Study On The Role Of Internal Audit In Enterprise Risk Management

Risk is common in our life. As an inherent characteristic, People made their effort to avoid risk even in ancient time. In 1990's, the trends of economic globalization brought about new markets, new competitors, new products and new technologies, which dramatically increase the speed business, doubles the instability of capital market as well. At the beginning of 21^st century, the corporation bankrupts and governance crisis happened one after another, which not only makes investors, employers and other stakeholders being disastrous, but also means the beginning of the era of risk management. It is necessary for enterprises to focus on how to avoid risk and setting risk management as their core strategy. Facing the god-given chance, the Institute of Internal Audit approved its new definition of internal audit at its June 1999 meeting. From then on, risk management will be one of the three objectives of internal audit and that will be significant for internal audit and risk management in such an inconstant environment. The role of internal audit in risk management begins the hotspot of lately research.This paper will systematically research the role of internal audit in risk management. Its contents include review of the historical evolvement of practices, theoretical analysis of its driven factors, narration of the newest idea-Enterprise Risk Management, analysis of the current condition of the role of internal audit in risk management, discussion of the nature of internal audit and how it works in risk management. The context will be on the base of historical review and theory research, combine analysis of current condition, then discuss the role of internal audit in risk management and how it works.