Research On The Internal Control Self-assessment Of Listed Companies In China

Since entering into the twentieth century, the frequency of financial fraud cases have brought significant economic losses home and abroad.One of the important reasons is the missing or deficiency of internal control in listed companies.Practice has proved that an enterprise having a sound internal control system is not the same as the one having an effective internal control,thus the important role of the internal control assessment becomes prominent.The internal control assessment is a vital means of improving the internal control systems and ensuring its effective implementation. After that, the U.S.Congress promulgated the《Sarbanes Oxley Act of 2002》in July, 2002.One of the core provisions of the bill,which is SOX Section 404,required the authorities of public companies to do the internal control self-assessment(CSA) of their companies and disclose the report of CSA.The SOX Section 404 indicated the arrival of mandatory disclosure of the internal control information.At home,relevant departments and theoretical circles increasingly attach great importance to the failures of internal control. In order to strengthen the construction of enterprise internal control, the Shanghai Stock Exchange and Shenzhen Stock Exchange issued the《Guidelines on Internal Control of Listed Companies》in June and September,2006. In 2008,China's Ministry of Finance joining hands with China Securities Supervisory Commission,the Audit Commission,China Banking Regulatory Commission and China Insurance Regulatory Commission officially released the《Basic Norms of Internal Control》and its supporting guidelines. These specifications require listed companies to do the CSA and disclosure the report of CSA together with the annual report.This indicates internal control information turn from voluntary disclosure stage to mandatory disclosure stage.In fact,there are still many enterprises that have not paid enough attention to the internal control assessment. So, it is necessary to carry out the study of CSA and listed companies must recognize the importance of the implementation of CSA from a strategic height.This dissertation studies the situation of the disclosure of the internal control information and analyses the reasons for this situation, as well as making relevant recommendations according to the existing these deficiencies.The first chapter discusses the background and significance of this research, as well as briefly viewing the recent studies of CSA home and abroad ;The second chapter introduces the trends of the internal control theory and views the theory of CSA; The third chapter focuses on the analysis of the importance specifications which are related to CSA and also describes the characteristics and contributions of the《Basic Norms of Internal Control》;Chapter IV attempts to study the situation of the disclosure of the internal control information and analyses the reasons for this situation. The reasons are: insufficient motivation of voluntary disclosure, insufficient attention of the authorities , insufficient requirements of the information to the internal control, deficiencies of legal norms and the deficiencies of audit evaluation criteria; In chapter V ,author proposes some recommendations to listed companies for the CSA: building the indicators of internal control from the corporate level and operational level respectively; improve the content and format about the report of CSA and other relevant recommendations; Chapter VI describes the preliminary findings and deficiencies of this research.