Research On The Efficacious Of Internal Auditting In Chinese Group Company

Since 1990s, Chinese government has implemented the strategy of"holding big, unlocking small", intending to foster group companies into backbones of Chinese economic development. But Chinese group companies stuck in the mud on the path of development. Many group companies are big but weak, with many problems, such as the tendency toward governmentalism, weak economic strength, irregular internal management, lack of coherence, false accounting information, mishandling in investment, loan and vouching, and so on. Among all these problems, irregular internal management and lack of coherence are extremely prominent in the inner control of group companies. Therefore, internal control of group companies should be reinforced, and internal auditing has become more and more important.There is quiet a gap between the internal auditing of Chinese group companies and the mature internal auditing of west group companies or the request of consummating Chinese Internal Auditing. The main display of the gap is that auditing easily goes ineffective. This thesis will try to research the problem.First the thesis tries to draw out key influential factors of auditing from the evolution history of internal auditing in western countries, and the interaction between or among them. The thesis then analyses these key factors'characteristic and the request for auditing based on the actual condition of Chinese group companies. Finally, the thesis discusses how to reform the auditing by doing a case study.The conclusions of this thesis are as follows: 1) the key norm of the effectiveness of internal auditing is whether internal auditing satisfy growing accountability responsibility. 2) The external norm the effectiveness of internal auditing is whether the goal, object, functions, methods and techniques, procedures, and emphasis match or even change the internal control and corporate governance. 3) The condition in Chinese group companies is not as favorable as that in western countries, and this restricts the internal auditing performance. Yet auditors can still make the most of auditing and change the auditing environment. 4) The main reason for the ineffectiveness of internal auditing in Chinese group companies is auditing itself. The only way to success is to comprehensively using a set of oriented auditing methods by changing of the auditor's concept, aiming to increase corporations value, and satisfying clients'request. Thus bring three major changes in internal auditing, namely, from detecting auditing to preventing auditing, from according auditing to value-adding auditing, from monitoring auditing to a combination of monitoring auditing and appraising auditing, from afterward auditing to through-the-process auditing.