Internal Audit Outsourcing Research

As an important component of the self-restraint and supervision mechanism, internal audit has been an important factor of the development of the modern enterprise system. In China, twenty years development of internal audit has strengthened the corporate governance and has done some contribution to socio-economic development. However, at present, there are many problems still exist in China's internal audit, as many enterprises expose a set of problems such as unreasonable institutions of internal audit, lowly positioning of its functions, backward technology, low quality of internal audit staff as a whole. Therefore, how to improve the efficiency of internal audit to work correctly and take full advantage of internal audit is an urgent task currently.The traditional internal audit was generally done by the internal audit agencies which were specially set up by the enterprises. The economic globalization and the rapid development of information technology had an increasingly serious impact on the enterprises behavior. Some enterprises intended to re-create the organization and transform the process, has gradually outsourced the non-core business areas of expertise, for example, internal audit. As a new development trends, outsourcing is the result of rational choice of enterprises. It also demonstrated the competition between internal audit and external audit organizations. Correct comprehension of internal audit outsourcing should be helpful for internal audit to play the biggest role. The article is divided into four parts: The first part discussed the internal audit function and the contents of audit work as well as the status in the organization under a modern enterprise system; The second part of is the focus of the text, based on the re-positioning of internal audit, from a transaction costs angle to analyze the economical basis and feasibility of internal audit outsourcing, explored the root cause and the practical feasibility analysis of internal audit outsourcing; The third part analyze the feasibility of developing internal audit outsourcing in our country, and introduce the specific outsourcing services of international accounting firm PricewaterhouseCoopers which could be the lessons of China's outsourcing services; Part IV, underscored the importance of the internal audit outsourcing in the course of the operation that should take control measures, including the risk control of the internal audit outsourcing and follow-up management, then promoted the development recommendations of the internal audit.In this paper, discussing the internal audit outsourcing is not meant to weaken or replace the internal audit. Rather, seeks an approach for instance, through the combination of internal audit and external audit resources to play a best supervision role in corporate governance.