Department of Accounting and cooperative studies

Permanent URI for this collectionhttps://repository.mu.edu.et/handle/123456789/113

Browse

Now showing 1 - 20 of 27

ANALYSIS OF RELATIONSHIP BETWEEN BANK SPECIFIC FACTORS AND PROFITABILITY: A STUDY ON PRIVATE COMMERCIAL BANKS IN ETHIOPIA
(Mekelle University, 2025-11-24) TEMESGEN TESFAYE
This study aimed to examine the impact of bank-specific factors on the financial performance of five selected private commercial banks in Ethiopia. Employing both descriptive and explanatory research designs through a mixed-methods approach, the study utilized primary data collected via questionnaires from top bank managers and secondary data from audited financial statements spanning ten years (2014/2015–2023/2024). Descriptive, correlation, and multiple regression analyses were conducted to interpret the data. The descriptive results indicated that while ROA fluctuated over time, it generally remained stable around the mean; non-performing loans (NPLs) were mostly low, though a few banks showed poor asset quality; and liquidity levels varied but were generally strong. Correlation analysis revealed that ROA had a significant positive relationship with capital adequacy and a significant negative relationship with asset quality. Regression results confirmed that capital adequacy and liquidity positively influenced profitability, whereas asset quality had a negative effect. Based on these findings, the study recommended enhancing systems for managing credit risk, adopting proactive capital and liquidity management frameworks, and strengthening regulatory oversight on asset quality. Finally, it acknowledged certain limitations and proposed areas for future research.
Assessing the Challenges facing External Auditors Auditing Public Enterprises in Ethiopia; the case of Auditors of Audit Service Corporation
(Mekelle University, 2024-11) Feven Antonious
This research explores the major challenges faced by external auditors in auditing public enterprises, specifically focusing on the Auditors of Audit Service Corporation (ASC). Utilizing a descriptive survey research design, the study employs a quantitative methods approach. The quantitative aspect involves the use of structured questionnaires distributed to 95 ASC audit directorate staff whereas 93 questionnaires were returned. Data analysis is conducted using SPSS version 20, presenting results through frequency tables and summary statistics. Key findings reveal significant challenges such as lack of cooperation from management, difficulties in obtaining necessary documentation, complexity of regulations, issues with internal controls, and political influences affecting audit objectivity. Additionally, resource constraints, challenges in assessing risk management practices, and resistance from public enterprises are highlighted. The role of external audit committees, training adequacy, and the impact of technology on mitigating audit challenges are also examined. Results show significant challenges, including resistance from management, difficulties in obtaining documentation, complex regulatory environments, issues with internal controls, and political influences on audit objectivity. The study underscores the need for improved methodologies, regulatory framework changes, and enhanced training programs to better equip auditors in addressing these challenges effectively. Overall, the research provides a comprehensive understanding of the obstacles faced by external auditors in auditing public enterprises and offers recommendations for enhancing the audit process.
Assessment of Challenges and Opportunities of Private Investment in Garment &Textile Firms :( A Case study inMekelle City)
(Mekelle University, 2024-09) ZenebuFitsum
Many Private investments in manufacturing have played their roles to employment creation and poverty alleviation of wider group of the society in general and urban youth in particular.However these sectors have been bound with various complicated and interlocked constraintsThe purpose of this study is thereforeto investigate the opportunities and challenges of private investment in Mekelle citywith particular emphasis to the garment & textile sector. Clear understanding of these will enable to harness the potential benefit and to face the challenges that hindered their growth. The study has used both primary and secondary data source.The target populations of the study were investors & owners involved in the private investment of the garment and textile sector and government officials in the study area. By stratifying the investment stage, samples were selected by employing proportional stratified sampling technique and 188 questionnaires were distributed; out of which 166 were returned. An interview is also conducted with 20 respondents: 10 selected from operators/owners and 10 from investment officials. Data gathered were analyzed based on these 166 responses using SPSS 20 software package. Descriptive research design was employed and Outputs were reported using frequency, percentage and mean results. The findings indicated that even though the investment environment in such sector is improving, still there are problems in the area of financial access, inadequate infrastructure, production inefficiency, influx of smuggled goods, and forex shortages that hinder their growth.These sectors have bright prospects if action is taken by the government. To benefit from opportunities and overcome its challenges, government should control smuggled goods and supportand facilitate these sectors to modernize and further increase their production capacity and enhance human resource capacity through training and working capital.Hence, to promote the performance these sectors, it is essential to take measures that can improve real income of people, and make public investment in basic infrastructures and institutions that are crucial to attract private investment. Besides, ensuring stable investment environment and macro-economic and political stability are necessary to build lasting confidence of privateinvestors.
