The Research On Enterprise Internal Control Over Financial Reporting In China

Internal control over financial reporting is put forward from a series of financial scandals atthe beginning of the21st century. Financial fraud incidents both at home and abroad, brought aheavy blow to investors and the capital market. Enterprise internal control over financialreporting as an important part of the internal control is important for enterprise survival anddevelopment. Therefore, to strengthen the research of the internal control over financialreporting is an inevitable trend. Especially in2002, the United States’“Sarbanes-Oxley act”(short for SOX) designs and maintains “effective” internal control over financial reportingbecomes the focus of financial accounting. In July2006, the ministry of finance in our countryestablished “internal control standards committee”, our country started to report and evaluateinternal control over financial reporting. Our country’s “enterprise internal control basic norms”and “enterprise internal control evaluation guidelines” two files pointed out internal control overfinancial reporting is the focus of our country enterprise financial and accounting work. On June28,2008, established by the ministry of finance in our country, the “enterprise internal controlbasic norms” again emphasis on the internal control related to financial reporting. Thus it can beseen that it’s the urgent request to study of internal control over financial reporting both at homeand abroad. Therefore, this paper first introduces the related concepts of internal control overfinancial reporting, finds that the main problems of enterprises internal control over financialreporting in our country, at the same time, considering the specific situation in our country andputs forward some measures and suggestions.Firstly introduction of the paper states the selected topic background and research purpose,research significance, the research status both at home and abroad, research contents, researchmethods and main innovation points. The second part states the related concepts of internalcontrol over financial reporting, and the relationship between the elements of internal controlover financial reporting and the financial reporting. The third part guides by risk and uses theorder of the “top-down” to construct the process of internal control over financial reporting andadopts the method of risk based evaluation to evaluate internal control over financial reporting.The fourth part taking Sky Worth group as an example, introduces the operation of internal control over financial reporting, first briefly introduces the Sky Worth group, and puts forwardthe main problems of internal control over financial reporting, and analyze the cause of existingproblems, from which we can get some enlightenments. The fifth part from the government,enterprise and society three aspects puts forward the measures and recommendations ofstrengthening internal control over financial reporting. Finally, we summarize the whole paperand the research limitations.