The Research On Internal Control And Earnings Quality

The basic characteristic of accounting information is the decision usefulness, earnings quality is an important reflection of the quality of accounting information and the interpretation of decision-makers on earnings quality directly influences decision-making and consequences. In China, distortion of accounting information is serious and the quality of earnings information is an indisputable fact. How to continuously improve the quality of accounting information has been an important topic for the study of modern financial accounting. At present, many scholars agree that it is necessary to improve the quality of accounting information and to strengthen and improve the company's internal control to ensure the earnings quality. The effectiveness and integrity of internal control to a large extent determine the quality of accounting information and earnings quality.Based on the present study, this paper considering the remaining gaps has done some innovative and useful exploration around the construction of internal control evaluation system and the relation of control quality and earnings quality, expecting to provide a new way of thinking for studying these issues.First, after reviewing the relevant theory of internal control and earnings quality, this paper chooses the common theoretical foundation of internal control and earnings quality as the starting point and from the theoretical point analyzes the relationships of internal control and earnings quality, so it provides theoretical support for the empirical research on the relationship between them.Second, on the basis of the previous studies, this paper in the reference of COSO Report constructs the quality evaluation system of internal control based on five Factors referring the internal control basic standards and guidelines for internal control evaluation recently released by the Ministry of Finance. Besides, this paper employs AHP to determine the weight of each factor and calculates the internal control evaluation index (ICI). In the measurement of earnings quality, this paper selects continuity of surplus, the predictability of surplus, manageability accruals and the value relevance of earnings to measure the quality of corporate earnings.Subsequently, this paper studies the quality of internal control and the current situation of earnings quality of the Shanghai-listed company through descriptive analysis and analyzes the causes. At the same time, this study proves the relationship of earnings quality and internal control and inspects the three assumptions in the article. The empirical study shows that the internal control has a positive role in promoting the earnings quality.Finally, after summarizing the main conclusions, the article on how to improve the quality of internal control and surplus makes a number of specific policy recommendations, proposing to increase regulatory control of listed companies in the construction of the internal supervision and inspection, to disclose the report of internal control self-assessment and appraisal reports and ensure the unity of the content and format and recommending the Ministry to release as soon as possible the final of the internal control application guidelines. At the end, the article presents the shortcomings existing in the research process and points the direction of future research.