Research On Application Of Modern Risk-oriented Internal Auditing In Commercial Banks

Modern risk-oriented internal auditing was a latest auditing theory which was developed for replying to high risk society and auditing profession crisis. There were various factors such as economic globalization, intensive competition and technology modernization that necessitated Chinese internal auditing organizations to consider the application of risk-oriented auditing in the field. It was also regarded as an element to promote internal auditing self-development and assist companies to survive in competitive market. As a high risk industry, commercial banks needed to explore advanced and effective internal auditing methods. They were also required to have the ability to implement modern risk-oriented internal auditing into banks'risk management services. More than that, the risk-oriented concept was latest trend in the field of international auditing theory. However, China was on the introducing stage of the theory and lacked in its practice research. Therefore, the study on modern risk-oriented internal auditing had both theoretical and practical value.Firstly, the article introduced modern risk-oriented internal auditing and specific auditing procedures. Furthermore, it analyzed current situation and issues in the application of risk-oriented internal auditing by Chinese commercial banks. Then, the case-study of Bank A was introduced with the attention to find a right way to realize modern risk-oriented internal auditing in Chinese commercial banks. It also attempted to assist the practice research of Chinese commercial banks'internal auditing in the field. Based on analysis, the article found out main results as following: (1)Residual risk was obtained by an analysis on strategic risk and key operational risk with the focus on risk evaluation which was the core concept of risk-oriented auditing. (2)Thorough examinations were given to the issues such as the way that commercial banks performed risk assessments and developed auditing plans by introducing Bank A's application of risk-oriented auditing. These results were expected to be reference for Chinese auditing practice.