Economic Consequences Of Non-standard Internal Control Audit Opinions

After the implementation of the Sarbanes-Oxley Act,China began to pay attention to internal control,and the internal control system of listed companies in China is becoming more and more standardized.Since 2012,China's Main Board listed companies have been forced to disclose internal control audit reports.The implementation of this regulation by Shanghai and Shenzhen Main Board listed companies is in good condition.The internal control audit report has begun to enter the public's field of vision,and information users have begun to pay attention to internal control,audit opinions.Although the proportion of non-standard internal control audit opinions of listed companies in China is relatively small,investors can find the internal control defects of listed companies through non-standard internal control audit reports.By exploring the reasons for internal control defects,we can find that the company itself is in governance.Problems in structure,management system,etc.Information users use the internal control audit report to understand the company's operations in more detail,and then make their own judgments and decisions,and the decisions of investors and other information users will also affect the listed companies themselves.Therefore,this paper aims to discuss the nonstandard internal control audit opinions of listed companies and their economic consequences.This paper first summarizes the research background and significance,and refers to the relevant literature at home and abroad,expounds the existing contributions of the internal consequences of the internal control audit and internal control audit opinions of listed companies,and describes the research methods,innovations and limitations of this paper..Subsequently,with reference to relevant laws,regulations and theories,the concepts of internal control,internal control deficiencies,internal control audits and economic consequences are defined and related theories are described.Secondly,this paper expounds the development of internal control audit of listed companies in China.From the perspectives of disclosure ratio,report opinion type and audit fee,it analyzes the disclosure of the report and takes the 2017 nonstandard internal control audit report as a sample.The reasons for the company's non-standard internal control audit report are analyzed.Furthermore,through the internal control audit report issued by Dahua Certified Public Accountants for the negative opinions issued by Hareon Photovoltaic,the internal control defects and the causes of the occurrence of Hareon Solar are analyzed.The internal control defects mainly involve the accounting process and the approval process of major transactions.The problems of related party identification and related party transactions and information disclosure,the reasons for the internal control defects include the company's shareholding dispersal,the management maliciously encroached on the company's interests;the internal control system was not formulated in time,the implementation was not in place;the company's internal supervision failed,external Poor supervision.Finally,this paper discusses the economic consequences of the negative audit opinion of Hareon Solar's internal control.It is found that after the internal control audit report of Hareon Solar disclosed the negative opinion,the company's market performance is worse,the credit financing cost and the equity financing cost increase.It can not obtain normal commercial credit,the company's daily production and operation of the funds and raw materials are difficult to obtain,ultimately affecting the efficiency of corporate governance,executives and employees a large number of resignation,and a large number of overdue debts and corresponding litigation cases,resulting in serious company growth Insufficient,has a very negative impact on the company's long-term sustainable development.The conclusion of this paper is that after the listed company has issued the nonstandard internal control audit opinion,if it fails to pay attention to the internal control defects and actively rectify,the company will face the unfavorable economic impact brought by the non-standard internal control audit opinion.In the short run,the company's market performance will deteriorate,the company's stock price declines,reducing investor confidence.In the long run,on the one hand,stakeholders such as creditors and suppliers will lose confidence in the company,increase the cost of debt financing,and have difficulty obtaining the funds and raw materials needed for daily production and operation,which makes it difficult for the company to maintain normal production and operation;On the other hand,there are a large number of internal control defects that have not been corrected in time,which will lead to the internal control system of the company being ineffective.The executives and employees lose confidence in the company and leave,the efficiency of corporate governance is reduced,and sufficient profits cannot be obtained to maintain the normal operation of the company.The company experienced a large decline in overdue debts and related litigation cases,and the company's growth declined.The contributions of this paper are as follows:(1)Starting from the internal control audit opinion,studying the internal control defects and causes of listed companies,and exploring their economic consequences,enriching the research content of internal control audit;(2)The current domestic PV industry There are few internal control audits of listed companies,which expands the industry scope of internal control audit research;(3)study the internal control audit opinions of typical cases and their economic consequences,which is more reference for similar listed companies.The shortcomings of this paper are:(1)Limited by professional knowledge and theoretical level,there may be no detailed theoretical support in the process of analyzing cases,and some opinions may not be rigorous enough.(2)The reference materials that can be found in this paper are limited,so it may not be comprehensive and in-depth in the analysis.