Research On The Influence Of The Internal Audit On Corporation Value

Along with the development of China’s economy, the enterprise gradually moves towards the internationalization, and the impact of international economic changes more and more intense, so the enterprises have to pay more attention to internal audit, to look forward to improving the enterprise capabilities of the corporate governance, guarding against the impact of external risks, so as to increase the value of enterprises. In order to strengthen the corporate governance, enhance the level of internal control and improve the risk management system and meet the business interests of stakeholders, the Shanghai stock exchange and Shenzhen stock exchange were issued’guidelines for internal control of listing corporation’, which requires listing corporation to set up internal audit committee, and makes the internal auditors independent of the company’s other departments, in order to enhance the value of the company effectively. In view of the above background, this paper argues that to study the effect of internal audit in the enterprise value makes some sense.Firstly, in this paper, domestic and foreign literatures on internal audit of enterprise value are reviewed. On this basis, determined using methods of theoretical and empirical studies, and to determine the will follow the technical route is analyzed in this paper, as internal auditing theory analysis and enterprise valueâ†'the influence factors of internal audit in enterprise value choiceâ†'the effect of internal audit to the enterprise value.Secondly, on the one hand, this paper reviews the definition, the function of internal audit, related system development and the present situation. On the other hand, this paper introduces the connotation of enterprise value, measurement methods and influencing factors. And then from three aspects expounded the Mechanism of effect of internal audit on corporate value, such as:Internal audit increases enterprise value by improving corporate governance, internal audit increases corporate value through the improvement of the internal control, internal audit increases enterprise value by improving the risk management.Thirdly, this paper choose the subordinate mode of internal auditing as the short-term variable, and make a regression analysis of dominant effect audit fees and long-term Tobin Q on firm value. The result shows that the subordinate mode of internal auditing has a significant positive correlation to Tobin Q value. Though the subordinate mode of internal auditing has a negative correlation to audit fees, but the result is not obvious.Lastly, this paper gave some suggestions based on the results of the study, the study put forward some suggestions, in order to improve the value-added role of internal audit to the enterprise value. Including let the internal audit subordinate to board, improve the independence of the internal audit department, strength the use of risk-oriented audit.