First, the necessity of internal audit of project cost
The latest definition of internal audit by International Institute of Internal Auditors (IIA) is: "Internal audit is an independent and objective assurance and consulting activity, the purpose of which is to add value to institutions and improve their operational efficiency. It adopts a systematic and standardized method to evaluate risk management, control and governance procedures, improve efficiency and help achieve various economic indicators. " According to this definition, the internal audit of project cost can be understood as that the management establishes the corresponding internal audit department in the process of construction project, and the auditors of the internal audit department implement the corresponding audit procedures for project cost management while observing professional ethics, maintaining professional suspicion and relative independence. This will help to reduce the project cost, increase profits and improve the economic benefits of the project. The necessity of internal audit for project cost management is reflected in the following three aspects: First, the internal audit of project cost is conducive to standardizing the bidding and construction process of enterprises. Bidding and construction stage are the key links of project cost management, and fierce competition can easily lead to random quotation and Jerry-building. Auditors audit the bidding and construction links through strict auditing means to improve the project interests and ensure the construction quality. Second, the internal audit of project cost is beneficial for the internal audit department to audit the whole construction project. Project cost is the focus of construction project management, and strict control of cost can reduce the economic risk of the whole project. Thirdly, the internal audit of project cost is conducive to improving the awareness of cost management of enterprises. Establishing a scientific and reasonable cost management mechanism can improve the economic benefits of the project, subtly strengthen employees' awareness of cost management in the process of full participation in cost management, and promote the sustainable development of enterprises.
Second, the problems existing in the internal audit of project cost
Carrying out internal audit of project cost is conducive to strengthening project cost management of units or enterprises, enhancing employees' awareness of cost management, effectively reducing project costs, avoiding waste of investment funds, and also helping internal audit departments to broaden their business scope and enhance audit level and internal audit value. Although many units have implemented the internal audit of project cost, some have formulated very detailed audit criteria and rules and regulations, and even implemented the whole process tracking audit in the internal audit of project cost, there are still units or enterprises that do not attach importance to the internal audit of project cost and turn a deaf ear to its important role, making it difficult to carry out the internal audit of project cost. The following is a brief talk about several problems existing in the internal audit of project cost in China and my personal views.
(A) the awareness of cost management is weak, and the concept of internal audit is backward
1. The management of the enterprise pays insufficient attention to the internal audit of project cost, and the sloppy attitude also affects the working mentality of internal auditors, which leads to the original rigorous internal audit of project cost becoming a mere formality. Under the situation of a large number of construction projects in China, domestic construction enterprises are facing many enormous challenges in the fierce competitive environment, which will inevitably stimulate some enterprises to value interests over management. Generally speaking, the sustainable development of enterprises can not be separated from the scientific and effective cost management implemented by management, and also from the follow-up support of management and employees for cost management. Therefore, as an effective means of enterprise project cost management, internal audit can not only play the role of supervision and guidance, but also help to maximize the interests of the project, which requires the strong support of management and all employees. If all employees can realize the importance of project cost management, establish the consciousness of full participation, and no longer only pay attention to the construction progress of the project, it will promote the sustainable and healthy development of the enterprise. 2. Enterprises have misunderstandings about the internal audit of project cost. Generally speaking, most enterprises regard the internal audit department of project cost as an internal supervision and evaluation institution, and think that its function is only to check errors and prevent leakage. This concept is incorrect. The internal audit of project cost is not only an economic management activity of project cost, but also an indispensable part of the internal control system of enterprise project cost management. The development of cost internal audit is directly related to the smooth development of internal control of project cost, which needs to be understood with broader and deeper thinking.
(B) the lack of independence and authority of internal audit
Internal auditors need to maintain a high degree of independence from other functional departments of the enterprise in order to complete the internal audit work. It is precisely because it is difficult to maintain a high degree of independence that the internal audit work is struggling. As a risk management department, if the internal audit department is restricted in the audit process, whether from the audit content, hierarchical affiliation, audit authority or working environment, it will weaken the risk early warning function of internal audit. For a long time, the organizational structure of internal audit of engineering cost in Chinese enterprises has been chaotic, and internal auditors have even taken up positions in management departments to carry out relevant bidding and quotation work, which has greatly affected the independence of internal audit work and greatly reduced the effectiveness of internal audit. The purpose of internal audit is to optimize the project cost and implement the cost management system in all aspects. However, due to the imperfect assessment system of enterprises, it is impossible to establish a perfect assessment mechanism and mobilize the enthusiasm of employees to the maximum extent. In some units, the assessment is not comprehensive, the distinction between rewards and punishments is not thorough, and the performance appraisal is not linked to the work department, personal performance and income, which makes the internal auditors work passively, turn a blind eye to some mistakes, and end the audit work by giving general evaluation opinions. The internal audit department cannot establish the authority of audit, and other functional departments of the audited unit often do not actively treat the work needs of the internal audit department, which further weakens the authority of the internal audit department.
