Insurance industry is business on risk, the life insurance company also facing the huge risk in conduct process any time because of undertaking the responsibility of long-term funds benefit, the operation of a huge sum of funds. For such a company that takes risk as the conduct object, guarding and controlling ability of the risk is the main factor foe company to obtain the public trust, take long-term and steady business. Therefore, the life insurance company even should value the usefulness and perfecting of the internal control system, having the necessity to depend on the forerunner and scientific the internal audit system against the risk. This paper puts forward some advice on problems of the current internal audit system of the life insurance company on foundation of analyzing the aim and the function of the internal audit system of the life insurance company.
Keywords: life insurance companies；internal audit；internal control system
(A) accounting systems
As financial institutions, life insurance companies track business operation is a lot of currency transactions and mass movement of funds. Save numerous accounting system of the trading path became the focus of internal audit and the primary audit object. Before the audit, you must first determine what kind of company accounting system to provide signs, such as coding, cross indexing or connection account balance with written information for the original transaction data. Life insurance company currently trading track may be applied more generally in policy-based, with a policy number to string all transactions associated with them. Work of the Tribunal officers if found in the accounting system to provide track does not meet the audit requirements, accounting and other related departments should be assisted to improve it. With the rise of customer financial management, according to the policy trajectory has failed to complete and clear distinction between transactions reflect customers contact the company’s financial, trading based on specific customer accounting system of the future direction of trajectory is a life insurance company.
(B) business practice for
Day-to-day operations of the business practice for life insurance company is a custom system and provisions, is a company operating guidance document, bringing together the company’s many years of experience and lessons learned. Reasonable business rules must be based on compliance with regulatory requirements and market requirements of the business. Life insurance company because the business is a long-term business, often the validity of an insurance contract for dozens of years. Thus typically occurs within the company at the same time there are multiple different versions of business processes in the job, depending on the operation object to determine which process to use. Internal audit personnel must be aware of this. In General, the same applies business rules for insurance contracts should be stable and consistent, but also cannot be generalized. When it finds a business when there are systematic or widespread problems, it should review procedures should be improved.
(C) operation record
Operation record refers to the life insurance business operations and save documents, vouchers and used in the worksheet, is written track of business processes. Through its audit, internal audit personnel to recover the actual business operation, and may make the corresponding evaluation. Due to the extensive application of information technology in the life insurance industry, operation record is changed from traditional paper format to electronic format. Efficacy, safety of operation records in electronic format and level of acceptable, has increasingly become a Tribunal required special attention in the content, becoming an important aspect of modern life insurance company’s internal audit.
Second, the function of internal audit in corporate governance risks, control of life insurance
After China joins the WTO, more life insurance market highlights the characteristics of the characteristics of a market economy and fair competition, it entails new life insurance company in accordance with market rules to speed up institutional reform, promote scientific management, to benefit operation. Internal audit function of inspection, identification, evaluation, and construction of these played a role in other audit oversight bodies were difficult to achieve.
(A) the internal audit has a direct role in prevent insurance risks
Life insurance is a business risk and special industry, life insurance is a risk transfer mechanism, whose basic function is to provide protection. With the advent of the information age, increasingly diversified and complex external environmental risk factors, identify, measure, manage new risk becomes the external environment for new demand for life insurance companies. The other hand, many life insurance companies are far from out of the extensive management strategy, nuclear insurance indemnity is not strict enough, scientific, financial and capital operation is not in accordance with the legal requirements, these are not adapted to the requirements of the WTO to business brought more life insurance company, the greater the risk. Life insurance company to ensure reasonable living and effective development in the new environment, preventing risks is important.
Internal audit in prevention risk aspects of role performance in, a is internal audit through check the business activities of legitimacy and the hop Board sexual, timely found deviated from regulations and supervision measures of problem, guarantee business operating activities in regulations and supervision measures allows range within for, reduce business operating risk; II is internal audit through evaluation life insurance company of internal control system, and management system, and various articles of rationality, and complete sexual and validity, find which of management defects and control weaknesses, prevention because lack control and produced of risk; three is internal audit through on financial data for daily monitoring, timely found strange situation, prevent financial risk.
