Realization of the internal audit of the external

Abstract: In recent years, outside of internal audit has become a trend, more and more companies internal audit by the consulting organizations. Analysis of the external internal audit of the feasibility study of the implementation of internal audit external mode and select the form, aims to improve the internal audit system of business advice.

Keywords: externalizing the internal audit, feasibility, Realization

Outside of internal audit, also known as internal audit outsourcing, is an enterprise to some or all of the internal audit function to the enterprise by contracting outside agencies or other external professionals to implement and fulfill the internal audit function. 90s of last century, the internal audit external based in Western countries has become a common phenomenon, part of the solution weakens the internal audit function is one important means. In recent years, China has a growing number of enterprises and institutions concerned and has taken this approach in practice has proved that this is to address the constraints to some extent the development of Internal Audit bottlenecks, improve audit quality, and better play the role of internal audit functions of the department has played a positive role in promoting.

First, the internal audit of enterprises outside the feasibility
In our country outside of the internal audit has a real possibility, because the role of internal audit and their own ability to defects and other reasons, led to internal audit institutions and personnel is difficult to fully implement the internal audit function, it is difficult to meet the managers financial audit and management audit of a variety of needs.

(A theoretical basis
According to agency theory, the accounting is the fulfillment of fiduciary duty to confirm the process and results of measurement, recording and reporting, the audit is to provide a range of fiduciary duties of the accounting basis of the report, the performance of the fiduciary duty to re-evaluate the process and results. Company all clients outside the established criteria are often used to evaluate the company's top management fiduciary responsibilities, check whether they trusted the company top management will be based on the "principal criteria" to evaluate their fiduciary duties under the various departments the performance results. internal audit in an enterprise as a "participant" and "judge" the dual role, can not fundamentally solve the principal-agent relationships formed under adverse selection and moral hazard. Only the exterior of the internal audit in order to fundamentally solve the problem of internal audit independence. Therefore, in theory, outside of internal audit is possible and necessary. because all clients outside the enterprise has established standards are often used to evaluate the company's top management the case of the fiduciary responsibility to check whether reliable. Therefore, the top management of enterprises will be based on these "principal criteria" to evaluate its fiduciary duty under the various departments to fulfill the results, so that the outside is a trustee of the top management, internal is the principal. this "who is also two-term," the reality is that the internal external fiduciary duty fiduciary duty to the company's extension. The internal and external consistency of fiduciary duty, outside of the internal audit possible.

(B practical needs
With the accounting services market opening, foreign accounting firms continue to expand the business scope, external audit of the competition will become increasingly fierce, grim reality will force a large number of accounting firms to develop new business, management consulting, tax services and internal audit services, etc. will have broad prospects for development. In China, the implementation of internal audit outsourcing can increase the market share of certified public accountants to reduce high-risk business in the traditional accounting firm Certified Public Accountant in the proportion of income, to promote the cause of Certified Public Accountants development, there will be certain role. In addition, from the perspective of their own development, the development of globalization in our country enterprises worldwide competition among the competitive pressures forced enterprises by improving the internal audit work required to improve their operational efficiency. Since the external within the company is not certified public accountants and the inherent conflict of interest and contact, so they can manage to provide more independence and objectivity of the evaluation results will help raise the level of business management at the same time, internal audit Outsourcing is conducive to reduce audit costs, and enable enterprises to make more time and management resources for production and operation management, corporate management can concentrate on the pursuit of more strategic objectives, from the whole, conducive to enterprise upgrade competitive advantage. Therefore, from a practical point of view, internal audit outsourcing companies and accounting firms can be a win-win strategic choice.

Second, the internal audit of ways to realize the external
From the experience of Western countries, outside of internal audit are basically two forms: First, all the outsourcing of the internal audit function, the second part of the internal audit function is outsourced. Large number of small and medium enterprises, economic diversification of forms and scales, and over range of uneven development, resulting in corporate governance among SMEs, accounting, financial management, internal control and internal audit bodies of the settings have a greater difference. Therefore, SMEs should be based on the actual situation of the unit, in which the industry, stage of development, operating characteristics, corporate culture, management and internal audit's ability to achieve business value and improve core competitiveness of enterprises for the purpose of balance, choose the most suitable for their own internal audit outside of the form. To sum up, the enterprise should be based on their specific circumstances, can be achieved by externalizing the internal audit.

