Research On The Corporate Governance And Internal Audit

Both corporate governance and internal audit came into being based on the accountability. Corporate governance appeared in American 200 years ago and internal audit appeared in Rome in 3000s BC. It is not until the enacting of Sarbanes-Oxley Act which is due to a series of accounting scandals that unfold a great upsurge in the study of corporate governance and internal audit all over the world. Today, most corporations, especial listing corporations, set up auditing committee and internal audit organization to strengthen corporate governance, avoid risk of governance and increase the level of governance. In China, internal audit has been both successful to some degree and difficult since the set up of Auditing Administration. The internal audit can not provide corporate governance with good service in practice and there are many limitations compared with international internal audit in many aspects, such as the independence, the technologies and methods, the qualities of auditors. The interactive research of internal audit and corporate governance is a complete new subject in theory and practice, especial for large and medium-sized enterprises in their developing.This paper discusses the basic theory of corporate governance and internal audit and analyzes systemically their interaction in the developing of modern corporation based the same purpose and theory. It is pointed out that a sound internal audit can both perfect the corporate governance and support the key program in governance. To the problems of corporate governance and internal audit that modern enterprises in our country will meet during its transform, this paper presents the opinions and suggestions by method of historical analyses, quantitative analysis, essential analysis and investigation. At the same time, it discusses in detail the successful actions which large state-owned enterprises have taken in their development in order to increase the degree of corporation governance and its competition. The actions include perfecting the construction of directorate and auditing committee and at the same time, perfecting the internal audit. At last, this paper looks forward to the future and pays close attention to the interaction and coupling between of corporate governance and internal audit.