Assessment of Internal audit effectiveness: The case of selected Federal Public organizations of Ethiopia.
(Mekelle University, 2025-10-24) Henok Sewasew
The main concern of this study is to assess and describe the challenges that internal audit department at public organization and how these challenges could be addressed. This study employed a descriptive research design. The study used purposive sampling in identification of 136 respondents as target population which encompasses from internal auditors and 10 from executives of control department residing in Addis Ababa. Data collected from questionnaires was coded and analyzed with the aid of the Statistical Package for Social Sciences (SPSS) version 20 for descriptive statistics. Presentation was by use of tables. Percentages mean mode and standard deviation which enhanced a meaningful description. The study revealed that lack of: management and staff support, shortage of organizational independence, inadequate competency of internal audit staffs and lack of updated audit procedural manuals, lack of BOD attention for internal audit department, feeling of audited as a fault finder, dispute and misunderstanding auditors face from audited, inadequacy of time to operate exhaustively , supervisors` rare in person follow up of resident auditors, insufficient auditors knowledge on contemporary banking systems, lack of qualified staff and scarcity of facilities. To address these findings, the study recommends free access for certification, compilation of updated audit manuals, conducive working environment, awareness creation program to audited, proactive than reactive audit engagement, revision of existing structure and extensive training program to get decisive value adding output out of internal auditing practices.
ASSESSMENT ON THE DETERMINANTS OF CREDIT MANAGEMENT AND ITS CREDIT DEFAULT RISK IN THE CASE OF COMMERCIAL BANK OF ETHIOPIA, ALAMATA BRANCH
(Mekelle University, 2025-06-28) Halefom Abebe
The purpose of the study is to look Credit Default Risk and its Determinants of In the case of commercial bank of Ethiopia ,alamata branch . To this end, the researcher employed quantitative approach with explanatory research design where the effect caused by the independent variables on the dependent variable is observed through regression analysis. The purposive sampling techniques have been employed by researcher in order to select 100 sample sizes from commercial banks of Ethiopia. The primary data was collected using structured questionnaire. Then, the result of multiple liner regression showed that five variables such as use of collateral, credit risk identification, credit monitoring, and credit policy and credit analysis have positive and statistically significant effect on credit risk management system. The explanatory variables incorporated in the model have only explained 44.7 % of the model. The remaining 55.3% of changes in the on credit risk management system was explained by other explanatory variables that not included in the model .The quantitative data used for econometric analysis are five financial variable that makes the model fit and relating mainly to commercial bank of Ethiopia credit exposure and lending decision quality. The choice of these ratios is based on a survey of related literature on credit risk determinants Based on the findings of the study, the researcher forwarded possible recommendations for the commercial bank of Ethiopia in the study area to work on statistically significant variables due to fact that they have significant influence in improving credit risk management system. For instance, having sound credit policy enhances the credit risk management system. So, that it is recommended to banks should work on sound credit policy to improve credit risk management system that enables to advance the capacity of commercial bank of Ethiopia to deliver different financial services to the public.
ASSESSMENT ON THE DETERMINANTS OF CREDIT MANAGEMENT AND ITS CREDIT DEFAULT RISK IN THE CASE OF COMMERCIAL BANK OF ETHIOPIA, ALAMATA BRANCH
(Mekelle University, 2025-06-28) Halefom Habtu
CURRENT STATUS, CHALLENGES AND OPPORTUNITIES OF INTEREST FREE BANKING IN ETHIOPIA
(Mekelle University, 2024-12) TEKLEMARIAM ESTIFANOS
Interest Free Banking (IFB) services offer ethical, Shariah-compliant financial solutions and are gaining popularity in Ethiopia among Muslim and non-Muslim clients. This study examines the socio-demographic profile of IFB clients, perceptions of services among stakeholders, managerial insights, and the operational status of IFB. A mixed-method approach was adopted, utilizing structured questionnaires for quantitative data and interviews with IFB division managers for qualitative insights. Descriptive statistics summarized key findings, while thematic analysis interpreted qualitative responses. The study reveals increasing acceptance of IFB services, driven by their ethical principles, but identifies challenges such as limited public awareness, misconceptions, and economic uncertainties. Clients and employees view IFB as a viable alternative to conventional banking, and managers highlight the need for Shariah compliance, fund segregation, and employee training. Key opportunities includeIX product diversification and digital banking solutions to meet evolving client demands. To unlock IFB’s full potential, the study recommends raising public awareness, fostering community engagement, and investing in innovative financial products and digital services. Strengthening Shariah governance and enhancing operational efficiency are essential to promoting ethical financial inclusion in Ethiopia.
