Research On The Problems And Countermeasures Of Tianshan Group’s Internal Audit

Internal audit, as an essential part of modern enterprise system, has become an important guarantee for enterprises to strengthen internal self-control, strictly observe financial and economic discipline, reinforce risk management and improve economic benefits. “Enron event” in 2001 and the World Com’s financial scandal exposure make internal audit a new focus in the fields of theory criticism and practice, whose functions have been affirmed highly by enterprises and supervision departments. Meanwhile, similar financial scandals also exist in our country such as Guang Xia company in Yinchuan and Yuehai Railway Company, which, from the opposite side, illustrates internal audit of the enterprises fails to give full and effective play to its functions. Under such background, this article selects Tianshan Group in Hebei province, one of domestic large-scale private enterprises, as the object of study, introduces the Group’s internal audit conditions, such as the establishment and setting of its internal audit organization as well as its staff quality, then makes a detailed analysis and deep research on the existing problems and relevant reasons in specific audit events, aiming at putting forward some countermeasures and suggestions which are expected to be beneficial to improve the group’s internal audit. This thesis is on the basis of relevant studies at home and abroad, adopting the methods of literature research, case study, chart analysis and so on.This thesis is divided into three parts.The first chapter introduces some theories related to internal audit, including the definition, the functions, the principles and the approaches of internal audit.The second chapter elaborates the internal audit situations and problems of the Tianshan Group. Firstly, it illustrates the current situations of the group’s internal audit, such as the organization and staffing, the function playing and the working procedures of the internal audit in Tianshan Group. Then, it analyzes the existing major problems in the group’s internal audit as follows, the organization structuring and staffing of the internal audit is unreasonable; internal audit functions are not played fully; there is a lack of follow-up audit in audit procedures; great importance is not attached to internal audit opinions. Finally, it analyzes the reasons why these problems exist in the group’s internal audit. There is a shortage of correct understanding of internal audit; the independence of internal audit is relatively weak; the supervisory role of internal audit is limited.The third chapter puts forward a series of countermeasures and suggestions to solve the problems mentioned above. They are as follows: to have a better understanding of internal audit; to govern internal audit from the level of the board of directors; to intensify internal audit’s independence; to add follow-up audit procedure; to improve audit staff quality; to make full use of internal audit’s opinions.