Analysis Of Internal Audit Profession Risk

As a management function, internal audit is a recontrol to various other controls, whose essential purpose is to ensure the discharging of accountability. Since 1941, the profession has developed rapidly, which has been an important part of the structure of modern organization in developed countries. For the present, the degree of professionalism gets more and more reinforced. For example, the number of IIA members increase continuously. Statement of Responsibilities of Internal Auditing, Practice Standards of Internal Auditing, and Ethical Standards has been promulgated and implemented in succession. IIA has established a highly regarded certification program resulting in the designation of Certified Internal Auditor (CIA) for those who meet the testing and experience requirements. From the Foreign Corrupt Practices Act of 1977 to governing standards for listed company promulgated by New York Stock Exchange of 2003, they all strengthen internal control by establishing internal audit. All those indicate that internal audit has been accepted as a mature profession in developed countries.In china, the establishment of China Institute of Internal Auditors (CHA) means the beginning of professionalism. Meanwhile, a series of audit regulations and audit standard framework have been promulgated in 2003. Since its founding, CIIA has made wide communication with many countries in the audit field. At present, there are sixteen sites for CIA examination and examinees increase annually. Now, more than 300, 000 staff is performing internal auditing and its number grows with each passing day.With the development of global economic integration and hierarchy, internal audit plays an important role in corporate governance, whose auditing scope broadens continuously. The reform of state-owned enterprises and the rapid development of socialist market economy bring an unprecedented chance for internal audit. Since internal audit and public audit all perform consultative engagement, public audit widen their engagements step by step. Some organizations take account of good service, and cost-profit factor, they may weaken the function of internal audit, cut down the internal audit staff, reduce and even cancel audit organization. Then they may make a contract with public audit firms. So the internal audit profession would confront value crisis and professional risk.From the simple discussion above, we can know that the problem of survival crisis is the biggest risk for internal audit. This paper starts with analyzing the causes ofprofessional risk, and then puts forward the measures for preventing and controlling it, hoping that those can give a hand with the survival and development of internal audit. According to the traditional analysis method, this paper can divide into four parts.1. The summary of internal audit profession risk . Beginning with the definition of professional risk, I define the professional risk of internal audit in theory, then analyses its classification. Following, I indicate the weakness of professional characteristic. Finally, I analyze the causes of internal audit profession risk.2. Analysis of internal audit profession risk in China. Owing to the backward practice of internal audit, the weakness of professional characteristic manifests itself clearly. The professional risk differs from developed countries' . On the basis of analysis on present situation, I think that independence, professional management, internal audit environment and the profession itself may threaten China internal audit.3. Safeguards to control professional risk of internal audit. On the basis of two parts above, the author carries out researches on how to prevent and control the professional risk of internal audit. In my humble opinion, there are eight safeguards to meet the needs for enhancing the risk management, which would promote the rapid development of internal audit.