DETEMINANTS OF SELECTED COMMERCIAL BANKS LENDING DECISION IN ETHIOPIA
(Mekelle University, 2024-12) TSEGABRHAN TAJEBE SHESHAY
The main objective of this study was to investigate the determinants of lending decision of commercial banks in Ethiopia. In order to achieve the research objectives, the study used secondary data of 14 state owned and private commercial banks of Ethiopia from 2014 to 2023. The study also used quantitative research approach, descriptive and explanatory type of research design by adopting purposive sampling technique. Bank specific; industry specific and macroeconomic variables were analyzed by using the balanced panel random effect regression model. Eleven variables that affect banks’ lending decision were selected and analyzed. The results showed that bank size, real GDP growth rate, volume of deposit, Return On Asset, Bank concentration were positive and statistically significant while liquidity ratio, exchange rate of birr to dollar, lending interest rate, cash reserve requirement ratio and inflation rate were found to be statistically significant with negative effects respectively on total loans and advanced by commercial banks in Ethiopia. However, credit risk ratio was statistically insignificant with negative effects on commercial banks’ lending decision. Therefore, commercial banks should adjust their lending decision in response to the signals from these factors, such that positive signals like bank size , real GDP growth rate, volume of deposit, Return on Asset and Bank concentration in this study make banks become more favorably disposed to lending.
DETERMINANT OF LENDING RATE FOR COMMERCIAL BANKS IN ETHIOPIA: CASE OF SELECTED PRIVATE COMMERCIAL BANKS
(Mekelle University, 2024-09) SELAMAWIT GEBREEGZIABHER HAGOS
This study examines the determinants of lending rate in Ethiopian private commercial banking sector. The study used panel data collected from annual reports of nine private commercial banks operating in Ethiopia during the period 2013 - 2022. Accordingly, the lending rate of commercial banks is determined by bank, industry and macro-economic related factors. A quantitative research approach and explanatory design were adopted in carrying out this research. Secondary data were collected from annual audited reports of selected private commercial banks using purposive sampling technique. The study employed descriptive and econometric estimation techniques to analyze the influence of bank, industry and macroeconomic factors on lending rate. The analysis conducted using the econometric package STATA V.13. The study revealed that credit risk and market share have a positive and significant impact on bank lending rate; whereas, operating cost, reserve requirements and liquidity risk have a negative and significant effect on lending rate. However, bank size and inflation are not significant determinant of lending rate. The study recommends commercial banks to improve operational efficiency and effectiveness.
DETERMINANTS OF CREDIT DEFAULT OF MICROFINACE INSTITUTIONS BORROWERS: THE CASE OF MEKELLE CITY, TIGRAY REGION, ETHIOPIA
(Mekelle University, 2025-09-24) TESFSAY GEBREHIWOT
Microfinance involves the provision of micro-credit, saving and other services to poor people that are excluded by the commercial bank for collateral and other reasons. The role of microfinance institutions is to serve needy people generally in the region and specifically in the city. This study aims at identifying the major socio-demographic factors, business related, institutional and loan related factors that determine credit default of MFIs borrowers. In fact, identifying and analyzing such determining factors of credit default is vital in the achievement of profitability and sustainability of MFIs. The survey population was divided into defaulters and non-defaulters based on credit repayment performance. In this connection, the researcher collected data from primary and secondary sources. The primary data has been collected by interviewing and using a structured questionnaire from 400 defaulters and non-defaulters’ respondents with the help of trained enumerators. The questionnaire includes both open and closed- ended questions. In addition, secondary data were gathered from Mekelle citifies offices and other related relevant publications. Descriptive statistics with the help of tables and Percentages were used in analyzing the collected data. In addition to this econometric model by employing SPSS versions 16.0 were used to analyze the collected data. Furthermore, a chi-square(X2) test of independence was employed to compare the relationship of dependent variable with independent variables. A total of twelve explanatory variables were included in the regression and the result of the model show that age, education level, family size, other sources of income, and method of lending are significant factors affecting loan repayment in MFIs. In contrast, gender, loan size, business experience, timeliness of loan release, distance from MFI, and suitability of installment period were not significant in predicting repayment performance. Based on the findings of the study, some recommendations were made to improve loan repayment performance in the study area. To improve loan repayment of MFIs interventions should be tailored to borrowers' age, education, and family size, with a focus on providing financial education for those in larger households. Efforts should also prioritize strengthening reliable income sources and financial management skills, particularly for borrowers with informal income streams. Additionally, enhancing group lending mechanisms with better peer monitoring and stricter institutional oversight will help reduce default rates.
