Research On Value-added Internal Audit Model

According to the brand-new definition made by IIA, internal auditing is an independent, objective assurance and consulting activity, and to add value and improve organization operation has become the target of internal audit. In recent years as the global economic integration accelerates, more and more Chinese enterprises move towards globalization, and strengthening the risk management needs turns more and more urgent. Especially in the international financial crisis, more and more enterprises recognize that strengthening enterprise risk and crisis management to ensure sustainable development of enterprises, the enterprises themselves and society as a whole is of great significance.In this paper, on the basis of questionnaire survey and special interview of internal audit officers and administration authorities of four listed companies in Xiangtan City, we conclude three kinds of internal audit models: compliance model,transition model,value-added model. Through comparative analysis of these three models, we obtain three factors affecting the internal audit models: competition and risk,ownership property and structure,enterprise management level and concept. And compared with compliance model and transitional model, the audit function orientation of value-added internal audit model goes further from confirmation to advisory, with its audit form from feed forward to concurrent and feedback, its audit method from traditional account-based audit to internet and risk-based audit, its audit content extending to decision-making level, affiliation relationship of its audit organ from general manager-led to the management by board of supervisors or board of directors. This dissertation thoroughly analyzes the characteristics and implementation necessities of value-added internal audit models, referring to brand-new research outputs on theory and practice of internal audit in home and abroad, and the dissertation founds value-added theoretical framework of internal audit model with adding of value as audit objective,information system as audit foundation, management procedures as audit route, strengthening of internal control as audit core. Combined with the theoretical framework, we review the internal audit practice of Xiangtan Steel and Iron Group.Value-added internal audit model bases on information systems, integrates audit resources, innovates audit form, optimizes audit method, supervises and appraises management process, improves the efficiency of organizational operations, integrates risk management, provides objective confirmation and advisory on risk management effect for board of directors, establishes and improves internal control, conducts adequacy and effectiveness audit of internal control to ensure the effective operation of internal control, improves corporate governance and increases value for organization. It has been found that internal audit has become one of the"Big Four"cornerstones of effective corporate governance. Developing adequately"immune system"function of internal audit and accelerating transformation of enterprise internal audit to the value-added model can benefit both the healthy development of company and industry and the comprehensive,coordinating and sustainable development of society.