Advantages and disadvantages of enterprise internal audit

Advantages and disadvantages of enterprise internal audit

In our daily study, work and life, we always come into contact with papers, which are articles for us to study a certain problem in depth. I believe many people will find it difficult to write a paper. The following are the advantages and disadvantages of enterprise internal audit that I have compiled, hoping to help everyone.

The risk-oriented internal audit mode requires that employees engaged in internal audit must be able to master and use various risk assessment methods and skills skillfully, and make professional judgments and assessments on the basis of solid professional knowledge.

abstract:

Risk-oriented internal audit mode is an internal audit method with risk as the starting point and core. In recent years, with the rapid development and expansion of economy, there have been many internal financial scandals, which have had a very bad impact on the development of enterprises, corporate image and the atmosphere and construction within the whole industry. Therefore, the risk-oriented internal audit model has attracted great attention of many large, medium and small enterprises in many countries. However, while the risk-oriented internal audit model has great advantages, it also has some disadvantages. This paper analyzes the advantages and disadvantages of risk-oriented internal audit in detail to provide reference for enterprise internal audit.

Key words:

Risk orientation; Enterprise management; Internal audit; Advantages; Disadvantaged

The rapid development of the global economy has led to the rise and rapid development of many enterprises in various industries. At the same time, there have been many large-scale financial scandals, which have had a very bad impact on the development of various industries and the construction of ethos, as well as the internal management and development of enterprises. Audit mode is a paradigm adopted in the internal audit work of enterprises, which is generally divided into two main modes: management-oriented and risk-oriented. The so-called audit mode orientation refers to a central idea that has always been around in the audit work process, which determines the starting point of the follow-up work. Among them, risk orientation, as its name implies, is an internal audit mode with enterprise management risk as its core and starting point. Since entering the era of knowledge economy, the risks faced by enterprises have increased sharply compared with the past. In order to achieve long-term and stable development, enterprises must make corresponding and timely adjustments to their internal management models. As a kind of enterprise internal audit mode, risk-oriented internal audit mode has many advantages and is paid more and more attention by countries all over the world. However, this model itself has some shortcomings and deficiencies, so enterprises need to pay more attention when applying this model to avoid losses to their image and property.

First, the advantages of risk-oriented internal audit model analysis

Except for the risk-oriented internal audit mode, other audit modes are collectively referred to as the traditional internal audit mode. Compared with the traditional internal audit mode, the risk-oriented internal audit mode has the following advantages:

1. has realized the fundamental transformation of the audit mode.

The biggest difference between the risk-oriented internal audit mode and the traditional internal audit mode is that the traditional internal audit mode is limited to the system audit level, while the risk-oriented internal audit mode is a basic audit mode under the background of modern knowledge economy. It is a more modern and advanced enterprise management mode and an important working method of internal audit.

2. The overall development of audit mode has been realized.

The traditional internal audit mode only audits the financial statements of enterprises, which has the shortcomings of single investigation and poor comprehensiveness. Risk-oriented internal audit mode takes factors such as the production and operation environment of enterprises into account. Only when the personnel engaged in audit work know the environment and operation of enterprises in detail can they evaluate the risks and complete the audit work. This model improves the internal system of enterprises and makes the audit model of enterprises more comprehensive.

3. Meet the needs of enterprise risk management.

With the rapid development of economic globalization, many enterprises in various industries are facing many problems, such as increasingly complex living environment, increasingly fierce competition and increasingly diversified risks (including process risk, business risk, capital acquisition risk, exchange rate and interest rate risk, etc.). ). These problems require enterprises to take risk management into account when conducting internal management. Risk-oriented internal audit mode came into being. The risk-oriented internal audit model meets the needs of risk management in enterprise internal management. The purpose of making audit plan and rationally allocating audit resources through risk assessment is extremely beneficial to the survival and development of enterprises in high-risk environment.

4. Improve audit efficiency.

The risk-oriented internal audit mode has higher audit efficiency than the traditional internal audit mode. When applying the risk-oriented internal audit model, auditors use the risk analysis results of audit projects as the selection criteria to determine the audit focus. This measure reduces unnecessary investment in risky projects, makes audit resources more reasonable and scientific, and achieves the purpose of saving enterprise costs.