DETERMINANTS OF DONOR FUND UTILIZATION EFFECTIVENESS: A CASE STUDY ON AFRICA CDC IPF, ETHIOPIA
(Mekelle University, 2025-10) FISSEHA MOGES
The goal of this study was to determine what determines the Africa CDC IPF initiative in Ethiopia's efficient utilization of donor funds. We sought to understand why money isn't always spent as effectively as intended. In order to accomplish this, we used surveys and an examination of important project documents to get feedback from 115 employees who were directly involved in the project at different government agencies. This research identifies five key elements that have a significant impact: sound financial management, capable leadership and management, appropriate technology and expertise, consistent donor behavior, and efficient procurement procedures. Many of the fundamentals are in place, but some significant obstacles are preventing progress. For example, throughout five years, the project only used roughly half of its allotted budget. The procurement procedure is a significant roadblock; it is frequently sluggish and hampered by red tape. Additionally, we discovered that equipment purchased with project funds isn't always accurately documented and that more specialist training in foreign aid management is required. In summary, for a project’s success, the proper functioning of all the components working together is essential where all these parts work together. When one part, like procurement, falters, it drags everything else down. On the other hand, all the components will also be challenged when one, such as procurement, fails. To change this, the initiative must engage in team training, improve asset tracking, streamline its purchasing procedures, and cultivate a more open and honest culture with its funders. The secret to making sure the donor's contribution actually fulfills it promises to get these components just right.
DETERMINANTS OF EFFECTIVNESS OF RISK MANAGEMENT in PRIVATE COMMERCIAL BANKS IN ETHIOPIA.
(Mekelle University, 2024-09) KIROS WELDU
Banks and other financial institutions usually play a significant intermediary role between borrowers and lenders for the progress of a stable and healthy economy of a nation. In Ethiopian banking industry Commercial banks are the most dominant banks categorized as public and private banks. This study was designed to examine the relationship between risk management effectiveness and its determinants in private commercial banks. Capital adequacy was used as a proxy for risk management effectiveness in commercial banks. Ten explanatory variables namely bank specific factors (credit risk, liquidity risk, profitability, bank size, operating effectiveness, market risk) and Macroeconomic factors (GDP growth, inflation, lending interest rate and exchange rate) were used as independent variables. From the total population of 16 private commercial banks purposive sampling technique was used to select eight private commercial banks in Ethiopia. Secondary data were used to estimate the relationship between independent variables and capital adequacy ratio of banks. Balanced panel data set of ten fiscal years was collected from the audited financial statements of selected private banks in Ethiopia for the period of 2012 – 2022. Both descriptive statistics and econometric model was employed where descriptive statistics were used to describe the variables. In a panel regression analysis random effect model was used to determine the effect of bank specific and macroeconomic variables on risk management effectiveness of banks. The regression result shows that credit risk has negative impact where Bank size and profitability has a positive effect on risk management effectiveness in private commercial banks. The macroeconomic factors have positive effect on risk management effectiveness of private banks where exchange rate has a significant effect. The study concludes that risk management effectiveness of banks is highly determined by bank specific and macroeconomic factors and private commercial banks are recommended to introduce risk based control systems in overall banking system operations and Businesses.
