Risk Based Internal Auditing In Rural Commercial Banks

With the development of society and economy, the traditional auditing mode giving priority to accounting number-based auditing and system-based auditing can not meet the actual needs of enterprises. In this case, China Institute of Internal Auditors released a new revision of the internal auditing standards, emphasizing that the internal auditing wok should be based on risk assessment. In this context, all walks of life are trying to establish and perfect the risk based internal auditing. And for commercial banks, reform of the financial system, Interest rate liberalization, Internet banking and the increasing diversity of commercial banks have led to increasingly fierce competition, complicated and changeable risk. Therefore, risk management should be strengthened. As internal auditing is the third line of defense in comprehensive risk management system of commercial banks, developing the risk based internal auditing system becomes imminent. Meanwhile, with business scale expanding rapidly and business structure becoming complicated, the rural commercial banks are appearing in risk diversification trend. Consequently, the rural commercial banks should improve risk management level urgently. But its existing risk prevention and control methods can’t meet the requirements of business development for risk prevention and control. The implementation of risk based internal auditing system and mode contributes to strengthening the risk management of commercial banks in rural areas and achieving its goal of safe, efficient and stable development. Although rural commercial bank has carried out the preliminary risk based internal auditing, but it did not establish a system and comprehensive system.This paper introduces the basic theory of risk based internal auditing firstly, analyzes the current situation of risk oriented internal auditing in rural commercial banks, and then try to build the framework and procedures. After that, the paper analyzes the risk based internal auditing in A rural commercial bank in the form of case study and then puts forward some constructive suggestions about how to implement risk based internal auditing in rural commercial banks, hopes to play a positive role in the practice of risk-based internal auditing in rural commercial banks. The contribution of this thesis is three-fold. First of all, this study try to build the framework and procedures on the basis of the basic theory of risk-based internal auditing. In addition, this research has analyzed the practice of risk-based internal auditing in A rural commercial bank, discussed how to carry out risk assessment and audit plan based on risk assessment results, etc. The analysis provides reference for the practice of risk-based internal auditing in rural commercial banks. Finally, the paper puts forward some constructive suggestions about how to promote risk-based internal auditing in rural commercial banks. It has a certain guiding role in the establishment and improvement of risk-based internal auditing in rural commercial banks.