Exploration On Valued-added Internal Audit In China

In1999, IIA(Institute of Internal Auditors) provided a new definition for internalaudit, internal audit is a kind of acknowledging and consulting activity that aims at addvalue of organization and improve running of organization. Internal audit helpsachieving organizational goals through systematic and standardized method to evaluateand improve risk management, internal control and governance. The new definitioninvolves the meaning of value-adding first time, and it is value-oriented. The newdefinition of value-adding internal audit makes it a value creating work, and that meansinternal audit meet a new chance to develop. In the new phase, the value-adding internalaudit keep in accordance with corporate governance, which focus on creating value.The amendment of definition represents the transformation from traditionalinternal audit to value-adding internal audit, but the new definition needs more study toprove it. For example, related concepts of value-adding internal audit, fundamentaltheory, how to make it into practice, how it develops in China and how to develop. Thispaper focus on provide a systematic explanation for these problems.With the development of internal audit and transformation of related concepts, thedevelopment of value-added internal audit is already on the trend, there are more andmore company start to put value-added internal audit into practice. At this time, it’s stillthe primary stage, so much problems needs to be solved. This paper start with corporategovernance and keep in the line with value-added internal audit, provide explanationsabout development of internal audit in China. For the while, this paper compares thedevelopment experience between USA, Japan and Germany. China’s market structure,economy system differs with other countries, this paper provide a series of developmentstrategy which combines character of companies, and it focus on implement of relatedresearch and practice of value-added internal audit.Overall, this paper includes the following parts.Part one is the introduction, which indicates the research background andsignificance and review related literatures. Value-added internal audit is the new phaseof development, there are more and more companied pub value-added internal audit intopractice, and many researchers study on it.The second part provides the overview of the theory of value-added internal audit,this part introduces the definition and characters of value-added internal audit, dominantvalue and recessive value provided by value-added internal audit and interactive relationship with the corporate governance.The third part summarizes the problems and causes of value-added internal audit,this part gives analysis of development phase of value-added internal audit. In this partprovides analysis of the basis of the implementation of the value-added internal audit,quality assurance, and how to solve existing problems.The fourth part summarizes the foreign value-added internal audit experience andenlightenment, this part discussed the development and implementation of value-addedinternal audit in the United States, Japan, Germany and get the enlightenment to Chinaincludes establishing the scientific concept of value-added internal audit and puttingimportance on the independence of the internal audit.The last part provides the development strategy of value-added internal audit in theframework of corporate governance. To establish a perfect internal audit system, thispart proposes a series of development strategy and route to creating value which startwith basic level and control level.