Determinants of Financial performance of Microfinance institutions (MFIs) in Ethiopia
(Mekelle University, 2024-11) Kibrom Welday
The main objective of this study was to investigate and analyze the Determinants of financial performance in the case of selected micro finance institutions (MFIs) in Ethiopia, with specific emphasis on how Capital to Asset ratio, Firms growth rate, Portfolio at Risk, Operating Efficiency ratio, Age of MFI, real gross domestic product growth, Size of MFI, and Government support affect financial self-sufficiency of the MFIs in Ethiopia. Quantitative research approach was used, and the study included a selected sample of 22 MFIs in Ethiopia covering a time period of nine years from 2015 to 2023 (198 observations). The study employed secondary data collection method and the data were obtained from the financial annual reports of MFIs that were available in the national bank of Ethiopia. Fixed effect was used for the Panel data regression analysis of variables. To test the accuracy of the model, the researcher has employed important classical regression assumption tests. The fixed effect regression model’s result coefficient of determination (R-squared) was 0.706, implying that 70.6% of variation in financial performance is explained by the independent variables used in the study. The result of the study indicated that MFIs’ financial performance is significantly influenced by Capital adequacy ratio; MFIs’ size, MFIs’ growth and Age of MFIs. Whereas, portfolio at risk, operating efficiency, gross domestic product, and government support have no significant effect on financial performance of the selected MFIs in Ethiopia.
Determinants of Liquidity in Ethiopian Private Commercial Banks
(Mekelle University, 2025-11-24) Mitku wendye
This study examines the determinants of liquidity in Ethiopian private commercial banks over the period 2011–2022. Maintaining adequate liquidity is vital for the stability and performance of the banking sector, particularly in developing economies where financial markets are shallow and access to external liquidity is limited. The study aims to identify the key bank-specific and macroeconomic factors that influence the liquidity position of private commercial banks in Ethiopia. Panel data were collected from audited annual financial statements of selected private commercial banks and macroeconomic indicators obtained from the National Bank of Ethiopia and the World Bank. The study employed descriptive statistics, correlation analysis, and panel regression models to analyze the data. After conducting model specification tests, the Random Effects model was selected as the most appropriate estimator. The empirical results revealed that capital adequacy ratio (CAR) and profitability (ROA) have a positive and statistically significant influence on bank liquidity, indicating that well-capitalized and profitable banks are better positioned to maintain adequate liquidity buffers. Conversely, non-performing loans (NPL) and loan growth (LGR) exhibited negative and significant relationships with liquidity, suggesting that poor asset quality and aggressive credit expansion tend to constrain liquidity. Among macroeconomic variables, GDP growth rate positively and significantly affected liquidity, while inflation had a negative though marginally significant impact. Other variables such as bank size and interest rate spread showed weak or insignificant effects. Oveall, the findings imply that internal bank management practices and financial strength play a more decisive role in determining liquidity than external economic conditions. The study concludes that improving capital positions, enhancing profitability, managing credit risk, and maintaining prudent lending policies are critical to sustaining liquidity in Ethiopian private banks. It further recommends that regulators strengthen supervisory frameworks and promote macroeconomic stability to support the soundness and resilience of the banking sector.
DETERMINANTS OF LOAN DEFAULT IN LEASE FINANCING A CASE OF DEVELOPMENT BANK OF ETHIOPIA
(Mekelle University, 2024-09) BELAY TAFESSE
This study identifies determinants of lease loan default, including Lessor related, Lessee related and external factors, on lease loan default. The aim of this research was to examine determinants of lease loan default; there is a causal relationship between each factor and lease loan default. The study utilizes primary data collected through a close-ended questionnaire. The study presents the results obtained from 75 survey questionnaires completed by customers of selected districts of DBE. To present and describe the respondents' demographic characteristics, descriptive data analysis using tables was employed. For examining determinants of lease loan independent variable (Lessor related, Lessee related and external factors) on the dependent variable (lease loan default), an explanatory research design is adopted, employing regression analysis. The collected data is analyzed using descriptive statistics, correlation analysis, and regression analysis through SPSS software. The correlation analysis reveals a Moderate association between Lessor related factors, Lessee related factors weakly related with External factors and lease loan default (r=0.534, 0.0.617, and 0.0895 respectively, p<0.01). The regression result found that independent variables such as lack of credit monitoring, appraisal, KYC and longer lease processing time, lack of educational literacy, managerial experience and inappropriate business location, political instability, foreign currency fluctuation and inflation, significantly and positively influence lease loan default. Therefore, these factors primarily determine the lease loan default in Development Bank of Ethiopia. Therefore, the Development Bank of Ethiopia should prioritize improving its operations to mitigate the risk of defaults and consider location-based risk assessments when extending leases to lessees, particularly in regions with less favorable economic conditions. It is also crucial for DBE to factor external influences when assessing credit risk and designing lease agreements, and government and policy makers should have to maintain external factors in order to have sound finance through lease.
