The Discussion On Internal Audit Outsourcing Of JHAD Company

With the development of our economy,China is currently in the critical period of economic development model transformation,the traditional internal audit is not enough to meet the needs of enterprise development in our country,so the role of social and economic of internal audit outsourcing in China has become increasingly apparent.But it is still not tall enough attention from the theoretic for internal audit outsourcing,cognition degree is not deep enough,also has not yet formed a complete set and persuasive theoretical system.This article first introduces the research background,outlines the research significance,and review the relevant study of internal audit outsourcing,scholars both at home and abroad from theory to understand the connotation,classification and motivations of internal audit outsourcing,understand the development of internal audit outsourcing and the effect of internal audit outsourcing both at home and abroad.According to the problems encountered in the outsourcing of internal audit of other companies,to analysis of internal audit outsourcing,how to play to its advantages in specific company.This article presents the research of the internal audit outsourcing from the feasibility of internal audit outsourcing,type,meaning,influence factors and theoretical basis of classification by the scholars,to improve the awareness of internal audit outsourcing of company personnel,especially the management on the basis of the theory.JHAD company formerly known as JHAD city power supply bureau,was founded in 1973,is an enterprises which wholly-owned by state.In December 1998,commissioned to escrow by the JHAD municipal people's government to Jiangxi power grid company(former was Jiangxi electric power JHAD power supply bureau),was charged by the Jiangxi power grid company.There was the following four points of JHAD company basically management features,historical burden is heavy,regional monopoly,public entrepreneurship and big investment scale.The impetuses for the implementation of internal audit outsourcing of JHAD company has the following several points,unreasonable internal audit institutions,auditors temporary shortage,lack of professional competence of internal auditors,restricting the independence because of the internal audit way.So JHAD company urgent need internal audit outsourcing to solve some problems of the company's own internal audit.This paper first masters the basic situation of JHAD company,including its development,main business,the company organization structure,staff education,corporate finance and management features,etc.And it introduces the JHAD company's internal audit organization structure and then found of the seven key areas of the company internal audit risk and introduces the motivation why JHAD company put into force internal audit outsourcing.And then through the analytic hierarchy process(ahp),JHAD company's internal audit outsourcing decision-making model is established,and on the basis of the CPA firm's qualifications,professional ethics,the charging situation,independence,industry reputation,the paper illustrates the business evaluation and selection for internal audit outsourcing,the final assessment score mechanism was through by outsourcing appraisal.Through the above analysis and evaluation,and on the basis of the implementation of internal audit outsourcing of JHAD company,eventually reach enlightenment.In this paper,the research results indicate that it is feasible to conduct internal audit outsourcing in JHAD company,but should pay attention to the scheme design of the internal audit outsourcing,after decided to conduct internal audit outsourcing,the company should according to the order which was as following,choosing outsourcing form,choosing outsourcers,signing the outsourcing contracts.Each process should be set reasonable.Selecting outsourcers should go through public bidding.About outsourcing contracts,enterprises should consider their own needs and then assess risk.The control and supervision of outsourcing and reasonable scheme design is the key step in the internal audit outsourcing success.Also high-quality service of internal audit outsourcer was an urgent need to outsourcing,enterprise should consider which outsourcing way is suitable for their own.Enterprises can establish the decision-making model by means of analytic hierarchy process(ahp),to judge the part of outsourcing,not outsourcing,full outsourcing of the three forms of which is best for yourself,to reach double win of the company internal audit staff and intermediaries.After implementation the outsourcing of internal audit,how to evaluate the effect of audit outsourcing,seting up internal audit outsourcing quality evaluation system is very necessary,and shall establish responsibility mechanism after the quality evaluation system.Based on the on-the-spot investigation method,analytic hierarchy process,case analysis,the article illustrates the conclusions of this paper powerfully.Compared with the previous academic research,this paper improved the introduction to the important content of internal audit outsourcing,based on it,the advantage of the internal audit outsourcing are discussed.The content mostly is the key point in the process of internal audit outsourcing,it need to be noticed in the process of implementation of the internal audit outsourcing.In addition,most of previous research has focused on internal audit outsourcing in theory,the plate very little in-depth analysis of the related report in view of the internal audit outsourcing case.So in this paper,which based on the JHAD company,and on the basis of JHAD company internal audit outsourcing case,it is concluded that some relevant inspiration of internal audit outsourcing reached.This study summarized the successful experience of internal audit outsourcing of JHAD company,provided experience for reference of other projects for JHAD company outsourcing,and has certain reference meaning for other companies in the industry.