The Mechanism Of Internal Audit And Enterprise Risk Management

In the late 1980s, the global economic integration trends result in new markets, product and technology, which speed up a industrial and commercial development and at the same time, capital market volatility has increased. At the beginning of 21st century, corporate insolvency and the frequent outbreak of crisis of governance seriously damaged the interest of the investors, employees and stakeholders, thus, the prelude of risk management opened. Companies need to avoid risk and make risk management as one of the core strategies of the company's governance, and the needs have been more matured. Internal audit steps into a new chapter. Under the situations which risk of global business has become more and more serious, in order to make the internal audit and risk manage move forward synchronously, in 1999, IIA gave internal audit a new definition. How to infiltrate risk management and how to play its role in risk management has become the world's academic research focus.This paper, first, analyzes the domestic and international research literature of internal audit in risk management; reviews the development of internal audit as well as modern risk management-overall risk management. Second, it analyzes the practical causes of internal audit involving in the field of risk management, discusses the mechanism of internal audit which bases on risk management and then focuses on the current situation and major problems of internal audit in risk management, and analyzes the causes of major problems. Finally it regards the risk management as the core, gives the solutions to improve internal audit. Starting from the historical evolution, this research analyzes the necessity of development of hidden things, and through the analysis of the present situation, people can find the accurate position and solutions for internal audit to participate in risk management.