Internal auditing is?

Internal auditing has evolved over a long period of time, and different institutions and individuals have given much the same definition:

1. Sawyer, the father of internal auditing, defines internal auditing as an independent evaluation of the various types of operations and controls in an organization to determine whether generally accepted policies and procedures have been followed, whether they are in accordance with regulations and standards, whether resources have been used efficiently and economically, and whether they have been effective in achieving the organization's objectives. .

2. In the new version of the International Professional Practices Framework for Internal Auditing issued by the Institute of Internal Auditors (IIA) in January 2011, internal auditing is newly defined as: internal auditing is an independent, objective validation and consulting activity designed to add value and improve an organization's operations. It helps organizations achieve their objectives by applying a systematic and disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.

3. In June 2003, the Institute of Internal Auditors of China (IIA) issued the Internal Auditing Standards, which defines: "Internal auditing refers to an independent and objective monitoring and evaluation activity within an organization, which contributes to the achievement of the organization's objectives by reviewing and evaluating the appropriateness, legitimacy, and effectiveness of the operating activities and internal controls.

From these definitions, it is not difficult to find that internal auditing is a self-examination and self-control within the organization in order to improve the operation of the organization and achieve the organization's goals.

Secondly, the characteristics of internal auditing are as follows:

Firstly, the auditing organization and auditors are located within each unit.

Secondly, the content of the audit focuses more on the effectiveness of the business process and whether the systems are observed and implemented.

Third, the inward-looking and relatively independent nature of the service.

Fourth, the objectivity and impartiality of the audit results are low and are dominated by recommendatory opinions.

Third, the role of internal audit:

1, preventive and protective role. Internal audit bodies through the work of the accounting department in the supervision, help to strengthen the unit's internal management control system, timely detection of problems to correct errors, plug management loopholes, reduce losses, protect the safety and integrity of assets, and improve the truthfulness and reliability of accounting information.

2, service promotion. As a functional department within the enterprise, the internal audit organization is familiar with the production and operation activities of the enterprise and other circumstances, the work is convenient. Therefore, through the internal audit, the enterprise can improve management, tap the potential to reduce production costs, improve economic efficiency and play a positive role in promoting.

3, evaluation and forensics. Internal audit is based on the need for fiduciary economic responsibility and development, is the product of decentralized management. With the expansion of the scale of business units, management levels increase, the assessment and evaluation of business performance of various departments is an indispensable part of modern management. Through the internal audit, the activities of the departments can make objective and fair audit conclusions and opinions, play the role of evaluation and forensics.

Four, the content of internal audit:

The content of internal audit is very broad, according to the size of the enterprise, the structure and management of the requirements of the great differences, but summarized, mainly includes the following:

1, inspection, supervision and evaluation of the internal accounting control system, in particular, the soundness, appropriateness and effectiveness of the system of internal checks and balances, and to supervise its operation. and make recommendations for improvement.

2. To inspect, monitor and evaluate financial and operating information. This specifically includes measures used to recognize, measure, classify and report such information, as well as specific inquiries about certain items, including detailed testing of transactions, amounts and ranges;

3. Inspecting, monitoring and evaluating the economy, efficiency and effectiveness of economic activities, including non-financial controls of the enterprise;

4. Inspecting, monitoring and evaluating compliance with laws, regulations and other external requirements and compliance with management's policies, directives and other internal requirements.