Analysis Of The Internal Audit Institution Of Listed Companies In China

Internal audit, a corporate self-regulation mechanism, has become an important part of the modern enterprise system, which develops an important institute of stricting financing discipline, improving management, rising economic efficiency. In order to correspondent to the modern enterprise mechanism that is operation operating dependent of property for check and balance, most listed companies have established internal audit institution. China’s listed companies establishing internal audit system late compared with western countries, they exist difference in learning overseas companies, which results to types of internal audit rising, benefit and demerit coexisting.China’s listed companies set up internal audit mode started late, at the same time the principle of internal audit listed companies set up in the company have not been fully implemented and enforced. The independence of the internal audit organization is severely weakened unreasonable corporate governance structure; internal audit institutions and the scope of work did not break off the table, general manager of the traditional audit control; internal audit staffing did not get the attention it deserves, the independence and professional quality audit personnel can not meet the requirements; Finally, China’s listed companies set up internal audit organization does not have a system of evaluation and improvement, and therefore can not guarantee the sustained and healthy operation of the internal audit organization.Based on the listed companies in China’s internal audit department to set the situation described, analyzes the internal audit agency set four common patterns. Through analysis of the status quo and set up internal audit mechanism different organizational patterns influence on corporate governance, through further analysis, and with the U.S. public company internal audit contrast setting mode, absorbing the advanced experience of internal audit mode setting, looking out of a species suitable for the status quo of China’s listed companies set up internal audit mode.Currently, internal audit has report to such entities as General Manager, Chief Financial Officer, the Audit Committee, the Board of Supervisors and the like. IIA (2002) also pointed out that the proper reporting relationship is critical to maintain independence, objectivity and position in the company, which are essential elements of internal audit bodies in effectively discharging their obligations. IIA internal audit practice standards termed, the ideal situation is that the internal audit organization should provide auditing working report to the audit committee, board of directors or other governing body reports related, even to the company’s CEO. Thus a "functional reporting " and " administrative report" dual reporting model is developed. At present, due to the imperfections of the corporate governance structure, our enterprise internal audit reporting relationships turned out diversified situation. Although some companies have established audit committee, and specify that internal audit department is responsible to the audit committee, but in general,"double reporting " model proposed by IIA is not widely adopted by Chinese enterprises has not been. in many companies, the internal audit department manager is still subject to financial officer. Taking into account the characteristics of corporate governance, would largely affect the independence of the internal audit. In addition, it is known that there do not efficient commination between the internal audit department and the Board of Directors, the Audit Committee or the Board of Supervisors of communication in China.Therefore, this paper proposes the following four aspects to improve our internal audit in listed companies form the following four aspect. First, establish internal audit reporting model of the double should be established. This requires listed companies to improve internal governance, ownership structure and optimization of clear property rights; secondly, to authorize a broad mandate of internal audit institutions and the strengthening of the independence of the internal audit organization. This requires that the company’s management should set free from the traditional internal audit of accounts audit, and turn into a strategic audit, management audit, management audit, management audit, performance audit, financial audit, project audit, contract audit, IT audit, economic responsibility audit, internal control evaluation, risk management audit, while internal audit authority should match to the internal audit field,which get rid of the intervening from the Boards and Management to keep its dependence; Third, we have to strengthen the internal audit staff of personnel capability. Good internal audit quality is inseparable from the support personnel. Internal auditors should possess the necessary qualities and independence and being competent, in addition, the internal audit staff should strengthen communication with other departments’ personnel. Finally, the company should be established to evaluate and improve the system of internal auditors. With the establishment of a mechanism for the development of the company’s business will always appear suited to the business needs of the problem. This requires the company relevant system to assess the system on a regular basis to assess the reasonableness of institutional settings and issue a report, thereby removing the factors within the organization harmful to the business development needs, thereby enabling the internal audit organization to better serve the company’s development, the company has created a greater value.