Papers Category:Securities Finance Papers
- Company Research Papers
Post Time:2011-11-10 11:10:00
Abstract: With the Group to establish a modern enterprise system and corporate governance structure, an increasingly important role of internal audit, paper, the current characteristics of our own group, the group internal audit outsourcing in the form of defects and internal audit outsourcing launched a strategy analysis.
Keywords: Group; internal audit outsourcing; risk control
An internal audit outsourcing
1 Based on internal audit outsourcing is Porter's value chain and competitiveness arising, it refers to the organization of its internal audit function partially or wholly outside the organization through contracts entrusted to the agencies. It is mainly in two forms: (1 full outsourcing.
This form of the internal audit function will all companies to accounting firms to do the whole, companies with no internal audit department, but companies can also be set or keep the Chief Internal Auditor to oversee the auditing of the implementation, and to act accounting services and management in the communication between the media. This form of internal audit outsourcing most opponents accused, its main drawback is the loss of a dominant position of internal audit, prone to 'hold-up' effect, but also lost the internal audit 'continuity' feature, which is an internal audit practice important aspects of the operation, so this approach would not set up primarily in the internal audit department of small and medium enterprises more popular. (2) co-audit.
Cooperation is the internal audit to retain a small number of internal auditors, for some regular, less important internal audit work carried out by internal audit staff, while a number of important and involves wider, requiring a higher level professional skills and a reasonable knowledge of the structure to determine the internal audit work by external and internal auditors who carried out jointly in co-operation in internal audit, internal audit staff participation throughout the internal audit work, in cooperation audit planning, decision-making and drafting the final report plays an active participatory role in the company's audit work, companies need to hire a CPA and according to other engineering, project management and other investment professionals to carry out ad hoc audits.
(2) Company of China Group in the form of internal audit outsourcing location
For the above two forms of internal audit outsourcing, co-operation of China's internal audit group should choose the form because this form allows the internal audit process and results more in line with the specific enterprise groups, because in the co-audit, internal audit staff and outside professionals on the audit approach, to agree objectives, internal audit can help the outside CPA and professionals familiar with their own situation, and ask what they are doing the work to sum up, in particular, a group of enterprise groups company, if the full implementation of internal audit outsourcing, it is difficult to process the audit process, is bound to increase the risk group while cooperative high level of internal audit outsourcing to hire professionals, in cooperation audit, the Group the senior management of the internal audit work based on the characteristics, employing different areas, higher levels of industry professionals, as opposed to all the outsourcing of internal audit to an accounting firm all cases, can increase the level of internal audit, and improving risk management and management process more efficient.
Second, the group internal audit outsourcing defects
Group internal audit outsourcing there are some advantages, for example, improve the independence of internal audit, cost savings, ease the task of auditing and audit weak and heavy contradiction can focus on its core competitiveness, etc., but there are also some shortcomings:
1 group of internal audit resources to waste
Internal audit staff familiar with the Group's management policies, business processes, operations and personnel situation, to understand the organizational culture, business processes and risk control features, to provide better long-term strategy in line with management consulting services, while external advisory body only through a number of public information and through inquiry and observation to determine the focus of services, often due to the need for confidentiality, business groups can not provide them with complete information, this is bound to affect the judgments and advisory bodies outside the enterprise further understanding, thus affecting the quality of consulting services.
In addition, because the internal audit staff have the right to have enough time and energy of the enterprise group to observe the various organizational units, so they have a unique perspective on business and detailed understanding, they can go deep into the group culture, a thorough understanding of the industry and the characteristics of the business, combined with the audit work to draw more valuable conclusions, while external auditors despite a wealth of experience, but that is the implementation of enterprise groups in the periodic external audit of the personnel, their responsible and understanding of the situation is far from the enterprise and internal audit staff, so some of their specific group or special circumstances, as well as key areas of audit recommendations and feasibility of reasonable depth of understanding can not be with the company's own internal audit staff compared to , not the interests of the entire group of people at ease.
2 The external auditor's loyalty is relatively low
Internal audit staff of their fate and the fate of the entire group is closely related to the success of management decisions are often made with the internal audit staff on audit findings, so the internal audit department will be more long-term interests of the unit, then conducive to long-term interests of the group come to the audit findings. In other words, the internal audit staff must first loyalty of their companies must take into account its findings and recommendations made in the entire group may cause side effects and because The group itself is a member of the organization, which determines the internal audit staff must have a strong loyalty and high sense of responsibility, while the external auditors, the accounting firm's employees as they and the group as Beishendanwei no stakes through thick and thin, their loyalty is relatively low, in-depth understanding of the audit process is difficult Beishendanwei specific circumstances, so they are difficult to audit findings from long-term interests Beishendanwei, and difficult to a high sense of responsibility to consider the special circumstances Beishendanwei.
3 easy to reduce the audit authority
Group internal audit outsourcing will help improve the independence of internal audit, internal audit, but not conducive to raising the authority of the internal audit of the authority depends not only on the support of the leadership and support a wide range of employees, but also on the relevant laws and regulations effective support. The external audit of the 'outsider' status is difficult to obtain the support and leadership of enterprise groups in support of the masses, so its more limited authority, in addition to the lack of authority is difficult to audit the balance of power within the enterprise and accomplishments, and relatively easy to being excluded or being bought, making it a certain degree of independence will reduce, so when the power to enter into external audit group, the internal audit of the authority will be greatly reduced.
