Research Of Risk Oriented Internal Audit In Commercial Bank

With the political and economic environment becoming more volatile, the business environment corporations faced with is more and more complex and volatile.in such condition, it is essential for an enterprise to be able to control the things uncertain in the future, which means enterprises should attach importance to risk management. The risk oriented audit emerged in response to the enterprises’ need.As the main part of financial industry; banking industry has implemented risk management for many years. But in recent years. the problem of risk especially the role of internal auditor in risk assessment has been emphasized. A new and higher requirement for internal audit in banks is proposed in Basel Ⅱ, Internal auditor in banks should implement assurance and consulting activities extending the systemic assessment to the corporate governance, risk management and process control. So that they could offer valuable information to senior executives and directors, adding the value of the bank and making the internal audit work. The requirement proposed in Basel Ⅱ is the requirement of implementation of risk oriented internal audit in essence.Thus in this article,we will step from the theory of internal audit, and then seek the well implementation in banks via relevant theory study and case study to make the risk oriented internal audit serve banks well.There are six parts in this article. The first part is Introduction, including research background and literature review. The second part is the.Based on relevant theory of risk oriented internal audit, the second part introduces the historical evolution of internal audit including finance oriented internal audit, business oriented internal audit, management oriented internal audit and risk oriented internal audit.Besides, it also reveal the meaning, object, aim and function of risk oriented internal audit, and also shows the general process of it including audit plan, audit implementation and later stage.The third part is the implementation of risk oriented internal audit in banking industry. It discusses the necessity of implementation of risk oriented internal audit and types of risk in banks and general audit process in western countries. The forth part analysis the case of China of Bank, including its’operation environment of internal audit system and make an assessment. The internal audit system include governance structure, internal control system,the function and terms of reference of audit committee and audit department. It also includes audit organization structure, management mold and process of audit. In the last part, the article proposed that risk oriented internal audit is an inexorable trend with the development of audit. Risk oriented internal audit plays the role of safeguard in risk management.