Analysis And Solution On Major Problems Of Enterprises' Internal Audit In China

Modern internal audit stemmed from 1940s. In Western developed countries, the internal audit system was spontaneously established according to enterprises' need of better management in order that enterprises can survive and keep going on. Different from this, internal audit system of our country was established with the help of government intervention and top-down administrative and legal means. From 1983 in which year China's internal audit system was established, internal audit has made tremendous development. It has become an important part of corporate management system and an important means of effective internal control and supervision. Enterprises in economic environment of Market economy and modern enterprise system are faced with complex market situation and fierce competition, which makes it necessary for internal audit to be involved in all the management activities of enterprises, so that it helps manager to run the entity and to make correct decisions. However, the present internal audit is unable to meet the needs and requirements of modern businesses because it has problems in such aspects as laws and regulations, institutional arrangements, quality of personnel and so on. This article aims to analyze these problems of present internal audit and to explore effective measures. And its main content reads as following:The preface part is about the background and significance of the research, document review and the research methods.Chapter one tells basic conceptions of internal audit and basic theories related. Its first part is about essence, objective and functions of internal audit. Its second part is about system theory and theory of internal control.Chapter two is about the historical evolution and the current situation of internal audit in China.In 1983, by administrative and legal means, our internal audit system was established with the help of government intervention. Before the establishment of socialist market economy, the primary responsibility of China's enterprise internal audit was to perform supervisory functions such as revenue and expenditure audit and financial audit. In this way enterprise internal audit safeguarded the legitimate economic interests of enterprise itself and of nation as well. The establishment of socialist market economy and the continuous progress of economic reform make effective audit play a more and more important role. At present, China's enterprise internal audit is moving from traditional financial audit to a new phase of management audit.