Study On The Optimization Of Internal Audit Of Huantian Group

It's an important policy to carry out the strategy of developing large companies and large enterprise groups during the process of the reform and development of state- owned enterprise. An enterprise group forms a multi-level accountability system with its complex and multiple principle-agent relationships and corporate governance. Intenal audit (IA) plays an important role in the corporate governance by eliminating asymmetric information and assuring the full and effective performance of accountability. With unprecedented growth of enterprise groups, the traditional internal audit meets with many new problems which are need urgentlty to be solved withing enterprise group, such as the intersection of internal audit and external audit, the amalgamation of the internat audit and governmental audit, the limitation of the functions and methods of traditional internal audit, etc. These problems has brought unprecedented opportunities and challenges to the next development of IA.The dissertation makes deep study on how to establish and enforce internal audit control mechanism with case studies. Firstly, the dissertation theoretieally analyzes and surnrnarizes the relationships between corporate goverance, intenal control and IA with principle-agent theory, incomplete contract theory and accountability theory. Secondly, the dissertation discusses on the establishment of internal audit control mechanism. Finally, the dissertation proposing measures for the optimization of the internal audit control mechanism within HuaTian Group.According to the present conditions of internal audit of HuaTian Group, the thesis creatively puts forward the following suggestions: Firstly, HuaTian Group should transfer the function and orientation of its internal audit from auditing the revenues and expenditures to preventing risk. Secondly, the member enterprises of HuanTian Group should establish different internal audit organization according to each corporate goverance structure. Finanlly, a scientific, strict and normative working process of IA of Huantian Group is necessary to be enacted.