(One of the most simple form of internal audit outsourcing supplementary
About a specific part of the internal audit function to give a professional competence of the competent third party. For example, in a number of key internal audit projects to employ outside professionals such as engineering, computer, legal, financial and other experts to participate in order to obtain the professional skills required. If the field office in the audit, the firm hired to understand the local language or are familiar with local customs auditors to help. in the audit of special areas such as electronic data processing systems, businesses can hire experts proficient in computer operations. In this form, the internal audit function is still mainly by the auditors within the organization commitment to the role of external assistance from the staff only.

(B Audit Management Consulting
Audit Management Consulting is a consulting or accounting firms audit the existing extension of this form, the major accounting firms to help companies determine the set of internal audit bodies, the number of personnel and equipment, and can help companies develop an internal audit plan. Audit management consulting services also include the recruitment of internal auditors to help management to define key areas of audit risk, etc. for the organization's internal audit agency to carry out internal audit work smoothly pave the way for the successful. reposted elsewhere in the Research Papers Download http:/ / www.hi138.com (three partial outsourcing of internal audit services to external agencies
That all enterprises will be part of the internal audit or audit in certain process outsourcing to accounting firms and other external agencies. Part of the outsourcing, the internal audit staff and outsourced personnel to conduct the audit division of labor. Internal audit staff's main task is daily monitoring of economic activities, undertake internal audit work is not important, while internal audit staff can use their information advantage to companies that do not involve an important trade secret information to the outsourcing of audit staff to make it to the enterprises a more comprehensive understanding of its evaluation and recommendations to improve the relevance and reasonable. outsourced auditor's main task is important, technical difficulty or highly specialized, and there are internal audit staff could not do the internal audit services, such as audit of accounting information, environmental audit, project audit, compliance testing.

(All four internal audit function outsourced accounting firm
Internal Audit will submit accounting firm hand in dealing with all. In this form of outsourcing, the organization generally does not set the internal audit department, but can retain the internal audit of the Auditor General to oversee the implementation of the operations, evaluation of performance of the contract and outsourcing effects and play in the accounting firm and the management of communication between the media. This form of internal audit outsourcing most opponents accused, the main drawback is the loss of the internal audit of a dominant position, prone to "hold-up" effect, and the internal The audit also lost the continuity, therefore, the method is suitable for in its infancy and has not established an internal audit of SMEs. can not only save limited resources and concentrate their efforts on core business, for the steady development of enterprises, quickly lay the foundation for value-added , but also by means of the implementation of the CPA's internal audit found problems promptly corrected to reduce losses, and through the rationalization of CPA recommended to refining the strategic vision, optimization of organizational action to improve the organizational capacity for sustainable development, access to the internal the audit added value.

(E Collaborative Outsourcing
IIA former chairman David Li Chade proposed Collaborative outsourcing outsourcing, from a third party and internal auditors to work together to improve the effectiveness of internal audit. In this the meaning of outsourcing and similar to outsourcing or co-added, but it is more emphasized in this way the purpose of internal audit outsourcing internal audit department is to enhance the core competitiveness, which requires companies to be the chief audit officer leading position in the internal audit, internal audit function is mainly commitment by the internal auditors, internal auditors audit the implementation of most of the projects focus on key issues facing businesses, for some non-core, non-conventional audit services, such as environmental auditing, contract auditing can use external auditors, thereby increasing the efficiency of the implementation of internal audit. In Collaborative outsourcing mode, both to ensure the dominant position of the internal audit department, and the use of external auditors of the intellectual resources to provide services for enterprises, small and medium enterprises continue to value-added benefit.

The distinctive form of various internal audit outsourcing. Firm size and industry to industry, whether to implement the internal audit outsourcing and implementation of the approach may vary. Internal audit outsourcing is a matter of management units based on specific circumstances and needs of the decision, is the internal audit department and external audit organizations to achieve competitive, internal audit and external audit resources, optimal allocation of resources to achieve the best efficiency of the process. in the internal audit and external audit organizations how to choose, is a complex process, because the value of the internal audit business itself is uncertain, because business-specific. enterprises through the use of innovative methods to achieve the internal audit outsourcing to maximize the internal audit function and enable companies to dramatically change with the external environment adaptation. as the fierce competition to survive, breaking the bottleneck of the development, improve core competitiveness, steadily and continuously add value and create favorable conditions for the enterprise.


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