Research On The Development Of Internal Audit In China Since The Reform And Open Policy

China's modern internal audit was initially built up in 1983 at the early stage of reform and opening up. So far we have not only accumulated plenty of experiences but also met various problems in the past 20 years' development of China's internal audit. Facing up to the challenge of economic globalization, it is the ways of development with respect to China's internal audit that weigh a lot. Analyzing present situation, finding out existing problems, proposing reasonable suggestions and describing fantastic pictures of the future altogether constitute the image of current studies on China's internal audit. In my opinion, only by comprehensive and systematic study on the history of China's internal audit in the past 20 years and reliable conclusion based on the historical studies, can we acquire reasonable resolutions to the problems we met. However, this field is still a virginal place to explore. Given the contexts above, harboring a sincere feeling of responsibility, in this paper I survey the history of China's internal audit and try to look for something of great value and regularity about internal audit in the process of development in order to provide a better guidance to China's internal audit work in the socialist market economy. By analyzing the legislative features of internal audit in different developmental stages respectively and the different economic elements, revealing the characteristics of internal audit's contents and goals, the paper concludes that the evolving process of China's internal audit can be divided into three stages.The first stage involved with the establishment and development of China's modern internal audit, we should firstly take the political and economic backgrounds into consideration because China's modern internal audit was set up under the Government's strong promotion, which was different from the western pattern of interior accountability, and we can regard it as a special feature of China's modern internal audit. The paper states the feasibility, rationality and necessity of the establishment of China's internal audit. Furthermore, the paper points out that the scope of internal audit work focused on governmental sectors and important state-owned enterprises. I also think that the internal audit function lied in the supervision and control of state-owned assets and character of the internal audit was passive prevention from faults. With the deepening of reform and opening up, the Third Plenary Session of the 14th session held marked China's entered into the socialist market economic system on a full scale and also marked China's internal audit stepped into the stage of comprehensive development. The development of market economic system and the formation of modern enterprise system objectively put forward new requirements for the internal audit system and all these actually promoted development of the internal audit in comprehensive manner, notable for the internal audit legislative level raised, the scope of internal audit constantly expanded, the audit function continuously increased, the character of internal audit gradually shifted to pursue benefits positively. The paper underlies that the developmental process of China's modern internal audit has always been connected with the specific national conditions. In this study, through the analysis of mutual relations between them, we can explore the essential characteristics of internal audit and its developmental laws under China's socialist market economy. Since 2003, with a new "internal audit procedures in auditing administration" promulgated and related guidelines proposed as the hallmark, the internal audit in China has entered a new period of development, which was a major historic turning point. Our internal audit has gradually shifted to more legalization and professionalism. It has begun to create value and is now in line with international standards. In the final part, by looking back on the history of China's modern internal audit, I sum up historical experience and lessons and find the deficiencies in internal audit so that we can propose improvement measures and predict the developmental direction of China's internal audit.