Research On Added Value Of Internal Audit Based On The Perspectives Of Corporate Governance

In 1999, Institute of Internal Auditors redefined the definition of internal audit. They thought the internal audit can add value to the organization by improving internal control, risk management and corporate governance. The redefinition pushes the study of internal audit to a new height. From now on, the study of internal audit’s adding value function around the corporate governance, internal control and risk management becomes a hot topic in internal audit. Many domestic and international scholars used a variety of analysis methods and have achieved abundant research results. Due to the difficulty of getting internal audit data, most researchers use standard study method and there are less empirical articles about the internal audit value-added mechanism. Therefore, using the empirical analysis method can enrich the content of internal audit research and make us better understand the internal audit.This paper combined with previous studies, and the fiduciary responsibilities theory, transaction cost theory, value chain theory and corporate governance theory, build an internal audit quality evaluation system and the corporate governance evaluation system. By conducting a questionnaire survey among 51 listed companies in Hunan province. We got 74 relevant internal audit data, measured up internal audit quality index by using factor analysis method and used it as independent variables studied in this paper. Then, attained corporate governance data from listed company’s annual report and CSMAR and adopt AHP method to calculate corporate governance index. Meanwhile, regard corporate value as dependent variable. On this basis, add appropriate control variables and construct 3 study models to study the interaction mechanism among internal audit quality, governance and enterprise value.The study found that:(1)there is a positive correlation between internal audit quality and enterprise value, it indicates that internal audit has value adding function, namely high quality internal audit can promote adding the value of enterprises;(2)the internal audit quality is significantly and positively correlate with corporate governance, it indicates that internal audit can not only satisfy enterprise internal management but also positively improve the effect of corporate governance;(3)corporate governance played an intermediate role between internal audit and enterprise value. Internal audit can better realize its value-added function by affecting corporate governance.However, from the point of empirical results, although it is true that internal audit can improve corporate governance, thereby increasing the value of the company, the significant and positive correlation between internal audit and corporate governance only is only on 10% level. And the index of internal audit also reduced slightly when they used corporate governance as intermediate variable. All of these results indicate that there is a huge gap between our country’s internal audit function and theoretical modern value-added internal audit. What’s more, the overall level of internal audit quality should be further improved. Based on this, this paper put forward countermeasures and suggestion from four aspects: perfecting internal audit laws and regulations, Optimizing the environment of internal audit, Strengthening the audit team construction, improving auditor’s quality and strengthening the internal audit function, so as to guarantee the efficiency of the internal audit function.