| After the events in Enron and Worldcom, the world widely had questions about financialstatements auditing level of listed companies to ensure that the degree of reliability of financialinformation. At the same time, as an important line of defense to take of taking precautionsagainst enterprise financial report errors and fraud, internal control has received more in-depthand extensive attention. The U.S. congress promulgated Sarbanes-Oxley (referred to as "SOXAct") in Act2002.For the first time, it put forward the requirements of auditing theeffectiveness of the "financial reporting internal control". Since2008, the Ministry of Financeand other Five ministries have issued "The enterprise internal control basic norms"(referred toas "basic standards") and "The enterprise internal control audit guidelines"(referred to as"guidelines") and a series of regulations. It established a system of internal control audit inChina. It has important theoretical and practical value to comprehensively improve the level ofcorporate governance and enhance risk awareness. Although the internal control audit andfinancial statement audit are two different types of forensic services, and each is unique. Viewfrom the audit process, both have a lot in common. In practical exploration, the U.S. PublicCompany Accounting Oversight Board (referred to as "PCAOB") released ICFR AuditingStandards No.5in2007, the new standard (referred to as "AS5") followed the motivation toreduce audit costs. It first proposed the concept of integrated audit creatively, emphasizing a"risk-based, top-down" approach and satisfying the two audit purposes with resource sharingand the audit process reengineering. According to China’s listed company internal controlauditing in2012, among the853listed companies in the scope of implementation,20companies lonely adopted internal control audit, the remaining833companies have adoptedinternal control audits and audit the financial statements in the form of mutualintegration[1].This shows that the integrated audit has been a mainstream way of internalcontrol auditing of the listed companies in China. However, as a creative achievements with afusion of international advanced experience and based on its national conditions, guidelinesadvocates integration of audit, it did not explicitly propose how to conduct an integrated audit,which is not good for certified public accountants to carry out the integration of audit smoothly.How to reduce the cost of risk savings and effective conduct internal control audit business?Does it need to adopt an integrated audit? How to optimize the integrated audit businessprocesses? All of these need to be studied.This article firstly introduced the background and concept of the integration of audit, anddemonstrated from the integration of audit demand theory, the cost-benefit balance principle and the analysis of the three risk control theory. It provided theoretical support for theimplementation of the integration of audit. Secondly, the paper built a financial statementsaudit and internal control auditing relation matrix and clearly defined the difference andconnection through the comparative analysis of the two audit services. It also systematicallyexpound the necessity and feasibility of an integrated audit conducted. It laid a solid foundationfor optimizing the integration of two audit businesses. Thirdly, this paper explained themeaning of the integration of audit, key points of optimization and implementation way, andget an optimization analysis on the integration of audit business process around key integrationpoints. At the same time, it built integrated audit business flow diagram and formed theintegration of audit operation path. Fourthly, the paper analysed the actual application of theintegrated audit for four listed companies which were issued internal control negative opinionson the basis of the previous theoretical research in2012, discussed the audit practice ofintegration briefly in2012, and proved the maneuverability of the integration of the audit.Finally, the paper put forward suggestion on carrying out the integration of audit smoothly inour country from the government regulation, the governance of listed companies, and Certifiedpublic accountants. |