EXAMINING HOTEL MANAGERS’ FINANCIAL COMPETENCIES: EVIDENCE FROM FOUR-STAR HOTELS IN ADDIS ABABA
(Mekelle University, 2025-09-24) SISAY TADESSE
In the current competitive business environment, hotel managers are required to develop a high level of financial competencies to deliver efficiency and effectiveness in their day-to-day activities, which contributes to organizational performance. However, expected hotel managers‘ financial competencies deviate from the actual competencies they acquired through experience and curricular training. As the hotel industry in Addis Ababa, Ethiopia, has experienced rapid growth in recent years, driven by economic expansion, increased conference tourism, and globalization, this research aims to examine what financial management competencies are considered important from the perspective of four-star hotel managers in Addis Ababa. Utilizing a descriptive research design with descriptive data analysis, the study included heads of departments and deputy supervisors from seven selected hotels. Primary data were collected through questionnaires from 72 hotel managers. The managers identified a set of important skills under six core financial competencies: demand forecasting, budgeting, pricing skills, revenue management, cost management, and asset management. Hotel managers and graduates are expected to build those skills and competency blocks to drive the organizational performance. Stakeholders, including educational institutions and hotel managements, need to collaborate in developing and delivering hotel managers‘ financial competencies that focus on the managers‘ objective contribution to the profitability of the Hotels.
Factors Affecting Bank Profitability in Ethiopia: The case of selected commercial banks in Ethiopia
(Mekelle University, 2025-10-24) Teklay Abraha
This study analyses the impact of political stability and other customary covariates, namely, bank-specific, industry-specific, and macroeconomic determinants on the profitability of banking sector in Ethiopia using two-step system GMM estimator. The study employed a panel data of 17 commercial banks for the period of 2014 to 2024, consisting of 187 bank-year observations. The regression outcomes reveal that political instability has a negative and statistically significant impact on the profitability of banks in the case of Ethiopia. This means that bank’s profitability declines as the country’s political instability rises. Moreover, the regression results reveal that the profitability of banks in Ethiopia is shaped by other customary variables, which are bank-specific, industry-specific, and macroeconomic variables. The findings are stout and dependable as another model specification is undertaken. To the researcher’s knowledge, the present study is the first to analyses the effect of political stability on the profitability of banks in Ethiopia. As a result, it provides better insights for the policymakers, regulators, bank managers, analysts, and other interested parties to improve the profitability of Ethiopian banks.
FACTORS AFFECTING COMPLIANCE BEHAVIOR OF CATEGORY 'C' TAXPAYERS: A CASE STUDY OF HADINET SUB CITY, MEKELLE
(Mekelle University, 2025-09-24) EPHREM BEKELE
Tax is a compulsory financial charge imposed by governments on individuals or legal entities to finance public expenditures. Despite its crucial role in sustaining public services, many governments faced persistent challenges in collecting the appropriate amount of revenue. Understanding the factors that influenced taxpayer compliance was therefore essential for effective tax administration. Accordingly, this study employed an explanatory research design to identify the factors affecting tax compliance behavior among Category C taxpayers in Hadinet Sub-City, Mekelle. A total of 186 Category C taxpayers were selected using stratified sampling followed by random sampling from each stratum, and data was collected from 179 respondents through structured questionnaires. Descriptive statistics such as tables, means, and standard deviations were used to summarize the data, while multiple linear regression analysis was employed to identify the key factors influencing tax compliance. The findings revealed that tax knowledge and awareness, the probability of being audited, and the perceived fairness of the tax system had positive and significant effects on the compliance behavior of Category C taxpayers. In contrast, financial constraints have a significant negative impact. However, the complexity of the tax system, perceptions of corruption, and weak enforcement did not exhibit any statistically significant relationship with compliance decisions. Based on the findings, the study concluded that enhancing taxpayers‘ knowledge and awareness, promoting fairness in the tax system, and strengthening audit capacity are essential to improve compliance. It is recommended that continuous and problem-solving tax training be provided to taxpayers to foster a positive attitude toward taxation. Responsible authorities should also deliver accessible tax education and promote financial literacy among Category C taxpayers. Furthermore, building the capacity of tax auditors and employees to strengthen audit practices, along with implementing measures that ensure fairness in the tax system, is crucial. These interventions are expected to improve voluntary compliance among Category C taxpayers.
