On the Development of Internal Audit and Countermeasures

Papers Keywords:: Reflections on the Internal Audit
Abstract: With the continuous improvement of socialist market economic system and development functions of government departments change, restructuring state-owned enterprises, the establishment of modern enterprise system, after 20 years of exploration and practice of internal audit will face more new situations and new requirements and new topics. In this paper, the implementation of internal audit of the social situation and practical issues faced by the analysis and how to do internal audit work to put forward some suggestions.

Internal audit is dedicated by the departments and enterprises of the audit institutions and auditors in the department, under the leadership of the person in charge, according to relevant state regulations, and the departments and units of the rules and regulations, in accordance with certain procedures and method, relatively independent of the departments and units of financial revenue and expenditure of the real, legitimate, effective supervision and auditing behavior, it is important to our audit and supervision system components.

I. Current Status of Internal Audit
(A) of the historical background of the internal audit
August 1985, the State Council issued a <"On the Internal Audit Interim Provisions>> require large and medium enterprises, government departments and the implementation of internal audit and supervision system, according to the audit business needs, respectively, with the establishment of audit institutions or auditors .1985 In December, the Audit Commission "Promulgated" On several provisions of the internal audit work>> after the state administrative organs at all levels, most large and medium sized enterprises to establish an internal auditing system. In recent years, internal audit agency under the <<Audit > "and" <Audit on internal audit requirements> "(hereinafter referred to as requirements), to change ideas, improvement, has made considerable progress. because of the internal audit work more focused, the role has become increasingly evident, in addition to finance charges branch audits, performance audits, internal control system audits, infrastructure audits, economic responsibility auditing, and gradually become the main work of internal audit.

According to statistics, more than 80,000 existing internal audit agency, employing more than 20 million people each year internal audit projects completed around 500,000 each year investigation and discipline breaches, losses and waste, improve the efficiency of the value created nearly 1,000 billion yuan. In to safeguard national financial discipline, improve the management level, curb corruption, and played an important role.

(B) of the problems facing the implementation of internal audit
At present, China's internal audit work, whether administrative units, or state-owned enterprises or private enterprises, are faced with some common difficulties, there are some similar problems. Mainly in:
1, the internal audit and supervision imperfect legal system, legal level is low. Because of the internal audit scattered built in all levels of government departments and enterprises, there is no single department, and therefore can not be satisfied that the person the highest level of the legislative process. In the industry under conditions of imperfect self-discipline, internal audit services, management functions can only act by the Audit Commission. Therefore, it can only be the legal status of internal audit by the Audit Commission took proposed regulations submitted by the State Council, after consideration, the formation of the State-level administrative regulations . with the government audit <<Audit>> and social audit <<Certified Public Accountants Law "> compared to the internal audit department is significantly lower levels of the Rules and Regulations.

2, the internal audit of the status and functions is not clearly difficult to play the role. Some departments or units have sufficient understanding of internal audit, internal audit organizations in many units will be merged into the discipline inspection, supervision or accounting department, or by part-time accounting staff. According to the statistics: only 30% of the country set up a sound internal audit units of institutions, more than 50% of units although the establishment of the internal audit agency, but not complete, the agency has set up internal audit units, only 56% of the internal audit agency is supervisor or the Audit Committee by the highest leadership of the other or by the deputy director, chief financial officer or the head of internal audit of the status has not been given due attention.

Internal audit units of institutions are the main responsible person in the unit working under the leadership of his audit of the object are the same level of the business units, from all aspects of external and internal pressures and interference, will influence the independence and authority of the audit . its role in the play depends on the degree of emphasis on leadership, its status changes with the change in the leadership. audits and corrective measures proposed by the audit observations and recommendations, and can not cause Pishendanwei sufficient attention, can not get carry out and implement the .

3, the internal audit purposes is not clear enough. Internal Audit is to strengthen economic management and control of the audit carried out to improve economic efficiency, and its fundamental purpose is to serve managers, domestic service. However, our government departments, state-owned enterprises internal audit unit, the planned economy to socialist market economy, should the needs of national audit set up. State regulations through the development of regulations and other forms of government departments, state-owned enterprises and institutions must establish internal audit system. Therefore, the department internal audit system is established and units of government with a clear audit of color, is a government action. Internal Audit work for the state audit services primarily as a national audit of the supplement. Therefore, the long-standing lack of effective demand audit, internal audit lack of clarity in objectives, internal audit work is still unable to get the attention they deserve.

4, internal audit personnel structure is not reasonable and necessary to further improve service quality. As late start of the internal audit, internal audit theory Research and personnel training is lagging behind, resulting in uneven quality of internal audit staff, most lack the expertise of the system and a wealth of practical experience, the overall quality is not high. Additionally, the administrative institutions and state-owned enterprises mainly from the financial sector internal audit staff, and some come from other professions to change jobs. Although they have a system of financial and other professional knowledge and rich practical experience, but the lack of professional training system audit, independent audit of the lack of compound talents. private enterprise internal audit is a late start, lack of guidance of strong operational norms, arbitrariness of internal audit, blindness , disorder is very obvious. reposted elsewhere in the Research Papers Download http://www.hi138.com 5, the internal audit techniques lag, difficult to adapt to work requirements. Currently, the majority of internal audit staff not familiar with the computer audit work, Many still remain in the traditional manual audit based on audit. audit methods are backward, the audit will not only increase the difficulty and low efficiency, the accuracy was poor, seriously affecting the auditing role to play.

