Study On Related Issues Of Enterprise's Internal Audit Based On The Inner Control System

As sizes of enterprise increased and capital became more and more common, the modern inner control system in enterprise came into being after the industry revolution during the 18th century. The internal control is a series of control activities that the governance, management and implementation of all employees in enterprise work together to achieve business strategy, efficiency and effectiveness, to provide reasonable assurance, financial reporting and management information on reliability and integrity of the true knowledge, and to ensure the safety and integrity of assets, as well as to follow the laws and regulations. The inner control system is becoming increasingly important because of the separation of companies'ownership and management, as well as the development of economies and the complexity of companies'structure. More and more managers are taking inner control as an important issue, in order to solve any possible problems timely and effectively and to strengthen their ability to control the whole company.Being an important part of the inner control system, the internal audit is becoming more and more important. The internal audit is a kind of independent and objective activity in order to increase value of the corporation and to improve the operations. It helps the organizations to achieve their goals by evaluating and improving the management, control and operations with systematic and general methods. It plays a critical role during establishment of the modern enterprise and inner control systems and also as a key to help the companies to be more energetic and competitive. The Chinese internal audit was established by the force of the administration, which is different from those in western countries. Thus, there are a lot of problems in the Chinese internal audit system. In addition, people care too little about the theories and practices of internal audit, influencing its functions badly.Based on introduction and analysis of the concepts, responsibilities of both inner control and internal audit, as well as their relations, the present thesis detailedly described the functions of internal audit in inner control, i.e., to optimize the control environments, to improve the systems, to increase the quality of the information, to evaluate and forecast dangers and to inspect and re-control the inner control system. By combining of reality and history, internationality and nationality, practices and theories, and using series of investigation methods, the present thesis made a discussion of the problems in Chinese internal audit, such as the weakness of the basis, lack of independence, low quality of the people doing internal audit, the limited scope of audit and the out-time methods, etc. Because the internal audit is an important part of inner control system, these problems will also influence the completeness of the inner control system. Finally, some solutions were suggested to be undertaken to solve the problems. Internal audit should be designed on the basis of the modern enterprise's characters, setting every institution properly and reasonably. The quality of auditors and independence of audit and the methods, as well as the audit scope, should be increased. As a result, the functions of internal audit can come into being in enterprise effectively, as a help to improve the competitiveness and increase the economic benefits.