The Study On The Effects Of Internal Audit Mode Selection In Chinese Listed Companies

The development and innovation of a listed company cannot be separated from theinternal audit. Internal audit is not only one of the most important elements of internalcontrol, but also an essential measurement of supervising and evaluating internal controlsystem. Internal audit mode impacts on the functional effect of internal audit dramatically.It plays an indispensable role in improving corporate risk management, and enhancingcorporate economic benefit.This thesis is mainly divided into four parts to study the effect of internal audit modeselection in listed companies. The first part has a detailed introduction of internal audit andits related theories, and then gives a descriptive statistics on the status of our internal auditdepartments’ setup and the distribution of variance organization model within the listedcompanies; based on the above analysis, the second part mainly studies the effects ofinternal audit mode selection from the point of view of the accounting information qualitywith empirical method using paired samples T-test; the third part using multiple regressionanalysis as the main method to explore the relationship between internal audit model andearnings management by empirical method, aiming to study which kind of internal auditmodel is the most conducive for the listed company to achieve enterprise value-added; Atlast, to draw final conclusions of this paper through the former three parts of the study.The surveys from this thesis indicated that a part of Shenzhen main board listedcompanies have set up single internal audition department since Year2006, in addition, theinternal audition tends to be standardized, among which the general manager leadership ismainly adopted. By Year2010, almost all listed companies in Shenzhen main board had setup single internal audition departments, and disclosure to which the internal audit modebelongs in detail. Namely, the major internal audition mode is the board leadership modeland the audit committee leadership model. According to the study on the changement ofChinese listed companies’ internal audit model, the internal audit mode selection couldaffect the company governance to a certain extent. The accounting information quality is higher in a listed company with an independent and high authority internal audition mode;and between the two modes with comparative independences-board leadership mode andaudit committee leadership mode, the audit committee leadership mode is able to restrainearnings management more efficiently.