The Research On The Optimization Of Risk-oriented Internal Audit In XM Securities Company

China’s securities market has been developed for 30 years since the Reform and Opening up Policy. The securities industry is high-risk, is concentrated of capital、 talented person and innovation, is intense competed and has significant cyclical characteristics. So the internal audit of Securities Company has its particularity. As the request of China Securities Regulatory Commission, Securities companies in China must set up internal audit department, so does the compliance management and risk management department. These sections work together to improve the internal controls. Due to the high-risk and differences in business, risk-oriented internal audit is the best choice of securities company.Internal audit in securities company regularly conducted since 2008. But once the financial market changes, management issues outbreaks every time, while the ongoing internal audit failed to expose the defect. It means the development of internal audit is far behind business.Innovation is the driving force for the development of the financial industry, change is the eternal theme of securities companies. In order to adapt to the new environment of the securities industry, to deal with the risk of the stock market and new financial products, internal audit of Securities Company must redefine functions, carding processes and expand new model. Because of the comprehensive risk management of Securities Company, the risk-oriented internal audit is also an inevitable trend. In order to play a role in development of Securities Company, to improve status of internal audit, the work must be based on risks, assess risks and focus on risks. Internal audit gets better understanding of the company’s operations and securities management system, much more than the external audit. So internal audit can help in timely detection and early warning on risk matters, it gives suggestions of control measures to solve the problem, and also helps the organization to achieve strategic objectives.I had four years work experience in a securities company, and once worked in compliance department, internal audit department and risk management department. The securities company lives in a high-risk industry, it is a representative of the financial industry, so the discussion on risk-based internal audit of securities company is significant in theories and valuable in application.In this paper, we combined with practical work experience, concluded the new progress of academic research, we take XM Securities Company as an example, and do research on risk-oriented internal audit in securities company. We should pay attention to the shortages of corporate governance, strategic planning and risk assessment, take measures to improve efficiency and effect of internal audit. The characteristics of securities industry leads to the certain particularity of internal audit in securities company. Securities company has different businesses, high level of IT system, and also has many branches scattered throughout the country. The SEC forces securities company to establish internal audit department and introduced a number of requirements for internal auditing. The high risk of industry makes securities company take the risk-oriented internal auditing method. The compliance department, internal audit department and risk management department composed internal control system, they each have different responsibilities and should work together to keep the company fit.After anglicizing XM Securities Company, we find out that there are several defects in internal auditing. The position of internal is awkward, it is in relatively lower status. The risk assessment of internal audit in fact is not performed. There is a few internal audit staffs so that they take a lot of work. As while the salary is no satisfied, so the internal audit department takes great staff mobility. Because of all the reasons,the effect of internal audit is inconspicuous. We make some optimization proposals for securities companies to optimize risk-based internal audit. Our suggestions carried out from of corporate governance, strategic planning, organizational structure, and other aspects of the audit process. We also consider the frequently use of IT systems in securities company.We have innovations here; in this paper we discussed division of responsibilities of internal audit department, risk management department and compliance management department. We further rationalized the securities company’s risk-based internal audit process, discussed the internal audit practices, and focused on how to strengthen risk awareness, to develop the internal audit information system, improve the treatment of internal auditors and upgrade their professional skills.But there are shortcomings of this paper. As the securities industry rapidly changes, the study of this paper is mainly based on existing experience and the situation of comprehensive research process. But as we all know, the development of the securities business and management are changing day by day. New problems and new situations emerging, old defect may have been resolved. Therefore, the optimization and improvement this article explored is only suitable in this case-based research. For future development, it needs to be constantly adjusted and adapted to be used in practical applications.If internal audit department in securities company wants to play a role, it must be based on the entire distribution of the whole company’s risk. And auditors will focus on high-risk operations and products, findings and assessing risks objectively, providing improvement or advice on internal management and business development. Therefore, we must establish and improve the status of internal audit, optimize the internal audit organization, strengthen and implement risk-oriented awareness. The securities company should continue to strengthen the IT system of internal audit, to destruct the securities company’s risk-based internal audit system, improve the internal audit execution process, then reaching internal audit objectives.Securities companies should strengthen independent research and reprocessing capability of information technology management, encourage the development of continuous auditing system, and improve the timeliness internal audit system. Continuous auditing system requires a combination of on-line systems which root in the product systems, setting algorithm continuous, and continued to assess control condition and risk management.The manager of the internal audit department take responsibility for the whole audit work of the company. The quality of work is related to the risk control in internal audit. Manager should control the quality by audit work authorization, audit task list, checklist, audit working papers, audit trail table and other management instruments aids. It is the manager’s duty to ensure the effectiveness of the audit control.