The role of internal audit on company performance

Abstract

This paper research whether there is the relationship between internal audit and company performance in China or not. In order to better explore the relationships and for accuracy, the empirical result uses a sample with 987 companies, 8782 observations and 9-year period which is from 2007 to 2015. The results of regression is identical to one of my hypothesis according to the literature review. The results show that there is significant and positive relationship between internal audit and company performance. Although people may believe that larger internal audit size may add burden to companies and make companies earn less net income, the regression results suggest that companies should have large size audit cause larger size audit make company more effectively and make more profit. The internal audit play an extremely important in company performance.