Research On Value-added Internal Audit Of YC Bank

The world economy is developing forward rapidly with the attitude of marketization, globalization and knowledge-based, the commercial bank market competition is increasingly fierce. In the face of financial risk gathered, the commercial bank establish modern enterprise system in accordance with the relevant laws and international conventions. Strengthening the internal audit of commercial is not only the requirements of establish modern enterprise system, but also the inherent need of strengthen internal management, improve bank’s economic efficiency and against financial risks. The internal audit is playing an important role in the governance mechanism of commercial banks. Although internal auditors not directly engaged in business activities, as the main supervision of the board of directors for business management means, through found the recommendations for banks to reduce loss, through play a deterrent effect can restrict and urged the management to their operators of irregularities diligently to create better results. After all, internal audit is a kind of mechanism to guard against operational risks and increasing bank value essentially. The transformation from internal audit to value-added internal audit is indispensible for internal audit to maintain its position in the strategic reorganization of enterprise institutional framework.This thesis takes the YC bank as an example, mainly using research methods of theoretical analysis, case analysis and comparative analysis. The basic research train of thought is "introduction-theoretical overall review-the problems and Causes in case bank- good experiences of outstanding bank-suggestions " On the basis of accountability theory, risk management theory and value chain management theory, to discuss the commercial banks of value-added internal audit problems as the theme, analysis of YC bank value-added internal audit problems and causes, finally put forward some suggestions on perfecting value-added internal audit of YC bank.First of all, this article elaborates the definition, constituent elements of value-added internal auditing and analyzes the differences between the traditional internal audit and value-added internal audit in audit concept, audit goal, audit scope and audit object, then elaborates the commercial Banks internal audit play a value-added role in the field of corporate governance, internal control and risk management. Secondly, taking YC bank as a case study, YC bank’s basic situations and value-added internal audit are introduced. Then problems of YC bank’s value-added internal audit are presented, including:(1) The role of internal audit in field of corporate governance has not yet been revealed. (2) Internal audit in the bank internal control system running effect is not ideal. (3) Internal audit supervision over the bank’s risk management system is not in Place. (4) Unconspicuous of Value Added Effect and Low efficiency of Audit. (5) Lacking of audit corrective and lower quality of value-added internal audit (6) The auditor is passive in work, consulting functions failed to play. Then the causes of existing problems of value-added internal audit in YC bank are analyzed, mainly involving the following aspects:(1) Bank management’s awareness of the value-added concept and goal is weakened. (2) Audit institutions setup is not reasonable, lacking of indpendence. (3) Governance structure of bank is imperfect. (4) Auditing system informatization level is not high, audit technology is fall behind. (5) Consistent value-added performance evaluation standards has not been built. (6) Poor performance of internal auditors. Thirdly, compared with the situation of value-added internal audit in Industrial and Commercial Bank of China, the successful experience of value-added internal audit in Industrial and Commercial Bank of China is summarized, including the following four aspects:The new internal audit concept; Independent and vertical management of internal audit organization system; Informatization of internal auditing systems; Professionalization of internal audit team. Finally, after getting existing problems and causes of value-added internal audit in YC bank, suggestions are put forward to perfect the value-added internal audit in YC bank after used the successful experience of value-added internal audit in Industrial and Commercial Bank of China. From the following several aspects to improve the value-added internal audit in YC bank. (1) Raising bank management’s awareness of value-added internal audit, and mainly including:Improve the internal governance mechanism; Establish audit service concept with characteristic; Strengthen the communication with management; Actively marketing internal audit. (2) Reform and improve the internal audit organization system, and mainly including:Improve the management mechanism of the internal audit institutions; Strengthen the construction of regional audit center; Develop the internal audit charter. (3) Expand the scope of services for value-added internal audit, and mainly including:Actively carry out consulting services; Strengthen the value-added services in the field of corporate governance; Strengthen the value-added services in the field of internal control; Strengthen the value-added services in the field of risk management. (4) Innovation of value-added internal auditing methods and means, and mainly including:To speed up the pace of informatization construction of audit; Transformation of the mode of auditing; Strengthen audit corrective and application of audit results. (5) Building performance evaluation system of value-added internal audit, and mainly including:Building the balanced scorecard value-added internal audit evaluation index system to measure performance; Make the evaluation results linked to incentives. (6) Improve the comprehensive quality of internal auditors, and mainly including:Optimize the structure of internal auditors; Strictly the auditor’s barriers to entry; Establishing employees’self-study incentive and concentrated training mechanism.