The Correlation Between Internal Control Effectiveness And Audit Pricing

In2012, the ministry of finance united the CSRC issued the "The inform about2012main board listed companies classified partial implementation of the system of internal control. The disclosure of the internal control information was forced to publish. Along with the change of the policy. For one part, it impulsed the enterprises to improve the quality of the internal control, for the other part, it will impact the accounting firm to consider the level of the internal control as a important factor when they determined the audit pricing under the whole environment that the quality of the internal control get a substantial progress. From the theory, the audit pricing can be more rational when consider the internal control factor, but in the real world, the research result still have ingo diefenbach between the two things. Based on this background. This paper try to demonstrate if internal control can effect audit pricing, in order to rationalize the audit pricing and improve the level of enterprise’s internal control.In this paper, through using the normative research method and the empirical analysis method to research the correlation between internal control. This dissertation is divided into five parts:The first chapter is the introduction. The part give a outlook about the research background, research significance and the research objective and summarize the literatures which had done in home and aboard, besides, this chapter pointed the innovation and the disadvantages in this paper. The second chapter is related notion and basic theory. Describes the concept of the audit pricing and the model of the audit fee, describe the concept of the internal control and the evaluation method, describe the basic theory include Signal Transmission Theory, Insurance Theory, Cost Benefit Analysis, Audit Risk Theory. The third chapter is normative research. this part describe the condition of internal control and the influence mechanism that how internal control effect the audit pricing. The fourth chapter is the empirical analysis This part chose samples from the enterprise listed in Shanghai and who are state-owned companies. This paper contrast the quality of internal control in different years. And use some empirical method to demonstrate the hypothesis. The fifth chapter is based on the conclusion from chapter three and chapter four, formed a finally verdict:(1)The internal control and audit pricing exist non-significant correlation, but in2011,the correlation is negative and tin2012,the correlation is positive.(2)When include the factor of the corporate governance environment, the correlation of internal control and audit pricing become significant. Ultimately, this part give some efficient suggestions.The innovation and significance of the dissertation is following:considering the governance environment factor when research the correlation of internal control effectiveness and audit pricing. and in2012,the quality of the internal control in enterprises get a substantial progress, in this condition, maybe get a new conclusion between internal control and audit pricing.