Study On The Internal Control Defects Of Listed Companies Based On COSO Internal Control Framework

The defect of internal control is an important reason for the financial fraud of listed companies.Although with the introduction of the Basic Code of Internal Control of Enterprises,the quality of internal control of listed companies is getting higher and higher.However,financial fraud cases have not decreased with the increasing internal control,or even more and more.More and more listed companies have become the main players in financial fraud cases because of the defects of internal control.This has greatly damaged the interests of investors and investment confidence.Therefore,this paper starts with the defects of internal control,selects Huaze Cobalt Nickel company case to study.The internal control defects of Huaze Cobalt Nickel are very representative in the companies that have problems with internal control in recent years,and the internal control framework of COSO,which is very valuable in the theory of internal control,has high practical significance to improve the quality of internal control of listed companies.This paper starts with the internal control defects disclosed by the internal control negative opinion,and studies what causes the internal control defects prevalent in listed companies and how to improve the company.Case study and document analysis are mainly used.In the literature review section,the domestic and foreign literature is summarized and summarized,from the "internal control identification and classification","internal control influencing factors","economic consequences" three categories of combing and commenting,the literature theory as a tool for the study of the article.By studying the representative of Huaze Cobalt Nickel internal control defects,analyzing the deep-seated problems in its internal control degree,drawing conclusions and making relevant recommendations,unlike some other research based on the COSO model,this paper does not use the five elements of COSO internal control for simple application analysis,but through data collation and comparative analysis.Accurately locate the control elements of the problems existing in listed companies for analysis,targeted analysis and recommendations.In the part of analysis,starting with the research on internal control defects of listed companies in recent years,sorting out the internal control defects prevalent in listed companies that have been issued internal control negative opinions in recent years,and then comparing them with the self-evaluation report and internal control external audit report of Huaze Cobalt Nickel,and basically demonstrating the representativeness of Huaze Cobalt Nickel cases;Secondly,the internal control defect problem of Huaze Cobalt Nickel is analyzed,and the problem of internal control defects manifested by Huaze Cobalt Nickel is studied because of which elements of the five elements of the COSO internal control framework have gone wrong,and then the effects of internal control defects are analyzed from the perspectives of the enterprise itself,creditors and equity investors.Finally,the internal control elements of Huaze Cobalt Nickel problems are analyzed,respectively,control environment,control activities,information and communication and supervision activities.It is mainly due to the unreasonable governance structure,the information disclosure is not true and not timely,the authorization control and approval link is not standardized,the independence is insufficient and so on.Finally,the article concludes that one of the most fundamental reasons for the frequent financial problems of listed companies is the problem of control environment,Huaze Cobalt Nickel’s poor internal environment gives the controlling shareholder "Wang family" breeding bad mind soil,and the failure of control activities and the inability of the internal audit department for the "Wang family" to provide the basis for financial fraud.In this regard,the article puts forward some suggestions from the aspects of equity structure,governance structure,internal control culture,control activities and internal audit institutions.