4 The external auditor's work may be restricted by contract
Group's internal audit agency has a broad scope of the audit, internal audit staff can provide services for the group, with considerable flexibility, will not be restricted. When the group of companies to hire outside auditors to conduct an internal audit, external auditors will be in strict accordance with the contract to provide services to their audit process even in suspicious circumstances, if beyond the scope of the contract, without the permission of the client Before, they will not suspect track issues and risks and in-depth investigation, especially when unexpected situations arise, it will reduce the ease of internal audit work and flexibility. Links to free download http:/ / eng.hi138.com
3, the Group's internal audit outsourcing strategy
1 outsourcing of internal audit risk analysis and control
Group internal audit outsourcing there are risks, internal audit as an internal control group is an important part of the implementation of the validity of the entire group is very important, and the internal audit related to enterprise management, production management, marketing, finance and other , the contents of the trivial complex, and some content may be the business secret, so companies choose outsourcing service provider, we must consider their professional reputation, experience and professional expertise.
In addition, group companies should also control the following aspects of risk analysis: First, outsourcers can provide outsourcing services to the project or whether the scope of external audit services and corporate conflict now, whether affecting the independence of the two, followed by operations management and internal audit plan implementation process, the final total cost is estimated audit fee rate or hours, Enterprise Group Based on the above three areas, establish a strict risk control system, the external auditors on internal audit services, business transfer, staffing, business development, responsibility, confidentiality obligations, to clearly defined, and thus reduce the risk of outsourcing, and thus more secure internal audit work to do. Finally, the need to be clear that outsourcing is ultimately out of a 'from the inside out - from the outside to within the 'evolution path, so follow-up outsourcing company should pay attention to the benchmark from which to obtain new insights and constantly learning in an effort to internalize the external advantages of resources, thereby enhancing the company's own management and control.
(2) to strengthen the external auditors, internal audit knowledge and training
Group companies for outsourcing internal audit, internal audit and external audit in the audit, audit procedures, there are similarities, but both the audit objectives, contents, there is still a lot of different responsibilities, only to rely on external audit work methods to complete the internal audit work, it is difficult to meet the requirements of internal audit. Accounting firms should undertake the task of internal audit of the external auditors on a regular basis appropriate training, to strengthen the internal audit qualification certification, strengthening the conservative trade secrets and other professional ethics education, improve their writing skills, interpersonal communication skills, so also have the internal auditors should have quality, thereby increasing the external auditors in internal audit work competence.
3 to enhance the internal audit department's core competitiveness
Through internal audit department and external audit organizations combine to add to the internal audit staff and other business processing capability gaps, thereby increasing the efficiency of internal audit and quality. But the group internal audit outsourcing is not to undermine or replace the internal audit department, but should have been concerned about the internal audit department to enhance the core competitiveness. Because of the internal audit staff are familiar with this unit should focus on the business management and business process analysis and evaluation, and participate in the audit process and supervision, in co-operation in the internal audit department should audit dominant, while, the company should also take various measures to strengthen the internal audit capability, such as the timely knowledge of the structure with reasonable selection of the internal audit staff, drawn from members of the Group companies to establish internal audit staff part-time internal audit team, to encourage internal audit staff participate in business training and follow-up education.
4 to ensure good communication
Outsourcing of internal audit should be implemented in partnership good communication, implementation of internal audit outsourcing group, with the external auditors should be intensive exchange, discuss the company's vision, mission, values, and auditing principles, so as to enable them to fully understand the Group management's expectations, based on research carried out in the business, improve work efficiency and quality, minimize the effects of external and internal auditors working gap between management expectations, while the Group's management, the internal audit staff to understand the internal auditors and external auditors is a cooperative relationship between the external auditor is more efficient, more economical technology to help them, this can really accept the external auditors, internal auditors.
Through the above analysis that the group's internal audit of the existence of external benefits, but also there are some shortcomings, such as internal audit will result in waste of resources, easy to reduce the audit authority, etc. Thus, in carrying out internal audit outsourcing, should not be blind to carry out, should the situation with their own group, a series of measures to reduce as much as possible the form of internal audit outsourcing risks and further improve the Group's internal audit work.
 Wang Guangyuan. Qu Qu .2005 Internal Audit Outsourcing: Review and Prospects. Audit Research, 2:11 - 19.
 Bian side. Qidong Xiang .2002. External audit on internal analysis of the pros and cons of Economic and Management, 4:42 - 43.
 weeks Tametoshi .2002. Externalizing the internal audit of the study. Guangxi, accounting, 4:27 to 28.
Sun Zhiliang. Yanghuan Ling .2006. Enterprise groups outside of the internal audit strategy for the Group of Economic Research, 12:35.
 Liao Jianying .2006. Externalizing the internal audit of reverse thinking. Heilongjiang's foreign trade, eight eighty-six 87.
 Wang Xuelong .2002. On the outside of the limitations of internal audit. Accounting issue, 12:52 to 53.
 Na Zhao .2006. On internal audit outsourcing in the form of selection and analysis of accounting communications, 6:15 to 17.
 Hua Bi book. Marlee .2006. Internal audit outsourcing - Allocation of resources based on the audit, audit supervision, 10:27 ~ 28.
Links to free download http://eng.hi138.com