Importance of internal audit and "A case of Toshiba"

Abstract

The energy giant enron up on the securities and exchange commission quarterly financial reporting fraud, after several world famous big companies such as worldcom, xerox, global communications have appeared, such as financial fraud case in China, abandonment, yili executive arrested, everbright securities crimes such as corruption in succession, this a series of scandals caused the industry high attention.All these scandals have exposed the problem: the failure of internal audit accounting will eventually lead to fraud and even bankruptcy of a company with a weak constraint mechanism. Therefore, many scholars study the importance of internal audit from different perspectives, and it has been a consensus in the industry to improve the importance of internal audit in organizations. However, what kind of internal audit is effective, in order to improve the importance of internal audit, internal audit institutions should have what kind of characteristics, these issues become the research motivation of this paper. Only by establishing double internal audit institutions and scientific and compliant operation mode can internal audit institutions carry out their work smoothly and give full play to their due functions. Only by understanding the impact of the characteristics of internal audit institutions on internal audit, can we reasonably set up internal audit institutions, so as to improve the authority of internal audit. Based on internal auditing, corporate governance theory as the foundation, such as selection of Toshiba case as sample, from the size of the internal audit institutions, set up internal audit system, internal audit staff of professional competence, the area of responsibility of the internal audit institutions and internal audit machine enough diligence this five aspects, analyzing the characteristic of the internal audit institutions choose target of financial report, internal audit, management goal and to achieve the goal of the legal compliance of three aspects to measure the importance of internal audit, through the theoretical study and case analysis method to study the influence of the characteristics of internal audit internal audit institutions. 4 The results show that :Control activities. Control activities are based on the risk assessment results of the enterprise, the use of appropriate control measures to control the risk within tolerable.The size of internal audit institutions has a positive impact on internal audit, but the effect is not obvious.The establishment of internal audit system has a positive impact on internal audit.The professional competence of internal audit personnel has a positive impact on internal audit.The wider the scope of responsibility of internal audit institutions, the higher the role of internal audit.The influence of diligence of internal audit institutions on internal audit is not significant and the direction is not clear.Reasonable establishment of internal audit institutions plays a key role in improving the status of internal audit. Chinese enterprises can take the following measures: equip sufficient internal audit personnel, improve the comprehensive quality of internal audit personnel, improve the internal audit system of the company, expand the functional scope of internal audit institutions, and establish the evaluation mechanism for the performance of audit committee.