An Applied Research Of Risk-based Internal Auditing

Entering the 21 st century, economic globalization got in-depth. At the same time, the links between different economies become closer, and the enterprises face more and more complex and changeable risks and more frequent fluctuations in the market. In order to smooth operation and healthy development in the environment, risk management is becoming more and more important. In the stage of comprehensive risk management, to make the enterprise in an invincible position, the various departments of enterprises need to cooperate with each other, included the Internal Auditing. Many countries in the world and the Institute of Internal Auditors began to re-examine the internal audit and pay attention to the Risk-Based Internal Auditing.After many years of research, Institute of Internal Auditors(IIA) published the International Standards on Auditing and has achieved very good results. However, the study has just started in China and still in the primary and academic stage. Because of the lack of a complete theoretical system, the application of Risk-Based Internal Auditing is not fully carried out. In order to promote the use of Risk-Based Internal Auditing, this paper tries to analyse the application of Risk-Based Internal Auditing in LX company,induce the specific procedure of application and summarize the application effect.Firstly, this paper straightens up the relevant studies of Risk-Based Internal Auditing and gets the starting point of research. Secondly, this paper looks back the development history of Risk-Based Internal Auditing and theoretical principle. Thirdly, this paper gets the definition and characteristics of Risk-Based Internal Auditing and analyses the difference and relationship between the Risk-Based Internal Auditing and risk management. Fourthly, this paper studys on the necessity and conditions of use and application of Risk-Based Internal Auditing. Finally, this paper sums up the current application of Risk-Based Internal Auditing in our country, and puts forward suggestions based on the LX company as an example.On the basis of the clarification of Risk-Based Internal Auditing and risk management on the difference and relation, the innovation of this paper is taking full advantage of risk management approach in the case study. In the course of the audit, internal auditors work around risk to allocate audit resources reasonably. To evaluate the effectiveness of risk management, business activities and internal control, Risk-Based Internal Auditing can improve the audit efficiency and add value. Finally, through the analysis of the applicationof Risk-Based Internal Auditing in LX company, this paper finds the problems and suggestions of the application of Risk-Based Internal Auditing, to make contribution to the application of Risk-Based Internal Auditingprovide for similar companies in the same industry.