Spontaneous Establishment Of Internal Audit Department Of The Private Enterprise Can Play A Treatment Effect?

Financial scandals, for example, Enron and WorldCom exposure the cusp of the internal audit, which would be undoubtedly pushed to reform. The old tradition of internal audit, role as a policemen to find "disadvantages" and correct,leads up to leads up to the new level of theory. Based on the development of the internal audit, which is different from the Western countries, the situation faces much more external regulatory pressures. Since 2003, the National Audit Office published a new "regulations on internal audit work," and then Internal Auditors issued the "basic norms of internal audit", "internal auditors professional ethics", as well as 24 internal audit specific guidelines and five practical guide,these rules put forward request for the creation of the internal audit system. "Interim Measures central internal audit management," in which the central enterprises set up internal audit issues also took provisions in principle. While the Shenzhen Stock Exchange, not only small board, but also GEM and the Main Board have clearly pointed out, companies should establish an internal audit system. Therefore, we can see that the establishment of the internal audit department, a large incentive component is subject to the provisions of external laws and regulations to deal with external regulation. But considering others in the Shanghai Stock Exchange for companies, the rule of internal audit department seems blank, then we can consider excludes central and state-owned enterprises that already receive external supervision, private enterprises establish an internal audit department, must have a more simple motivation which is in order to improve the corporate governance structure. According to statistics in 2012--2014 in China the Shanghai Stock Exchange listed 644 private enterprises, of which 444 spontaneously established an internal audit department, accounting ratio of 2/3, it can be seen that private enterprises to set up the spontaneity and enthusiasm of the internal audit department is higher. Therefore, we can imagine to explore under the supervision exclude external factors, can our internal audit department spontaneous establishment of private enterprises play their governance effects?Firstly, the theory of spontaneous establishment of internal audit department of the private corporate governance effect play-based on the theory of accountability, internal control theory and corporate governance theory to analyze the internal audit on corporate governance role, while the development and changes of the internal audit system based on the analysis above, firmly grasp the two functions of the internal audit function-assurance and consulting functions are controlled from two dimensions and internal earnings quality, to explore the establishment of private enterprises to play a spontaneous internal audit department of treatment effect. In 2012--2014 in the Shanghai Stock Exchange listed private enterprises as samples removed financial data significant variation, as well as incomplete data of the company, to build a model, using statal4.0 data analysis software, multi-step empirical analysis, we found spontaneous establishment of internal audit of private enterprises, both in the quality of earnings and quality of internal control performance better. And based on this, to further explore the establishment of China’s private enterprises spontaneous internal audit departments, whether through treatment effect of play to create more business value, so we have to Tobin’s q as a measure of corporate value variable control business performance enterprise development capabilities, the company of other governance features, be generalized least squares regression and found spontaneous private enterprises set up an internal audit department to play through its governance effectiveness, increase enterprise value.