FACTORS AFFECTING EXTERNAL AUDITORS INDEPENDENT (CASE STUDY FROM TIGRAY REGIONAL AUDITORS‟ OFFICE)
(Mekelle University, 2025-09-24) Dessalegn Kalayou
External auditor independence is a fundamental principle ensuring objectivity, impartiality, and credibility in financial reporting. The intention/aim of this study is to examine/investigate the factors affecting external auditor‟s independent in Tigray Region General Auditor Office. The researcher employed quantitative research approach with explanatory research design where the effect caused by the independent variable on the dependent variable is observed through regression analysis using SPSS Version 27 Software. Primary data was collected through structured questionnaire from OTAG officials, OTAG Auditors, Authorized Auditors and auditee. The data analysis was done using SPSS Version 27 Software. Descriptive statistics including frequency tables and mean is used to present the results of the study SPSS-27 version by running a correlation test and regression analysis. Accordingly, the result of regression analysis indicating that all variable factors including financial incentives, regulatory pressure, organizational culture, workload and time constraints, professional competence, ethical climate, and quality control mechanisms have positive and significantly 5% p-value less than 0.05 level affected External auditor independence, but personal relationships mechanisms have negative and significantly 5% p-value less than 0.05 level affected External auditor independence. Finally, the researcher recommended to strengthen external auditor independence, organizations must implement robust financial incentives measures, including audit fee, incentive salaries and peridium, strength regulatory pressure, and continuous professional development, Ensuring auditors possess high professional competence and operate within a low workload and time constraints, transparent ethical framework, and introduce quality control mechanisms accountability throughout the audit process. By addressing these key variables, the organization can reinforce the reliability of financial statements and uphold public trust in audit processes.
Factors Affecting Internal Audit Effectiveness in Wegagen Bank S.C (The Case of Head Office Unit)
(Mekelle University, 2025-06-28) Messay Ameha Mekonnen
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. The main purpose of this study was to examine factors affecting internal audit effectiveness in private commercial bank the case of Wegagen Bank S.C. Head office unit. Descriptive & explanatory research design was employed. A cross sectional data was collected using representatives of the sample respondents by using convenience sampling technique; there by 260 out of 741 survey questionnaires were drawn to collect from the sample respondents. To analyze the collected data both descriptive & inferential statistics of multiple linear regressions were employed. The finding of this study regarding to reliability of this study, shows mean average of variables obtained at (r=0.933) which is consistent, the correlation coefficient also shows ‘strong correlation’ i.e. organizational structure, (r=0.715), independence & objectivity of internal auditors, (r=0.517), competence of internal auditors(r=0.728), top management support (r=0.814), existence of audit committee (r=0.874), approved audit charters,(r=0.833). The beta coefficient shows that, organizational structure (β= 0.068), independence & objectivity of internal auditors (β= -0.068), competency of internal auditors (β=0.090), top management support (β=0.124), existence of audit committee (β=0.415), approved audit charters (β=0.386) and audit work quality (β= -0.088), while since pvalue of all variables were p<0.05, hence, all the hypothesis testing were accepted. Regarding to the model summary of this study shows that, the correlation coefficient (r=0.962), coefficient of determination (r=0.925) & adjusted R squared (adj-r2=0.922). In conclusion, independency & audit work quality was negatively influenced internal audit effectiveness. Moreover to this, regarding to descriptive & inferential statistics of the study all the respondents were replied with disagreement option for all the variables and the diagnosis of assumptions in regression model shows that all the assumptions were not violated. Hence, it is recommended that the bank should observe the necessary measures needed to improve the practice of the internal auditing activities' dimensions towards internal audit effectiveness.