(B) internal audit role in the improvement of the life insurance company on the management level with support
Life insurance companies, internal audits play a familiar feature of business links, stand in the position of the independent, objective, in front of the planning, decision making, analysis and assessment of programme feasibility, reasonableness, and early in the implementation of plans and decisions, for investigation, discover problems in implementation, feedback to decision-makers, amendments to planning, decision-making, and provide a basis for improvement. Internal audit also can assist managers to identify a branch of the Attorney (responsible person) should take economic responsibility (such as business, profit indicators, and so on) completing the quantity and quality and ensure the effective allocation of resources.
Upgrade the management level, the aim is to enhance economic efficiency. Life insurance company internal audit through financial audit, and statistics audit, and economic activities full process audit, project, find management Shang of problem, and and was audit object common analysis errors and problem of actual and the potential of effect, mining management potential, find human, and material, and financial most reasonable of using way, acts as a operating management personnel strengthening internal control, and perfect operating management, and completed by negative economic responsibility of staff and Assistant, assist leadership improve economic management activities of efficiency, and effect and economic sexual.
(C) on the reform of the internal audit in asset restructuring, with the escort role
Insurance market competition after entry into WTO is also a life insurance company capital strength contest. Under pressure from the progressive liberalization of the insurance industry, many life insurance companies to expand capital strength as one of the strategic measures to improve the core competitiveness, frequent contacts with international insurance Consortium and the “marriage”. While the State-owned life insurance companies to adapt to market developments, trying to seek a breakthrough time of existing management system, take the road of joint-stock system reform and listing management. Assets of the insurance industry will soon become a common phenomenon, increasingly important tasks of the preservation of the assets of shareholders when needed reforms, development of internal audit for life insurance companies.
In the process of reorganization of assets, monitor assets security, integrity is particularly important. Prior involvement of the internal audit, can thoroughly verify your assets in the account, verify the authenticity of the asset, while or outside qingzhang quantity and value of the assets, strict management, prevent loss of assets outside of the account in the restructuring process. And internal audit process involved, you can stop the extravagance and waste, reduce the cost of restructuring.
In addition, the enterprise after restructuring, will involve some promotion and appointment of managers, on the implementation of economic responsibility auditing, with managers responsible and accountable to the shareholders of principles, identify the business condition, financial situation and assets appreciation, we can ensure the efficient use of resources, assets security and compliance, responsible for the protection of the legitimate rights and interests.
Third, the problems in the life insurance company’s internal audit
As life insurance companies operating in China: establishment, significantly strengthening internal audit, to guard against managing risk, incident prevention, legal compliance management plays a great role. However, in practice, due to the failure of some life insurance companies internal audit work as fundamental and important means of management attention, cause there are some weaknesses in the internal audit, the company’s management has been restricted.
(A) insufficient rights and independence of internal audit
Independence of internal audit bodies in form and in substance, impact on internal audit work is enormous. Closed chain lies in its independence of the audit work intensity, size, independence of the audit determines the scope of its functions and effects. Heads of most life insurance companies in China have no direct leadership or special attention to the work of the internal audit unit, up to an Executive Vice President in charge of auditing work. And the internal audit department is responsible on the Board and not the Manager, internal audit departments can not execute under interference in the management of delegated tasks, can freely report audit findings and evaluations, not subject to interference in the management of, and internal communications.
(B) audit concept behind, biased and supervision after the financial supervision
A long time, the life insurance company’s internal audit focused mainly on financial audit on the review, most of the focus to the verification of the authenticity and legality of financial data; primary function is the error-checking analysis on prevention rather than on business management, evaluation and management recommendations. Financial accounts audit cannot be on the company’s management and internal controls and risks in decision making for effective monitoring, cannot increase company value, role of helping management achieve goals. Supervision after serious delays, cannot adapt to the needs of healthy and sound development of the company. Supervision after the verification is formed on the risk of loss, even if the monitoring and effective, the company also suffered major losses in most cases is irreparable.
