Research On The Value-adding Function Of Internal Audit

The 21st century is a new century full of challenges and opportunities. In such a diversified and changing environment, things'nature in our mind has changed deeply. In light of the definition given by The International Institute of Internal Auditors, we notice that Internal Audit is a comprehensive audit which contains the factors of Internal Control, Risk Management, and Corporate Governance. This is the first time that the value-adding function to the organization has been written in the definition of Internal Audit. As a management mechanisms to ensure the effective implementation of accountability,this act indicate that Internal Audit has been located in a unprecedented height. It stands for the overall interests of the organization in order to play the role of efficiency-improving and value-adding.It's clear that the core of modern Internal Audit has upgraded to add value and improve the operational efficiency. This shift has given the deeper meaning to Internal Audit which promotes the changes of its occupational role, provides a rare opportunity to occupy an important position and also poses some severe challenges.The goal of the organization is to create value or benefit to the ownership, other shareholders, consumers and customers. Producing products, providing services and marketing them by the advantages of the organization is the way to realizing value. Internal Audit is not engaged in these activities, but they can collect and evaluate operating information by systematized and standardized method. In this process, Internal Audit staffs deliver this information to management staff through confirmation, advice, recommendations and other forms so as to realize the value-adding target for the organization.Normative research method is mainly adopted in this article. Firstly, we initiate the function of value-adding through the development of the definition in internal audit which including the background analysis, contents, features as well as the trends. And then we exert the theory of supply-chain on the value-adding function. In addition, we focus on the conditions, forms and channels of realizing the function which comprising the Internal Control, Corporate Governance and integration of GRC. At last, we extend the research in order to promote the practice of the value-adding function in China.