Research On Performance Evaluation Of Value-added Internal Audit

With the rapid development of enterprise management concept and constant change for more emphasis on risk management, the value-adding has become a code of firms’ conduct in their economic activities, and the primary target of running a company has turned into enlarging interests and creating value for owners and stakeholders. As an important function in the business development,the internal audit is not only a necessary component of internal control, but also a supervision and evaluation to the corporate governance and internal control. To achieve better adaptation for the changes from interior and exterior environment,the level of business management is continuously improving. With the continuous improvement of enterprise management level, the scope of internal audit is no longer confined to the examination of the financial statements, and have extend to how to maximize the business value-adding, by which means the internal audit completed a major change from the traditional to the value-added. With the increasingly important status of the internal audit, the companies need to establish a scientific and objective performance evaluation system which is value-added-oriented and closely linked with their overall goal, to judge the performance of the internal audit created. The research on performance evaluation of internal audit started rather late in our country, so there are drawbacks both in theory and practice, which is not conducive for the internal audit department to perform a better value-added effect on enterprises. Therefore, studying the evaluation of internal audit’s performance issues and value-added mechanism has certain theoretical guidance and practical significance to establish a more scientific and complete system of performance evaluation.This essay compiled theoretical and empirical studies on value-added internalaudit and analyzed the relevant literature of domestic and foreign scholars to seek the breakthrough and summary of concept of performance evaluation. The foundation of this essay is mainly laid on the revolution timeline and definition of internal audit, the formation of value-added internal audit, value-added mechanism and the concepts of performance appraisals. Analysis of the current situation of internal audit performance evaluation of China would lead to specific suggestions to improve the items mentioned above. A comparative analysis of four performance evaluation methods will be discussed at the following part to lead to the conclusion of BSC and Performance Prism being the ideal evaluation method.Simultaneously, index weight will be determined by analytic hierarchy process(AHP) and internal audit performance by fuzzy assessment. At the end of the essay,a bus company will be raised as a model to deploy internal audit, thus through empirical research on verifying the feasibility of the evaluation system, the application of the performance evaluation model will be illustrated.