Research On The Application Of Internal Auditing In Corporate Governance Of State - Owned Enterprises

The state-owned enterprise is to stick to the basic economic system of strongbase, the development of the national economy and strong body, maintain socialstability and strong strength, guarantee and improve the people’s livelihood,enhancing the competitiveness of the country’s strong rely on the strong supportof.The internal audit of state owned enterprise plays a positive role in the enterprise’sself-supervision, constraint, function mechanism of control and coordination, seriousfinancial discipline, strengthen corporate governance, and the protection ofstate-owned assets. Also it promotes the enterprise’s management and other aspects aswell. However, because of the late start of internal audit in China and the short ofdeveloping time, as well as the special state-owned enterprise management mode andnatural system, internal audit did not play its due role in most of the state-ownedenterprises, even becomes the ornaments in some cases. Therefore how thestate-owned enterprise should be developed to strengthen the internal audit to make itwork more effective in the risk prevention, corporate governance improvement andvalue increase has became the inevitable trend of the future development of internalauditing, and the direction of further research.CT company is a solely state-owned enterprise established with the permit of KCity Hall in1997. As the main infrastructure construction, the main body ofinvestment and financing development, and the construction of the main operation inurban areas of K city, CT company has established a modern enterprise system thatdeveloped well with the vigorously support of City Hall in nearly20years. However,CT company’s internal audit business is slowed down due to the inadequateleadership attention and the inadequate internal institutional settings. At present theenterprise internal audit is suffering from the narrow range of services, functionssingle, which makes it fail to play a positive role in promoting corporate governance.In this paper, CT company will be analyzed as a case through researching the recentstatus of the enterprise’s internal audit work to identify and study the problems; sixproposals will be raised to improve and perfect the work of internal audit services of the enterprise, so that to give full play to the internal audit in corporate governancedefensive and constructive role.This paper starts from the relationship between the generation of state-ownedenterprise’s internal audit and corporate governance to study how the corporategovernance of state-owned status effect the internal audit, and the role of the internalaudit in corporate governance. The K city’s state-owned enterprises CT Corporationas an example will be studied through the analysis to raise recommendations forimprovement and feasibility, in order to strengthen the role of internal audit in the CTbusiness management status, to further improve the internal control system to helpenterprises improve management, reduce business risk, improve economic efficiency,promote sustained and healthy development. This study has some practicalsignificance, the research results can be applied directly to not only the CT company’sinternal audit work, but also to other internal audit suffering the awkward and slowdevelopment for reference and inspiration.