The Relation Of The Listed Company Internal Control Defects And The Audit Opinion

In2001and2002, the United States of enron and worldcom financial fraud incidents shockedthe international capital markets. Then, in July2002, the United States launched the sarbanes-oxley act (hereinafter referred to as the SOX act), which made a strict disclosure requirement aboutthe internal control of listed companies. Subsequently, the public company accounting oversightboard (PCAOB) was to define internal control defects and the internal control auditing standardsand regulations. So, the internal control information disclosure in the United States had entered thephase of mandatory disclosure. In our country, the development of internal control disclosure ofinformation is relatively late. In2000, the second revision of the "accounting law" for the first timelauched the law on the internal control; On June28,2008, the Securities RegulatoryCommission,the Ministry of Finance, Audit, the China Banking Regulatory Commission, and theChina Insurance Regulatory Commission jointly issued the "enterprise internal control basic norms",further on the construction of internal control standard; On April26,2010, five ministries issued afurther application of three supporting guidances,"enterprise internal control guidelines ","enterprise internal control evaluation guidelines" and "enterprise internal control audit guidelines",which suggests that the basic internal control standard system in our country has been built. As tothe attention of the internal control gradually improves, more and more financial statement userswant to see internal control information disclosure in financial statements. Therefore, the internalcontrol information disclosure has become a hot topic of theory and practice, gradually from thevoluntary disclosure the information of internal control to mandatory disclosure. According to thispolicy change,this article takes the Xinhua pharmaceutical whose internal control audit opinion isnegative opinion in2011and the great northern wilderness whose internal control audit opinion isnegative opinion in2012as the study objects.This study provides a certain reference value about acase study of the relationship between internal control defects and audit opinion and also has certainresearch significance.This article bases on the Shanghai and Shenzhen stock markets in2011and2012for alldisclosure of internal control of listed companies on the basis of the audit report.The study finds atotal of five companies of internal control audit opinion for the negative opinion. Xinhuapharmaceutical and the great northern wilderness for this research object are selected becauseXinhua pharmaceutical for2011is the first company to be listed on the internal control auditopinion for the negative opinion issued by CPA, while the great northern wilderness for2012for the first time after the implementation of mandatory disclosure of internal control audit opinion,whoseaudit opinion on the financial statements and internal control audit opinion are listed on thenon-standard by CPA. This has some significance and value. Based on this, This article uses twocases contrast study approach, through the collection and collation of this information on the twocompanies to explore the relation of internal control defects and audit opinion of listed companies.Research has found that when there were significant defects in internal control, and will inevitablylead to internal control auditing opinions for non-standard, but it is not always lead to financialststement for non-standard auditing opinions; But when financial ststement is non-standard auditopinion,which often lead to the internal control for non-standard.This internal control defects oftenexist in five elements of the internal control. Accordingly this suggests that internal control shouldbe "fine" construction, enterprise should go deep into the level of the five elements of internalcontrol component, design, evaluation and optimization.The accounting firm should improve thejudgment of internal control defects, and then issue a real and legal audit opinion.