Study On Risk-oriented Internal Audit Of Pirvate Listed Companies In China

In recent years, the world economy has gone into the era of globalization, companiesfacing the changing production and management environment and had to accept the challengeof all kinds of risk. So companies pay more attention to the risk management. Internal audit isnot only the essential means of risk management, but it also the important content of internalcontrol. The internal audit should play an irreplaceable role in the enterprises’ riskmanagement. Risk-oriented internal audit as a modern audit concept has not been formed asystematic theory research achievement in China and it also was not widely promoted in thepractice. Therefore, researching on the application of the risk-oriented internal audit in Chinahas some theoretical and practical value.The article chose private listed companies in China as the object of the research ofrisk-oriented internal audit, it mainly based on some reasons below. On the one hand, thenumber of the private companies in our country grows with each passing day, and they areplaying a vital promote role in the process of our country’s economic and social development.For instance, private companies play a more and more obvious role in optimizing theindustrial structure, employment promotion and maintaining the social stability. On the otherhand, most of private companies were developed from the family business and many have notset up the modern corporate system. So the private companies need to build the moderncorporate system and complete the business management in order to seek further developmentin the competitive environment. Pushing the risk-oriented internal audit in private companiescan improve the corporate governance, internal control and risk management. And it can alsopromote the establishment and perfection of the modern enterprise system. In addition, privatelisted companies in China are the companies with a large-scale and relatively perfectcorporate governance, and it has a vital practical significance to carry out the risk-orientedinternal audit in those companies.The article combined both of the normative research and case study in the analysis.Based on the research findings about risk-oriented internal audit made by the scholars at homeand abroad, and the three major supporting theories of the risk-oriented internal audit: principal-agent theory, risk management theory and strategic management theory,the papercombines the development history and characteristics of private enterprise’s internal audit inChina with the selective analysis about the positioning of the organizations of therisk-oriented internal audit and the demarcation of the audit scope and the construction of thesafeguard mechanism for carrying out the risk-oriented internal audit in private listedcompanies. It chose one of the private listed companies in our country that is New HopeCompany as the object of practical inspection. And it applies the frame system whichconstructed in the article to New Hope Company, and based on the company’s specificcircumstances, it makes a practical inspection of the frame system.