Internal Audit Law Studies Of Listed Companies In China

With the rapid development of international economy, the economic rate of our country also increases. In the age including opportunities and challenges, the same as the listed companies. With the status of our country in the world economy continue to strengthen, the healthy operation of listed companies has played an important role on Chinese economic development. Meanwhile it also put significant assignment of strategic deployment of the Communist Party and the State Council into practice,which promote the development of the capital market. For now, there are still a lot of financial fraud happening in China. After the Enron Incident, the United States launched Sarbanes-Oxley Act to enact a series of mandatory law which let people pay attention from external audit to the internal audit. Due to the listed companies involves lots of shareholders, it is very urgent to protect their rights and interests. In our country’s unique national conditions and the existing governance structure, seeking effective internal audit system should not only start from the governance structure of listed companies and the connection with internal audit, but also perfect the related system, only multiple independence and coordination could achieve effective effect of the internal audit.Internal audit results from the relations of the entrusted responsibility, which promote the resource owner to efficient manage resources and ensure the implementation of the mechanism and application, while internal audit is the means and guarantee mechanism to make the relationship smoothly realize,on account of that corporate governance connecting with internal audit is the product of the separation of power and responsibility. It has been proved that the success of the internal audit can largely support the success of corporate governance, on the contrary, the failure of corporate governance inevitably lead to the failure of the internal audit. Improving the quality of the listed company is the only way for listed companies to steady implement and rapid develop. How about the legal provision of Internal audit in our country? As the cases of financial fraud in recent years, associated with the national anti-corruption in the current Macro-environment, the problem of internal audit also gradually be taken seriously. For now, there is no specialized legal provision for internal audit in our country, and so is in Corporation Law which company operate according to, the independence of internal audit department in corporate governance is not that strong in practice, internal audit cannot fully guarantee the equity and justice of the relevant interests. Attaching great importance to the internal auditing is the trend of modern corporate governance. This article start with the internal audit and the relevant legal system to reveal the legal problems of the internal audit of listed company, and puts forward some suggestions for legal construction of the internal audit.This article is divided into four parts:The first part discusses the definition of internal audit; clarify the legal status and legal responsibility of internal audit in our country; find out the relationship between internal audit, corporate governance and internal control, and the corresponding function of internal audit in the listed company under different conditions of different system or subject to provide a foundation for the following research.The second part elucidate legal system defects of internal audit in our country mainly from the two parts. Firstly list existing laws and regulations of internal audit in our country, secondly, definite related legal loopholes to our country’s existing laws and regulations, to prepare for putting forward suggestion and solution finally.The third part mainly discussed about the legal application of the listed company’s internal audit in other country, analysis specifically with the United States Sarbanes-Oxley Act, American corporate governance model, Japan internal audit law and its "free choice" corporate governance model, as well as Germany "double-track" governance model; through discussing the legal application of the listed company’s internal audit in other country, provide the theoretical views of the internal audit activity.The fourth part, as one of three parts of audit, the internal audit has no specific legislation to support, resulting in a unbalanced state. Therefore, the last part puts forward suggestions for the internal auditing system in China. On the one hand this part is to establish professional law and regulations to regulate internal audit activity. On the other hand,in the absence of the law and regulations, is to improve the system of internal audit of listed companies to strengthen the independence of the internal audit and realize the function of internal audit in the listed companies.Through the study of internal audit and related system, this article find out the appropriate advice to strengthen the independence of the internal audit system in listed companies and at the same time to perfect relevant legislation. Due to internal audit exists in the whole company operation, it has intimate relationship with corporate governance and internal. In the absence of specific legislation, strengthening the corporate governance, the related legislation and execution of internal control will also improve function of the internal audit displaying in the listed company. So the author seek to enhance the effectiveness of the internal audit in listed companies from researching the internal audit itself, audit committee system, independent director system, financial information disclosure legal system.