based on the actual returned
    questionnaires.

    Descriptive Analysis
    Under this section the research discussed
    the respondent background profile,
    Conclusion and Recommendation

     Research Findings
     The findings of our assessment on Berhan Bank
    internal auditor’s activities are summarized as follows.

     There is ignorance of an experts including Auditors on


    unusual activities and varying procedures of internal
    control rather than updating self with timely financial
    system advancements
     Sometimes the controlling system of internal auditors
    disrupts the daily activities of a Bank
     We have evaluated irresponsibility of some experts on
    their duties during an occurrence of some misbehave.
     An independence of Auditors is not maintained
    properly.
    . Conclusion
     From this study, our team has concludes that the overall
    internal audit practice of the Behan Bank S.C in three
    Branches was more or less adequate even though there
    were some issues that are not addressed to practice internal
    auditing service effectively and efficiently.
     The Bank uses (applies) internal auditing practice and its (Internal
    Audit) performance is relatively good. .
     The bank has been applying principles of internal auditing for
    some extent and we recommend it to be implemented in an
    advanced way for the future.
     Internal auditors of the Bank has made an assessment of risk, plan
    in terms of comprehensiveness, audit in terms of clarity, coverage
    of priority areas and the timeliness of improvements needed.
     Even though the Bank’s performance on internal control system
    (internal auditing practice) is better, there is some week sides
    encountered and these will be resolved if the management of the
    bank givens due attention and priority.
     The internal audit department has been organized in such a way
    that it has been put in the account section. It controls the
    Recommendation
     The main purpose of our research team is to evaluate the internal
    audit practice of Berhan Bank’s Internal Audit practice Based on the
    above findings we suggests the following recommendations to
    improve the internal auditing activities of the company.
     The plan of the internal audit of the company should be consistent
    with established goals and objectives within the timeline the plan.
     It is recommendable that the bank should periodically evaluate its
    internal control system.
     Even though the bank uses principle of internal auditing practice,
    the management shall create safe conditions for the auditor to do
    their job in freely without any influence them.
     It is recommendable that the banks have to facilitate trainings for
    the auditors to be competent and properly implement the rule and
    regulation.
     Internal auditors should perform their duties with responsibility and
    due care to become more efficient and effective and prepare
    themselves for career improvement.
     The overall internal auditing practice of the Berhan Bank is
    relatively better and for future the bank gives attention for
    THANK YOU !

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