A Study On The Influencing Factors Of Enterprise Internal Audit Quality

With the rapid development of social economy in21st century, enterprise scale has expanded gradually. The importance of internal auditing has received increasing attention from both corporate top management and the general public. As an independent supervisory approach, internal auditing concentrates on evaluating corporate business, financial revenues and economic activities to learn relevant effectiveness, authenticity and legality. The board of directors and senior management expect that they can strengthen corporate control, assess and improve organizational management, optimize organizational structure, increase corporate value and achieve organizational objectives through internal auditing. Internal auditing activities play a significant role in the survival and development of a company. And the quality of internal auditing is the main standard to evaluate the effectiveness of internal auditing activities which also has influence on the status of internal auditing department in a firm. Looking back, there are a series of negative cases about enterprise internal auditing. For instance, WorldCom, Xerox, Merck&Company, Societe Generate Bank, Quester, Enron Event and so forth. These cases have aroused much attention about the monitoring function of internal auditing which have also aroused appeal for improving the quality of internal auditing. As a consequence, it is necessary to study and analyze the quality of internal auditing and relevant influential factors.On the basis of relevant theories and researches, several influential factors from both internal environment and external environment are found. Internal factors include organizational culture, the ability of internal auditors, the establishment of internal auditing department, adopted technology and approaches and auditing process. External factors are mainly concerning legal environment, economic environment, social environment and industrial environment. The current situation of internal auditing in China’s listed companies can be acquired. And the impact that these factors have on the quality of corporate auditing are further proved through the case study. It can be found that the most important internal factor is the ability of internal auditors. Moreover, legal environment and industrial environment have the most direct effect on the quality of corporate internal auditing. Based on the aforementioned analysis, several recommendations and measures are put forward.