A Study On Improvement Of KPI For Internal Audit Sub-department Of ABC

In recent years, internal audit plays an increasingly important role in domestic andforeign large enterprises risk management, corporate governance and internal controlprocesses. At the beginning of the joint-stock reform, the Agricultural Bank of China(ABC)established an vertical management internal audit system, with an internal audit departmentat Head office and ten internal audit sub-departments in the country accordance with theregional. As the agency of internal audit department, the sub-department is responsible forthe most internal audit work and the main implementer.ABC sets up a key performance indicators (KPI) system to measure the performanceof internal audit sub-department and incentive them perform their duties. The HRdepartment and internal audit department jointly responsible for performance appraisal ofinternal audit sub-department. But the existing KPI are still some problems, need forfurther optimization.This paper research the existing KPI of ABC internal audit sub-department firstly,application of the Balanced Scorecard concept, from the input-output, customersatisfaction, internal processes, learning and growth in four dimensions, decompose thestrategic mission and organizational responsibilities layer by layer, to build a set ofoptimized KPI. Then,the paper give different weights to every index using AHP. Finally,analysis the feasibility of the optimized system.Significance of this paper is reflected in two aspects.First, the paper build a optimized KPI system in line with the internal auditcharacteristics, in line with the actual ABC internal audit sub-department.This optimizedsystem can objectively measure the true performance of sub-department and incentive themto perform duties to ensure the healthy development of ABC.Second, ABC internal audit sub-department is similar to the sending internal auditdepartment of many group companies. Optimization of KPI system is available for the useof many similar enterprises in the assessment of internal audit offices, research related tosupplement internal audit performance appraisal theory has some positive effects.