5. Increase the enterprise value risk-oriented internal audit mode.

It takes risk as the core and starting point, changes the internal management mode of enterprises, formulates a set of the most scientific and reasonable audit scheme for various risks faced by enterprises, improves the internal management mode of enterprises and improves the operating efficiency of enterprises. Therefore, the risk-oriented internal audit mode can increase the value of enterprises more than the management-oriented audit mode.

6. Improve the internal audit work.

For a long time, the traditional internal audit mode has been adopted in enterprise internal audit, which can no longer meet the needs of enterprise development in the new period. For a long time, these audit models still use backward audit methods and skills, which can not achieve the purpose of evaluating and auditing business risks and increasing enterprise value. As a result, many enterprises now pay insufficient attention to internal audit, and many enterprises contract internal audit to external audit institutions in the form of outsourcing. Adopting risk-oriented internal audit mode can increase enterprise value, improve audit efficiency, provide more objective and comprehensive risk assessment and consulting services for the whole enterprise, help enterprises improve output value and improve internal management system, and will certainly enhance the attention paid to internal audit work within enterprises.

Second, the analysis of the disadvantages of risk-oriented internal audit model

Compared with the traditional internal audit mode, the risk-oriented internal audit mode has some shortcomings and deficiencies in addition to the above advantages, mainly in the following aspects:

1. limits the perspective of internal audit.

The risk-oriented internal audit model focuses on evaluating the risks faced by enterprises, which has both benefits and limitations. Paying attention to risks may limit the perspective of internal audit of enterprises, fail to achieve the goal of comprehensively examining the overall level of enterprises during internal audit, and greatly limit the scope of internal audit; In addition, although compared with the traditional internal audit mode, the risk-oriented internal audit mode focusing on risk points is still progressive, its mode and operation mode are still not perfect and need to be further improved.

There is a shortage of professionals in the industry, and the quality of employees needs to be further improved.

The risk-oriented internal audit mode requires that employees engaged in internal audit must be able to master and use various risk assessment methods and skills skillfully, and make professional judgments and assessments on the basis of solid professional knowledge. In addition, due to the nature of the work, the personnel engaged in internal audit should not only master the professional knowledge of auditing and risk assessment methods, but also dabble in and study the fields of law and accounting, understand the development trend of the big economic environment and the development and application of new technologies in this field, so as to make an objective and scientific assessment of risks. But as far as the current auditors are concerned, most of them are far from meeting this requirement. Basic problems include low academic level and single knowledge structure.

Among them, first of all, from the perspective of education, according to statistics, in China, about 19% of internal auditors have college education or above, while in some advanced countries in the world, this figure is 66%; In addition, about 9% of people have professional certification of internal audit, while in some advanced countries in the world, this figure is close to 70%, which is shocking.

From the perspective of knowledge structure, among the employees of internal audit in China, audit professionals account for more than 70% of the total number of employees, while professionals in economics, management and law only account for more than 10% of the total number of employees, and the rest are construction engineering professionals. These data show that the risk-oriented internal audit model requires high professional quality of employees, which is different from the current situation in China and there are many problems in its implementation. In addition, in order to cultivate and train talents, it will inevitably lead to an increase in investment in risk-oriented internal audit mode, which is also one of the disadvantages of risk-oriented internal audit mode.

Three. conclusion

With the acceleration of social and economic development and the rapid development of the global economy, many enterprises in various industries began to rise and develop rapidly. With the expansion of enterprise scale, there have been many financial scandals, which have had a very bad impact on the development and atmosphere of various industries, the internal management of enterprises and the development of enterprises. Especially since entering the era of knowledge economy, the risks faced by enterprises have increased sharply compared with the past. In order to achieve long-term and stable development, we must adjust the internal management mode. Risk-oriented internal audit mode, as an enterprise internal audit mode, has many advantages and has been paid more and more attention. However, there are several disadvantages in this model itself, and we need to pay more attention to it when applying it.

This paper expounds the advantages of the risk-oriented internal audit mode as an enterprise internal audit mode, including improving the audit efficiency, enhancing the enterprise value, changing the essence of the audit mode, realizing the all-round development of the audit mode, meeting the needs of enterprise risk management, and increasing the attention of enterprises to the internal audit work, etc. Then it describes the disadvantages of the risk-oriented internal audit model as an enterprise internal audit model, including limiting the internal audit perspective and the requirements for the quality of internal auditors. The advantages and disadvantages of risk-oriented internal audit mode are expounded and analyzed in detail one by one, which has certain reference and reference function for enterprise internal audit.

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