The Audit Of Internal Control Over Financial Reporting

At the beginning of this century, many well-known companies blew out accountant scandals repeatedly, which caused heavy losses to the investors, and attacked the investor's confidence to the capital market seriously. The so many financial information distortion questions have aroused the social public's unprecedented interest, the theorists and the practitioners have carried on widespread discussion and research to find reason. The results indicated that many companies'financial information distortion relates to its imperfect internal control system, the results also demonstrated that the internal control plays an influential role in the guarantee of financial reporting's reliability. After the scandals of Enron, to recall the investors'confidence to the capital market, the United States Congress has promulgated the Sarbanes-Oxley Act in 2002, it requests the companies'managements to evaluate their internal control over financial reporting, and should employ external auditor to attest it. Our country's related departments have also made the unremitting efforts in the internal control policy-making and carrying, five ministries and commissions had issued "Enterprise'Internal control Standard" in June,2008, together with the directions which issued April, 2010, symbolizes our country has established fully-formed internal control system, it also means that the auditing system of listed companies in China will enter a new era, companies accept the audit of internal control over financial reporting has been imperative.The audit of internal control over financial reporting as a new professional work, its development requires going through a process of continuous improvement. "Guidelines for the Audit of Internal Control "released in April 2010 by China has important significance for auditors, but they also encountered many problems. Based on this guidelines and American's advanced experience, this paper do a research on the audit of internal control over financial reporting, in order to put forward more specific guidelines for auditors.This dissertation illustrates the background which the audit of internal control over financial reporting was proposed and its significance firstly, and compared differences of the requirements for this institutional arrangement among several nations, and then discusses the reasons for the different requirements and its resulting outcome. Secondly, this dissertation analyzes several theoretical issues about the integration between the audit of internal control over financial reporting and the audit of financial statements, the analysis supports the integration of the these two audits. Thirdly, based on the conclusions and recommendations of the above analysis, this dissertation analyzes the implementation of the integrated audits from three aspects, and then puts forward the process of the risk-oriented integrated audits and design specific content of the process. Then, this dissertation makes a research on the evaluation of the control deficiencies, clarifies factors which should to be considered and evaluation methods, and proposes procedures for the evaluation. Finally, this dissertation discuss some related matters to the integrated auditing in the last part.