The Role And Application Of Internal Auditing In Outsourcing Risk Management

With the development of modern management, outsourcing became a tactic used by management to deal with the new changing competitive environment. It does not focus on cost reduction, but also on resource strategy. When outsourcing brings benefits to company, it also nurtures risks. How to identify and control the risks came up with outsourcing operation turns to a obstacle in front of company. Business scandals and decline in investors' confidence in financial statement pressure the board of directors put high priority on company governance and internal audit. Internal audit advances further due to the hard work of all organizations. Internal audit pays more attention to risk management and company governance. Its new task is to integrate risk management and supervise continuously. For one thing, there is more risk than we thought during the process of outsourcing. As to the anther, internal audit make risk management as its next step. However in reality, internal audit does not concern outsourcing enough. That is the background of this essay and key points of this essay are as follows: the opportunity for integrate outsourcing risk management and internal audit,the role of internal audit in outsourcing risk management and the detailed application of internal audit in outsourcing risk management . Meanwhile, internal audit profession just booms the study on internal audit and risk management. First, the association of internal auditors revised the definition of internal audit, illustrating the change of its role. And then, the association integrates risk management into the system of internal audit and asserts that the direction where internal audit develops to. With the execution of Sox Audit, there are more articles studying that how internal audit manages the risks associate the outsourcing. Chapter 1 mainly discuss the basic idea of outsourcing and related risks; Chapter 2 deals with the change of internal audit and its function in the risk management; Chapter 3 focuses on the methodology and procedure of internal audit in the outsourcing risk management; Chapter 4 discuss internal audit outsourcing as a separate special case.