Research On Enterprise Risk Management Framework Based On Risk-based Internal Auditing

The outbreak of the global economic crisis in 2008 intensified the competition among the enterprises, and also exposed some companies'management issues. In the competition, some companies were in trouble and even collapsed, while some companies have made new breakthroughs through improving and perfecting themselves. So many companies are aware of the importance of risk management, then how to make more effective risk management to reduce cost and avoid risk? This is precisely the point for companies to survive and develop in a crisis.This paper is divided into four parts, the first part put forward the problem, analyzes the research reviewed, clarifies the research methods, research framework and the innovations of this article. The second part analyzes the theory status and the development direction of enterprise risk management, this part not only analyzes the theory of enterprise risk management from the aspects of origin, content, theoretical basis, process and method, and also quotes the example of Co-Jun Group's risk management failure and Haier Group's success in the financial crisis, to illustrate a good internal control system play a crucial role of resisting and responding to risks, this part points out the direction of building enterprise risk management framework. The third part describes a new model of internal auditing, namely, risk-based internal auditing, this part introduces the relevant theories about risk-based internal auditing from several aspects of nature, objectives, functions, basic characteristics, and analysis of the external causes and internal cause of the risk-based internal auditing, and then come to the introduction of risk-based internal auditing model is a realistic choice of internal auditing. The fourth part analysis the necessity and feasibility of the enterprise risk management based on internal auditing, take the example of state-owned hydropower companies show an effective way to make internal auditing involve the risk management. Finally proposes the idea of building enterprise risk management framework should based on the risk-based internal auditing.Financial crisis is a disaster and also an opportunity for companies, It's especially important to strengthen internal risk management for the management, A good internal auditing system can increase the organizational value and improve an organization's operations, thus effectively prevent the risk. To be effective contact the risk management with internal auditing, the most urgent task is to study the link between risk management and internal auditing to e establish a framework which can provide theoretical guidance for the enterprise risk management, that is, to take effective measures to establish the enterprise risk management based on risk-based internal auditing.