Establishment Of Risks-oriented Internal Auditing Model In Securities Companies

For recent years, the internal auditing in securities companies has become animportant part of its risks control system, according to the intensified oversight over theindustry and the rapid development of its compliance operations. To better adapt to therequirements for the functional shift of internal auditing, securities companies need tobuild a new auditing model. The “risks-oriented” internal auditing becomes an imperativeissue under such circumstance. Only by applying such a new model in the practical work,can companies identify and prevent the business and management risks in an early andtimely manner.This paper focuses on the challenges as well as coping strategies of the internal auditingfunction of securities companies in the process of transition to “risks-oriented” auditing model,analyzes such a new model’ impacts on the internal auditing function as well as some weaknesswith regard to its application, identifies some effective measures to ensure the model isimplemented effectively, and finally discusses the development trend of this model.The first part introduces the study’s background information, research significance, statusquo, contents and structure, methodologies, as well as innovations and weaknesses. The secondpart briefs the internal auditing function of securities companies in four aspects, namely its history,evolution, status quo and interrelationship between the internal auditing function and thecompliance management of key risks control departments of securities companies. The third partpresents the application of “risks-oriented” internal auditing model, such as its impact on theinternal auditing function, the practices and results, and the weaknesses in its evolution. The fourthpart discusses the ways to improve “risks-oriented” internal auditing from the perspectives ofpositioning of auditing offices, enhancement of auditing capacity, formation of quality controlsystem and establishment of performance evaluation system. The fifth part analyzes the applicationof IT technology in the internal auditing of securities companies with regard to the requirements ofits development, and discusses about the auditing measures applied for employees’ malpractice.The sixth part is the conclusion and research prospects, summarizing the application of“risks-oriented” internal auditing in China’s securities companies and envisaging a higherstatus for internal auditing and the development of auditing measures.