The Development And Enlightenments Of Auditing Of Internal Control Over Financial Reporting

The paper introduces auditing of internal control over financial reporting and its enlightenments. With the formation and development of internal auditing and the requirement of internal control, auditing of internal control appeared. In 1992, Internal Control-Integrated Framework defined"internal control"explicitly. Because of frauds, such as Enron and WorldCom, Capitol Hill issued"Sarbanes-Oxley Act of 2002"(SOX), and proposed"auditing of internal control over financial reporting"for the first time, and then PCAOB issued auditing standard No.2 and Proposed Auditing Standard, on the basis of SOX and its SEC.404, which regularized auditing of internal control over financial reporting. Meanwhile, the study of internal control over financial reporting also conforms to our country at present condition. So it is of great moment to use auditing standard issued by PCAOB for reference.The paper is organized as follows: the first part reviews the development of auditing of internal control in USA, including auditing of internal control over financial reporting; the second part summarizes the development of auditing of internal control in China; the third and four parts are some concepts and something about auditing of internal control over financial reporting based on my knowledge and study, integrated with conditions in China; and the last is five enlightenments about auditing of internal control over financial reporting.Innovations of this paper are as follows: firstly, I conclude and summarize events and acts which had effected on auditing of internal control, and regard SOX as the shed of development of auditing of internal control, which the reason is that"auditing of internal control over financial reporting"is defined for the first time. Secondly, I relate auditing standards issued by PCAOB with present statement in our country and then propose my own ideas and suggestions and enlightenments.Disadvantages of this paper are as follows: because immaturity of internal control and its auditing in our country and not coming on auditing standards about internal control over financial reporting, and I am lack of practical experience. So I just propose some opinions theoretically based on auditing standards issued by PCAOB, and this paper may be short of practical applications and operations.