When Internal Control Meets Internal Audit: Conflict or Combine?

Jingwen Nie

doi:10.4236/ojacct.2017.62004

Abstract

The long-term development of enterprises not only need the escort of internal control, but also can’t do without the monitoring and early warning of internal audit. The relationship between internal control and internal audit is simple and mysterious. When the company internal control meets internal audit, is there conflict brings a lose-lose situation or combination brings a win-win complexion? This article explored the internal control and internal audit of China International Marine Containers (Group) Ltd. (CIMC), and found that the combination of the two makes CIMC steady and quickly develop, and it finally becomes a world-class enterprise.

Highlights

The five ministries including finance issued “enterprise internal control the supporting guidelines” in April 2010, and pointed out that the construction of internal control is an important foundation for the development of enterprises
Nie 44 scholars think internal control and internal audit fall into a vicious cycle of mutual inhibition
There is a mutual promotion of internal audit, internal control reform can bring the change of internal audit and internal audit effectiveness inspection of internal control, the two work together to protect the enterprise healthy and rapid operation [8]

Summary

Introduction

The five ministries including finance issued “enterprise internal control the supporting guidelines” in April 2010, and pointed out that the construction of internal control is an important foundation for the development of enterprises. In August 2013, the China Institute of Internal Audit promulgated the new internal audit standards, which fits into the international practice and improves the applicability and operability of the guidelines. Internal audit and internal control is closely related, internal audit tests the effectiveness of internal control and puts forward the corresponding amendments to improve the internal control to create value for the company [7]. There is a mutual promotion of internal audit, internal control reform can bring the change of internal audit and internal audit effectiveness inspection of internal control, the two work together to protect the enterprise healthy and rapid operation [8]. CIMC as an example, in-depth researched that in practice field the relationship between internal control and internal audit is inhibition or fusion, and enrich the academic research of internal control and internal audit

The Synopsis of CIMC

The Development of Internal Control and Internal Audit

Analysis from the Development

Analysis from Relevant Organization Structure of CIMC

Findings

Conclusions and Implications