(C) the audit approach and audit technology
Currently many life insurance company of internal audit basically is accounts Foundation audit, to all business and accounts for Foundation, main used more audit or rely on Yu audit who personal experience judgment of sampling audit method, and not international Shang advanced of passage of risk Foundation audit, this on makes internal audit randomness is large, lack scientific, audit of content full with audit personnel of experience judgment, caused audit period long, and audit cost commercial, and audit efficiency low.
(D) weakness of internal audit, oversight capacity is limited
Life insurance company’s prevailing weakness of internal audit, leading audit discontinuous, narrow and long interval time of the audit, unable to discover and expose problems and risks of life insurance company business activities, weakening the oversight role of audit. Integrated internal audit personnel quality is not high on the one hand, business is not strong cannot meet the needs of tasks completed internal audit under new situation; on the other hand has no defined employment criteria and assessment mechanisms, internal audit staff requirements is not clear, mobility is more random, and difficult to maintain quality of the internal audit team.
Four life insurance company, strengthening of the internal audit strategy
Internal audit is a product of further perfecting modern enterprise system, it roots in the enterprise, familiar with the operation and management of the enterprises where conditions and each operation, external audit, its area of work even greater, richer, more diverse, the effect is more apparent. For life insurance company, a risk, but also to continuously improve the company’s internal audit.
(A) establish a system to meet business needs of the internal audit
Sound and regulate the system of internal audit is an audit work a strong support of the progress and implementation of specific measures. Building a system of internal audit is required to guarantee the effective expansion of internal audit. These systems to include audit policies, of the Charter of the audit, audit management, and technical and methodological aspects of the provisions of the various project items such as audit specification.
(B) the reorientation of the auditing Department
One of the trends of modern internal audit is to maintain the independence of the Audit Department, making it separate to take your board or the Audit Committee, and to maintain effective communication with the management, under separate management set the auditing Department, responsible to the management, in order to facilitate their independent monitoring function of.
(C) establishing a monitoring, evaluation, and recommends that the audit function of integration system
Will supervision harbour a management among, implementation internal audit from supervision type to service type of change, and from dispersed management to concentrated management of change, and from experience oriented to risk oriented change, and engaged in Hou audit to thing in the prior audit of change, and from static evaluation to dynamic evaluation of change, and from single angle concern to more angle concern change, and from was audit units passive accept audit to active participation audit change, and from to economic responsibility audit for gravity to full audit change, and audit personnel from single knowledge structure to composite knowledge structure change, and from recalled history to look future of change.
(D) to promote the company established a complete set of internal control evaluation system
Complete evaluation of internal control system is a prerequisite for to really implement the reform of Auditors. Established internal control evaluation system, a is through on company internal control for diagnosis, find corresponding of risk point, II is depicting out company system tree shaped and units matrix internal control flowchart, for prepared internal control manual, and internal control audit guide do prepared, three is under levels company operations of status carried out management thesis, to improve accounting data of authenticity, and accuracy and integrity, improve system levels company of management level.
(E) construction of a high-quality internal audit team
Building a high-quality internal audit team are important organizational guarantee of internal audit work to progress. Modern business requires that the internal auditor should be expert in one of the compound-type talents. Auditing requires more than finance experts and information system audit specialist accounting experts, financial regulations, and so on. Audit staff must have sufficient to carry out its task of accounting, economics, management science, law and computer knowledge of necessary knowledge, skills and expertise, and with an independent collection, analysis, evaluation, and the ability to record information. To accomplish this goal, first of all to establish a scientific and practical training mechanisms. One is to strengthen the adaptability to new recruitment, on-the-job staff training. Second, strengthen training for in-service personnel audit and update knowledge and specialized business training under special work to be done. Secondly, actively bring in talent from outside the company. Finally, establish internal mechanisms for the Exchange, attract other Department personnel to audit departmental learning exercises.