The Influence Of Auditor’s Efforts On The Disclosure Of Internal Control Deficiencies

In the construction process of internal control system in our country, the disclosure of internal control information has a very important role, and the internal control deficiencies have been widely concerned by the academic circles. By using data of listed companies on the stock market of Shanghai and Shenzhen during 2009 to 2014 as example, we empirically examine the inner connection between auditor’s efforts and the disclosure of internal control deficiencies.In this paper,we divid the stage of disclosure of internal control information in our country into two parts, the compulsory stage and the voluntary stage, to compare and analyze the contribution of auditors’ efforts to the disclosure of internal control deficiencies. At the same time,by comparing with the empirical data of state-owned and non state-owned listing corporation,to compare and analyze the effect of the auditor’s efforts on the disclosure of internal control deficiencies.There are five chapters in this paper. Chapter 1 is introduction,to briefly describes the background and significance of this study, combing the main content of this paper and the research methods used in this paper,and pointing out the innovation of this paper; C hapter 2 is a literature review, briefly summarizes the domestic and foreign research literatures about internal control deficiencies and auditor’s efforts, and further analyzes and discusses the problems that need to be solved in the future; Chapter 3 is theoretical basis, Mainly defines the related concept of Internal control deficiencies and auditor effort, and analyzed the principal-agent theory, information asymmetry theory and signal transmission theory; C hapter 4 is research design and empirical analysis, mainly includes the theoretical analysis and hypotheses, sample selection, variable definition, model construction, empirical test and empirical analysis; C hapter 5 is conclusion, mainly summarizes the research results of this paper and puts forward the corresponding policy recommendations, points out the shortcomings of this study and possible future research directions.The major conclusions of the dissertation are as follows:1.Theoretical analysis shows that the mandatory disclosure of internal control information requires the release of the policy oriented signal to the market, the auditor is the signal of the sensitive receptors. Even the illegal cost is not high, the auditor will also for the perception of risk, focus on the enterprise internal control deficiencies disclosure, thus becoming the media requires the introduction of indirect impact on enterprise internal control deficiencies disclosure behavior.2.Data test results show that:(1)With the exclusion of the auditor and the nature of enterprises, enterprises mandatory disclosure requirements of internal control defects before and after the introduction, there are not significant differences between the disclosure of internal control defects of enterprises. It shows that the violation cost is not high, the punishment of enterprises is relatively low, the government requirements issued and not directly leading enterprise behavior.( 2) Internal information disclosure and voluntary disclosure stage, the auditor’s efforts have significant differences. This shows that the auditor has a keen sense of risk. Under different lega l systems, auditors will pay different levels of audit effort based on audit risk perception.(3)Auditor’s efforts to supervise and urge enterprises to disclose internal control defects has a positive effect. In stage of mandatory disclosure of internal control information, auditors should be responsible for the internal audit report, higher risk perceptions encourage auditors to pay more to push companies to disclose financial information and internal control information.(4)The disclosure of internal control deficiencies compared to auditors’ efforts, the effect of corporate nature on internal control disclosure is more significant.