The Study Of The Factors Impacting On The Quality Of Internal Audit Based On Corporate Governance

With the exposure of financial fraud scandals,corporate governance issues have got unprecedented attention.The agency relationships within the company among various stakeholders is the foundation of internal audit.The activities of internal audit supervise the fulfillment of economic responsibility.By doing this,the internal audit can help to increase the value of the company and improve the organizational operations.Thus,it is very necessary to study the quality of the internal audit.By looking for the factors that affect the quality of the internal audit,the internal audit can play a better role in the corporate governance.In this paper,I use the method of literature review,theoretical research and empirical analysis to study the factors impacting on the quality of the internal audit based on corporate governance.At the end of the paper,this paper comes up with some policies and recommendations to help improve the quality of internal audit according to the empirical results.This paper arranges the relevant literature on corporate governance and internal audit quality from home and abroad and expound related theory in detail.In the part of empirical research,this paper puts forward six hypotheses in terms of equity balance degree,proportion of independent directors,the establishment form of chairman and general manager,the size of the board,the size of the supervisory board,and the proportion of management shareholding.In the selecting process of dependent variables,this paper puts forward four indicators:the objectivity of the internal audit department,the function range of internal audit department,rules and regulations that related to the internal audit department and the size of the internal audit department.When assigned to 0-1,the characteristics of the four factors are summed to imply the internal audit quality.This paper comes to the following conclusions:the higher the degree of equity restriction,the better the quality of internal audit;the higher the proportion of independent directors on the board,the better the quality of internal audit;the establishment form of chairman and general manager has no obvious impact on the quality of internal audit;the size of the board has no obvious impact on the quality of internal audit;the size of the supervisory board has no obvious impact on the quality of internal audit;the higher the proportion of management shareholding,the better the quality of internal audit.After the completion of theoretical and empirical analysis,considering the results of empirical analysis,this paper comes up with four policies and recommendations to improve the quality of internal audit.