The Study Of The Effect Of Internal Control Audit On Real Earnings Management Of The Listed Companies

Internal control audit is an essential tool which is used to improve internal control of a company, which has been a hot issue in academia.Nowadays,as related laws and regulations has been better,it only depends on the way of traditional accounting fraud and the way of controlling accrual profit to deal with earnings management, to a certain extent,which have been already limited.However, a number of executives of listed companies tend to make more hidden measures that the activities of real earnings management control profits, in order to satisfy with a specific earnings management. In 2012, China made a decision to classifiably and partially strengthen internal control audit system. Under this background, in the perspective of real earnings management, it is the effect of the execution of internal control audit that has a certain practical significance in our country.Firstly, the thesis summarizes the research results that is about domestic and foreign internal control audit and real earnings management and illustrates the research context and significance. Secondly, it counts and analyzes the development history of internal control auditing and present situation to our country’s listed company, and applies math module of Roychowdhury(2006) to analyze the existence of our country’s real earnings management and briefly analyzes the relationship of internal control auditing and real earnings management. Finally, on the basis of the Principle-agent theory、Signaling theory、Institutional change theory and Government regulation theory, this paper proposes three hypotheses and builds practical research models.According to 2008 listed companies from stock markets of Shanghai and Shenzhen in 2012 and in 2013, choosing 4016 samples as the research object, it researches that the internal control auditing has an impact on the real earnings management of listed companies. The empirical research result illustrates as follows.(1) Whether the degree under the 10% level of the listed company internal control auditing and real earnings management were significantly negative correlation relationship;(2) For the first time, listed companies enforce the internal control auditing degree of real earnings management,which is significantly lower than the previous year;(3) Compared with the voluntary internal control auditing of listed companies, the real earnings management of the listed companies that is forced is the low level.The research result of this paper has the following meaning :(1) From the new perspective of real earnings management, the utility of the internal control auditing system are studied, which enriches the research achievements of internal control audit and real earnings management.(2)It provides experience for further carrying out “About 2012 main board listed companies classified partial implementation of the notice of the system of internal control”, which was published in 2012,and is in favor of perfecting internal control auditing execution system of our country listed companies(3) Implementing internal control auditing of listed companies can be seen as an effective market signals, and when making investment decisions and the implementation of internal control audit, investors can refer to it; therefore,it is useful for further making rational judgment to the value of the company.