The thesis determines the impact of government’s internal audit process and methods on the adoption of audit In keeping with the liberalization of gaming following the Handover of Macao, the gaming industry has created “record highs” in terms of the industrial structure, the fiscal revenue to the government of Macao. Whether economically, politically or strategically, it is vital to facilitate the diversification of Macao’s economic development. According to successive Policy Addresses of the Government of Macao SAR, the administration has placed an increasingly heavy emphasis on the diversification of Macao’s economic development and industrial structure since 2002. Benefiting from tens of millions of visitors arrivals every year, annual retail sales have risen from MOP22,354 million in 2009 to MOP52,853 million in 2012. Thus, it may be inferred that the demand or need for logistics service has increased dramatically. In this thesis, we primarily analyze the development of Macao's logistics industry by means of SWOT. On the other hand, Porter's Diamond Model reveals that the government plays a pivotal role in its function as catalyst and challenger. The aspirations and competitive behavior of company are to a great extent subject to government. In 2011, the Government of Macao SAR formed the “Committee for the Development of the Logistics Industry” (CDSL), which may be identified as the MAIN vehicle in driving this economic activity. Despite the overwhelming dominance of the gaming industry, several industries, apart from tourism industry, are well qualified to promote economic diversification. We analyze the relationship between these industries, including the logistics industry. In tandem with this analysis, we study the role of Macao logistics industry in facilitating the diversification of Macao's economic development.