(C) The uneven quality of project files increases the difficulty of internal audit.
To carry out the internal audit of project cost, we must first predict the labor, materials and expenses, then analyze whether there are risk factors that will change the construction cost in the construction scheme, and finally predict the auxiliary project cost, so as to finally determine the cost control target. The above prediction is inseparable from the detailed analysis of project construction data, but it is difficult for internal auditors to collect complete project data. From project initiation to completion acceptance, relevant files should be established, filed and sorted out. These materials are written and graphic records formed in the process of project construction, a true reflection of the project construction progress, and an important basis for the future expansion and reconstruction of the project. If these data are used properly and reasonably, it can avoid wasting time, time and expenses in the project, improve the construction efficiency of the project and increase the project income. However, most domestic units pay too much attention to the benefits of engineering projects and neglect the scientific management of archives. The employees who file and organize archives do not have the corresponding professional quality, which leads to uneven quality of archives and even the loss of archives. Internal auditors mainly face the following three difficulties: First, it is difficult to collect data. Many units did not collect files in time at the beginning of project construction, and the units that contracted, subcontracted, constructed, surveyed and designed projects were different. Under the influence of many factors such as long construction period, many departments and inconsistent progress, it is difficult for internal auditors to collect complete files. Second, internal auditors have collected relevant information, but the quality of drawings is very low. There will inevitably be a large number of drawings in the project, which come from the owner, constructor, survey and design party, etc. Moreover, the personnel, basis and specifications of these drawings are different, resulting in uneven information quality of drawings. The preservation environment of a large number of drawings and materials can not meet the requirements, which leads to wear and tear, blurred handwriting and so on in the process of repeated reference, and even the original materials are lost with only copies. Third, the professional quality of archivists is not enough, and the filing procedures are not standardized. Because the unit does not pay enough attention to the archiving of engineering files, the archiving staff do not have professional knowledge of engineering construction and have a sloppy attitude towards data collation. They don't sort out the data according to the date, schedule, unit and other conditions, but simply bind them, and the content is chaotic, which reduces the integrity and rigor of the files.
(d) Internal auditors are of low quality and lack of professional judgment.
The internal audit of project cost is a highly technical and professional work, which requires internal auditors not only to master the professional knowledge and audit methods related to project construction, but also to have the corresponding professional judgment ability. However, at present, the internal audit departments of most domestic units are short of comprehensive talents, with simple knowledge structure and low quality, which cannot guarantee the audit quality. The unit leaders do not attach importance to the internal audit department, but only transfer idle personnel to the internal audit unit in a formalistic manner, or randomly transfer internal audit personnel from financial accounting positions. These half-way monks have no professional knowledge of engineering construction and have no in-depth understanding of the whole project, so naturally they can't analyze all aspects of internal audit from the macro level. Secondly, the number of internal auditors of unit project cost is insufficient, and the audit of project cost cannot be effectively completed. Originally, the professional knowledge of internal auditors was not enough to deal with the complicated internal audit of project cost, and the lack of internal auditors greatly reduced the internal audit effect. Finally, due to the above factors, internal auditors cannot fully master the professional skills required for auditing, and internal auditors will also lack the ability of professional judgment, which will inevitably delay the progress and effect of auditing.
Third, the improvement of internal audit of engineering projects.
(A) strengthen the awareness of cost management, update the concept of cost internal audit, and improve the internal control of project cost.
A sustainable project construction is inseparable from scientific and effective cost management, which will directly affect the economic benefits of the project, and the improvement of economic benefits can also promote more efficient cost management. The cost management of engineering projects can be roughly divided into three parts, namely, pre-management, in-process management and post-management. The pre-management system includes the cost management in the project establishment stage, budget estimation stage and bidding and contracting stage, while the in-process management mainly includes the cost management in the construction stage, and the post-event management includes the cost management in the acceptance and final accounts stage. Defects in the cost management system of any of these three parts will lead to the cost management of the whole project out of control, which will make it difficult for the internal audit to proceed smoothly. In addition, the cost management of engineering projects is not only the work of leaders or a department, but also the participation of all employees. Strengthening the cost management of engineering construction requires the participation of all staff. Therefore, employees should strengthen the awareness of project cost management, and realize the importance of cost management to the unit, the project and themselves from a far-reaching macro level, so that cost management can achieve outstanding results. Secondly, the unit needs to improve the internal control mechanism of project cost to fully ensure that the project cost is within the controllable range. First of all, we should establish and improve the organizational structure. If the project cost management is not out of control in the whole construction process, it is necessary to establish a corresponding cost control system, headed by the project manager. Establish an internal control mechanism of responsibility cost and perform their duties. Everyone should be clear about their responsibilities and work contents in cost management. Second, we should establish a mutual supervision mechanism. Internal audit has the function of supervision and evaluation, and should also be supervised by other departments and staff. While formulating detailed rules at all levels, it is necessary to ensure the openness and transparency of external information of all departments in order to achieve the purpose of mutual restriction and promotion. Only in this way can the internal control of the project be implemented in all aspects and the internal audit of the cost be done well.
