Research On The Level Of Internal Audit Of Listed Companies On The Quality Of Financial Reporting

As an important part of company management, internal audit has drawn more and more people’s attention. At first, internal audit, as the company’s watchdog agency, has a deep understanding on the companies’internal control and business activities. Therefore, it should play a positive role in ensuring the real and reliable financial information. Secondly, take the supervision on the quality of the financial report into account:it contains internal supervision and external supervision. CSRC (China Securities Regulatory Commission), CBRC(China Banking Regulatory Commission) and so on implement the external quality supervision; The board of directors, the board of supervisors and the internal audit make the internal supervision on the financial report. Meanwhile, the internal audit also can sustain the mutual containment of relationship between the company management and the executive layer, prevent and correct false financial statements, so internal audit play an important role in the ascension of internal control efficiency effect and making the financial report real or reliable. The relevant research on internal audit has obtained a certain achievement, but also lack of system, or further research.This research mainly to the accountability theory and information theory as the theoretical basis, with the internal auditing department’s membership, the relevant laws and regulations, whether regular report or not as the alternative variables of the internal audit level, annual patch and the level of earnings management as the quality of financial reporting alternative variable, use the data of2008-2010for the listed company as sample, using multiple regression model, have inspected the relationship of the internal audit between the quality of financial reporting. The empirical results show that the enterprise’s financial reports which set up the internal auditing department is better than that didn’t set up. Furthermore, in the internal audit department has been established in the enterprise. The level of the internal audit and the quality of the enterprise financial report t is closely positive related. For this reason, this paper puts forward3suggestions about improving the level of internal audit. That is, establish and perfect the mechanism of internal auditing; give full play to the role of internal audit; build security system of the internal audit.That is the innovation of the research:whether regular report or not as one of the alternative variable when think about the level of the internal audit; comprehensive consider annual report patch and earning management as the alternative variables of the quality of the financial report.