The Research On Decision-making System Of Internal Audit Outsourcing For Enterprises

The continual development and innovation of function of modernistic audit have been an obvious trend in the world. The functions of internal audit have been changed from financial audit to management-consultation and risk-management, which play a crucial role in perfecting governance structure and improving governance efficiency of enterprises. In the late-1980s, a new mode of internal audit - Internal Audit Outsourcing (IAO) -brought out through the integration of internal and outside resources of enterprises, and has been popular in developed countries gradually. Though there are many advantages of IAO such as improving the quality of audit and cutting costs, it will not be successful at all the time. Whether the decision is correct or not is the Key to success of IAO. Thus, enterprises must carry through a systemic and scientific decision-making analysis of IAO before outsourcing the internal audit.Based on the integration of related theories, this paper researches decision-making of IAO and construct a decision-making system of IAO from three aspects, including Demand Analysis, Cost and Benefit Analysis and Risk Analysis. The system divided all the factors influencing IAO into three aspects above, and then transformed them into quantifiable indicators. Though measuring all the indictors, there will be a suggestion to decide whether the company is fit to outsource internal audit. Finally, this paper, taking one of Farming Chemical Industry Co.,Ltd in Gansu Province for example, tested the operability of the system.All in all, this paper, combining the research methods of direct investigate and indirect statistics, qualitative analysis and quantitative analysis, theoretic research and demonstration analysis, looked forward to give some good advice for enterprises to make the decision of IAO and benefit from IAO.