Factors Affecting the Internal Audit Effectiveness of Steel Enterprises in Vietnam

This article provides empirical evidence on factors of internal audit (IA) characteristics affecting the internal audit effectiveness in steel enterprises in Vietnam. The study uses data from survey obtained from 114 responses representing owners, managers, and internal auditors from 38 steel enterprises in Vietnam for period from 2018 to 2019. Data collected is firstly checked with Cronbach’s Alpha, then the EFA test, and the model linear regression is used to test the relationship between internal audit characteristics and internal audit effectiveness. Results reveal that internal audit effectiveness in steel enterprises in Vietnam is influenced by various internal factors, including the size of internal audit, the scope of internal audit, the capacity of internal auditors, the independence of internal auditor, and the operational bases and methods of internal audit. Based on the research results, the paper makes six recommendations: strengthening operational basis of IA; increasing the independence of IA; increasing the size and capacity of IA staff; expanding and not underestimate the scope of IA; and reforming the internal governance structure. These proposed recommendations could be applied, not only for steel companies in Vietnam, but also for other companies in Vietnam or other companies in jurisdictions that have similar conditions.