Cultural Conflicts Between Internal Audit And Soe: Characterization, Reasons And Solutions

The development of China's economy calls for the enterprises to stress control in order to increase effiency and reduce corruption. Therefore, state-owned enterprise (hereinafer referred to as SOE) introduced system of internal audit to enhance internal control. At present, internal audit in China's SOE has showed preliminary effect. However, many shortages still exist, hindering it from making full advantages. The reason is that there is conflict between the internal audit system and the system and culture of SOE. This paper clssifies the conflict by giving living example from company A's internal audit process, focusing on the characteristic of SOE's culture, including culture of administration, citizen and the Confucion school. On the basis of listing the expressive form of conflict, the paper analyse the cause of the conflict from various angles such as the momentum of the commence and development of the internal audit, and the system of China's SOE and its culture, comparing with the the status quo and characteristic of the internal audit system in developed countries. Focuing on cultural conflict, this paper gives detailed answers to the question from the development of internal audit per se and the system of modern enterprise and culture development. With the development of China's system of modern enterprise and enhancement of its culture, the efficiency of the internal audit of the SOE will be improved while the conflict will be substitute with integration. At present, little attention is paid to the"conflict on the internal audit and culture of SOE"and the question calls for detailed research. This paper reseaches and analyses the question from three aspect, bearing certain significance to the devlopment of the internal audit system in china's SOE, and also paves way for the future research in this regard.