Analysis Of H Group's Internal Audit Transformation And The Consequences Of The Case

In recent years,with the continuous development of China's economy,great changes have taken place in the capital market and external financial environment;therefore there are many new challenges in increasing the value of enterprises.From1999 to 2002,WorldCom's profits were falsely increased.Fortunately,the internal audit manager of WorldCom discovered and exposed the significant financial problem so that the interests of corporate stakeholders would not suffer from a greater degree of violation,and since then,internal audit has become the focus of attention.After this,global enterprises began to focus on internal audit which requires companies to establish internal audit organization and ensure its independence.At the same time,IIA has developed new requirements for the functions and positions of internal audit and specifically pointed out that the goal of internal audit is to increase the value of enterprises which shall be achieved through the processes of corporate governance,internal control,risk management and so on.After the financial scandal of Enron,the US formulated the "Sarbanes-Oxley Act" in order to restore people's confidence in companies and their management.Accordingly,the Act requires the US listed companies to establish an audit committee to strengthen corporate governance,improve internal control and perfect the risk management system.With the development of the companies in China,more and more companies are moving towards the internationalization and have put more eyes on internal audit.Although the effects of internal audit on the improvement of the enterprise value has been recognized by domestic and foreign scholars and practical circles,the exploration of the functionary mechanism of internal audit in improving the enterprise value is still at an early stage as far as the current researches are concerned.Current literature mostly focuses on empirical researches,while there are not many case studies.This paper explores the effects of internal audit on the improvement of the enterprise value through the introduction of a case study of H Group.This study has some theoretical significance and academic value.This study has some practical significance.This paper will help listed companies to build and improve their internal audit systems to enhance corporate value.Meanwhile it provides the related government departments with a reference in avoiding risks by formulating relevant laws and regulations.Considering the important role internal audit has in the continuous development of companies,this paper introduces the case study ofH Group at length,based on which suggestions are provided in how to perfect the internal audit system for other companies to make full use of the internal audit functions.This study includes the following sections: The first chapter is the introduction.It proposes the research background,research significance and literature review regarding internal audit.The second chapter describes the theoretical overview and types of internal audit.The third chapter is the introduction of the case in the Internal Audit Transformation of H group,which includes the internal audit models of H Group before and after the transition.The fourth chapter analyzes the results of the internal audit transformation of H Group.The fifth chapter presents the related research conclusions and enlightenment from the case.