Extent of Compliance with Code of Ethics and its Impact on Internal Audit Effectiveness

The study aimed to identify the internal auditors’ compliance with code of ethics issued by the Institute of Internal Auditors, it includes (Integrity, Objectivity, Confidentiality, and Competency) and its impact on the effectiveness of internal audit, the study followed the descriptive analytical method, the study population is composed of internal auditors and members of audit committees in the Jordanian shareholding companies. The questionnaire was used in collecting preliminary data, which was distributed to (363) of them who represented the sample of the study. Arithmetic means, repetitions and (Multiple regression), (Stepwise Regression), (Anova) tests were used in data analysis. The study found that there is a compliance from the internal auditors for the code of ethics moderately, the most compliance was in competency dimension, followed by objectivity and then confidentiality and finally the integrity dimension in terms of the level of compliance in descending order and that there is a medium degree of effectiveness of the internal audit function, the integrity dimension was the most impact on the effectiveness of internal audit, the competency dimension was in the second rank, followed by confidentiality, finally the objectivity was the less impact. There were no differences in the opinions of internal auditors and members of audit committees on the impact of internal auditors’ compliance on the effectiveness of internal audit. The percentage of CIA certificate (Certified Internal Audit) holders reached (2.7%). The study recommended to aware the internal auditors with the importance to adhere to the code of ethics of the profession through holding seminars and courses and motivate them to raise the level of their commitment through providing them a suitable work environment that encourages commitment and reduce the likelihood of being exposed to situations of conflict of interest and work on revising professional and ethical code of ethics for practitioners of internal audit activity and related instructions, in order to rise into the level that enable to achieve the highest degree of compliance with code of ethics of the profession to raise the effectiveness of internal audit through making internal auditors to acknowledge that their compliance to the code of ethics of the profession has an added value and a real impact on the effectiveness of internal audit and not just a commitment to a moral charter which avoids internal auditors from accountability risks.