(b) Establish an audit committee to strengthen the independence of internal audit.
The organizational structure of internal audit of domestic engineering project cost is not mature, so we can learn from the organizational structure of internal audit of foreign or other domestic industries and apply it to internal audit of cost to enhance the independence of audit. On the basis of absorbing a lot of foreign experience, according to the basic situation of engineering project construction, the organizational structure in line with the actual situation is formulated to fundamentally improve the independence of the internal audit department. As a risk management department, the internal audit department is subordinate to the management of the unit. Regarding the communication between management and internal audit department, a special audit committee can be set up as a bridge between them. For management, the problem of authoritarian power can be avoided; For the internal audit department, the audit content can be effectively communicated with the management in a timely manner. At the same time, the audit committee can supervise the internal audit department, which reduces the possibility that the internal audit department is restricted in terms of audit content, hierarchical membership, audit authority or working environment, and improves the independence of internal audit. In addition, we can establish a perfect assessment mechanism, with clear rewards and punishments, unified responsibilities and rights, and mobilize the enthusiasm of employees. This means that establishing and perfecting the responsibility system of project cost is the ultimate trend of internal audit of project cost, combining the interests of employees with project construction, strengthening the awareness of cost management in other departments of the unit, and making all employees aware of the rigor, authority and superiority of internal audit of project cost. Establishing the authority of internal audit department is helpful to cost management and maximize the benefit of engineering project construction.
(C) the establishment of a file system, strictly abide by internal audit procedures.
First of all, we should establish a project file system. Units should attach importance to the custody of archives, employ professional archivists, and actively carry out the filing and sorting of archives. This is not only beneficial to the audit work of internal auditors of project cost, but also can save manpower, time and expenses in the audit process and avoid the waste of manpower, material resources and financial resources. At the beginning of the project construction, the unit should formulate the filing requirements and rules of the file box drawings, and establish the corresponding reward and punishment system, so as to classify and file in time, reduce the risk of data loss and fuzzy information, and provide a strong guarantee for the internal audit of the project cost from the filing system. Secondly, it is necessary to improve the internal audit rules and regulations of project cost. Internal audit institutions of project cost include financial department, audit department and supervision department. To improve the quality of internal audit, we must establish a strict internal audit system. Combined with the specific situation of engineering construction, improve the internal control system from project establishment, project contracting to project budget and final accounts, ensure mutual supervision and restriction among departments, and only after auditing can the project be settled, laying the foundation for the internal audit of engineering cost. Finally, we must strictly abide by the internal audit procedures. The internal auditors of project cost should strictly implement the corresponding internal audit procedures to avoid unnecessary mistakes and finally achieve the purpose of internal audit of project cost. In the process of auditing, internal auditors should maintain professional judgment, determine audit objectives, evaluate audit risks, formulate audit plans, implement substantive audit procedures, enhance their sense of responsibility and maintain necessary independence, resolutely put an end to abuse of power, dereliction of duty and abuse of power for personal gain, and improve the quality of internal audit of project cost.
(4) Improve the professional quality of internal auditors and establish a training mechanism.
The internal audit of engineering project cost requires auditors to master the knowledge of engineering construction and fine skills, and needs a high theoretical level and comprehensive professional knowledge as the support to complete the professional and rigorous internal audit of cost. Internal auditors are the main body of internal audit of project cost. To improve the professional quality of internal auditors, it is necessary to strengthen the professional knowledge and skills training of internal auditors and other financial personnel, require employees to master professional skills and maintain good professional quality, and implement the cost internal audit work, so as to effectively achieve the goal of effective control of project cost management. Secondly, we should strictly control the entry threshold of internal auditors, put an end to the phenomenon of random transfer and becoming a monk halfway, and ensure the professional competence of internal auditors. If the professional quality of internal auditors is not up to standard, they can also actively introduce high-level and experienced high-end talents who are proficient in accounting knowledge and engineering technology from outside. Although it will increase the construction cost, it can bring more construction benefits through effective cost control. Staff exchange meetings can also be held regularly, so that internal auditors and employees of other departments can communicate with each other, deepen their understanding, and further understand the construction objectives, plans and construction process of the project, so that employees can learn from each other's strong points and improve their comprehensive quality. When the comprehensive quality of employees is improved in an all-round way and faced with numerous temptations in the working environment, high-quality auditors can stick to themselves and resolutely refuse to ensure the authenticity and professionalism of the audit.
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