Second, measures to improve the analysis of the internal audit
(A) accelerate the <<Audit>> and supporting legislation to modify and improve the process for internal audit to provide a more solid legal protection. At present, the development of <<Internal Audit>> or <<Internal Audit Regulations>> the conditions the case is not yet mature, should speed up the <<Audit>> modify the schedule. <<Audit>> changes to respond to internal audit settings, staffing, professional qualifications for the people, work rights, duties, etc. legal form should be clear positioning. At the same time, should increase <<provides >>,<< guidelines>> the promotion and implementation of efforts to carry out internal audit to create a good environment, improve society's understanding of internal audit.

(B) to accelerate the pace of internal audit profession. Professionalization of the internal audit is still in its infancy. At present, many developed countries have established internal audit professional organizations, but also established a global internal audit professional organizations - the International Institute of Internal Auditors . China has 29 provinces, autonomous regions and municipalities had established internal audit associations, municipal (prefecture) level branch associations and departments are stepping up preparation. internal audit from the host to industry self-regulation, to provide a good internal audit development platform. Therefore, the Institute of Internal Auditors has to speed up the formulation and revision of the internal audit features for professional standards, in order to regulate the behavior of internal audit staff and agencies to ensure the quality of internal audit work. The second is to give the internal audit work specific guidance, such as the exchange of the internal audit information, publish technical specifications, inspection of quality. The third is for external information exchange and personnel training, attracting foreign advanced the concept of internal audit, but also various forms of training activities organized, constantly updated auditors business knowledge, improve their professional quality.

(C) explore various forms of internal audit setting mode, improvement and development of internal audit. The establishment of modern enterprise system, set up business management features for internal audit. Set the internal auditor should not only consider whether the setting with other agencies adapt, but also consider the fit with the management, communication channels both in the information management and timely reporting to the audit results, audit recommendations, but also the choice in the audit reflects the management's will. Thus, in the modern enterprise system The establishment of internal audit bodies under the two modes to choose from the following: First, each business unit within the department to set side by side with the independent auditors, in the unit under the leadership of the main charge, on behalf of the operator to strengthen management and improve their efficiency services; the second is an audit committee under the Board, Chief Auditor responsible for the implementation of the system, independent of business management, the various aspects of business management audit, the Audit Committee and Board of Directors is responsible for reporting.

(D) optimization of internal audit resources to meet the market economy and social development. With the change of government functions, government departments, the audit of internal audit matters of subordinate units will be less and less. Only those who manage public utilities, government departments, such as: education, health, science and technology departments, because of its management units more, the internal audit function needs strengthening. and those subordinate units less the role of government departments will be relatively smaller internal audit, internal audit by audit institutions of the sending State agencies. Similarly, the enterprises should be based on objective circumstances, decide whether to set the internal audit organization. If the internal audit work carried out although necessary, but workload is limited, you can commission public auditing organizations to provide internal audit services, without having to dedicated internal audit body. Otherwise, it should establish an internal audit agency, full-time in the supervision and inspection work.

(E) gradually streamlining and improving the relationship between internal audit and status. In the relationship between the leadership of internal audit organizations to improve the status of the person in charge to strengthen the internal audit of the relative independence and authority. In the relationship between the leadership to fully consider the choice of audit and operational activities, the accounting department and other management relationship and try to avoid the accounting work of a person is leading, and leading the audit, it is easy to affect the independence of the audit.

(Vi) improve the quality of internal audit, internal audit work to meet the needs. To strengthen auditing and oversight mechanisms, there must be a high-quality, high-level audit team. They not only have good professional ethics and professionalism, but also the work to a higher level of skills and auditing theory, but also must be proficient in modern enterprise management theory and methods. Therefore, improving the quality of internal audit, internal audit staff of professional structural optimization, multi-source of its origin. either from the High Court schools to attract students of different professions, but also from the accounting firms, other industry recruiting experienced professionals. At the same time, but also to strengthen the internal audit staff follow-up education to ensure the professional quality internal audit continue to adapt to the changing economic environment.

(Vii) transfer of the internal audit focus from simple troubleshooting a variety of measures to promote the advancement of management changes. First, the internal control system audits to be carried out to evaluate the integrity of internal control system management and effectiveness of internal control to improve management services. Second, to carry out special operations on the audit, evaluation units of its sector policy-making and implementation of rules and regulations and whether the intended target. Third, the activities of the department's management audit, evaluation of its management functions play situation and the effectiveness of various management measures. Fourth, to actively carry out various objectives of economic responsibility audit or outgoing audit, evaluation sector units responsible for the fulfillment of economic responsibility. reposted elsewhere in the Research Papers Download http:// www.hi138.com