Research On Audit Of Listed Companies' Internal Control

Robust and effective internal controls are crucial for the efficiency and performance of corporation operation, the reliability of financial statements and the compliance with relevant laws and regulations. However, Enron and a series of astonishing financial fraud cases, which broke out in the United States in the early twentieth century, caused a tremendous commotion in the worldwide capital markets. One of the fundamental reasons is the deficiency of internal controls. On the purposes of rectifying the order of capital market and rebuilding public confidence in capital markets, Unite States enacted "Sarbanes-Oxley Act" in 2002. It is required that management section should disclose the assessment of internal control over financial reporting along with the periodic reports. Meanwhile, the Act requires that the internal control be audited by registered CPA. The audit of internal control here means auditing procedure carried out by the registered CPA on internal control, auditing the validity of internal controls on specific dates and issuing their audit opinion. In 2008 China also issued "The Basic Norms of Corporation Internal Control" by five ministries, which indicates that China will soon start this service. Audit of internal control will produce far-reaching impact on improving the information quality of the financial report, which is also the significance of this paper.Based on comprehensive literature review and theoretical analysis, this paper takes three years'consecutive annual report of 60 listed companies as the subject, and studies the published reports of internal control audit. However, there are only a limited number of listed companies to publish internal control audit reports, and the objections to audit the financial and internal control reports are the same accounting firms, as the same to integrated auditing. Following the"Auditing Standard of Enterprise Internal Control"carried out, integrated auditing will play an important roll to the internal control audit.With the comparison between internal control auditing and financial statement auditing, this paper tries to propose more suggestions about the integration of auditing purpose, auditing plan and auditing procedure. Hope this study of integrated auditing could do good to auditing work of registered CPA, and the fairness of our capital market circumstance as well.