The Role And Governance Effect Of Internal Audit In Corporate Governance Under The Background Of Institutional Change

China's internal audit has been established for over 30 years and it has experienced three stages,respectively,the start-up stage,the stage of consolidation and improvement,the transition stage of development.At present,the employees of internal audit are increasingly growing and internal auditing standards and normative system are continually improved.Internal audit is set up in enterprises on a larger scale,which is gradually applied into non-profit organizations.Thus,internal audit system has been an indispensable internal mechanism of organization structure and organization operation.With the continuous evolution of the targets and requirements of national macroeconomic environment,organization and external environment as well as internal audit,the function of internal audit in enterprise organization management has evolved from the basic functions,such as financial supervision and evaluation,to the expanding function of management and control as well as the ultimate function of governance.As the cornerstone of corporate governance,some important roles of internal audit,including confirmation,consulting,value increment,etc.have been gradually prominent,which has been widely recognized and promoted by theoretical and practical circles.However,combined with the specific national conditions,the internal audit management level of China's enterprises is still universally weak.In order to cater to listing requirements,some companies set up their internal audit departments urgently and their work becomes a mere formality;since our country has non-mandatory requirement on the internal audit of non-listed companies,the vast majority of non-listed companies have backward internal audit function,which is far from exerting its internal function.Therefore,it is of great theoretical and practical significance for this paper to study internal audit in corporate governance.The conclusion of this paper is:(1)whether the internal audit is established due to government regulatory intervention or out of the enterprise's will is conducive to achieve corporate governance effect;moreover,the internal audit established out of the enterprise's will has stronger corporate governance effect.(2)the choice of the establishment of internal audit of the enterprise,when the number of employees to reach 934 people,enterprise assets reached 69 million,can consider the establishment of internal audit,improve governance effect.The research conclusion perfects the existing research literature of internal audit and corporate governance.In addition,the conclusion of the study to establish internal audit for non listed private enterprises and other enterprises to provide a voluntary choice of internal audit set up scale,has guiding significance.The main innovations of this paper lie in:(1)The paper makes a comparative analysis into the differences of two internal audit modes on corporate governance role and governance effect that are respectively established by government regulatory intervention under mandatory institutional change or out of the enterprise's will under induced institutional change;it breaks through the current study limitations that the research is just made on the listed companies.(2)This paper constructs the role model of internal audit functional level and internal audit participating in corporate governance.(3)For the first time,it is a practical innovation to quantify the size of the internal audit,and to provide some suggestions for the enterprise to choose the internal audit.