Research On Audit Of Internal Control System Of Listed Companies

With the Enron, WorldCom and other financial fraud frequent exposure, the effectiveness of internal control was almost in doubt. The issues on audit of internal control also caused concerns in community. In the United States the government and regulators conducted a comprehensive review and reflection on internal control and audit of internal control. Under the impetus of the regulatory forces United States has gradually build the audit of internal control system, which was constituted by the SOX Act, SEC rules and PCAOB auditing standards. In 2006 the publication of Shanghai Stock Exchange Guidelines on Internal Controls of Listed Companies and Shenzheng Stock Exchange Guidelines on Internal Controls of Listed Companies indicates China has established its own internal control system based on the mature experience"The Guidelines of Audit of Internal Control"was issued in April 2010, which indicates the formal establishment of the audit of internal control system in China. The audit compliance of internal control has turned from the unconventional or for business only, into a routine business as same as the traditional audit of financial statements, which was done once each year. The operations of audit of internal control system become the focus of concern in theory and in practice. The design and operation effects of the current system are worth exploring, which is great importance to implementation end enforcement of the system.Based on the use of literature research methods, interdisciplinary research methods, qualitative and quantitative methods and longitudinal comparison methods, this paper takes five years'consecutive annual report of 65 listed companies of the Southern coastal areas of China as the subjects, and studies the published reports of audit of internal control. It also reveals the poor operation situation of the audit of internal control system, explores the constraints and recommendations for improvements.This paper found, with the audit of internal control system rolled out, the audit situation of internal control of listed companies has improved. But the overall proportion of the audit disclosure of internal control of listed companies is low. The contents of the audit reports of internal control disclosed by listed companies are uniform. The auditing standards of the audit reports are confusion, and the audit subjects are inconsistent with the single audit opinion of the audit reports of internal control. The present situation of the audit reports is due to the low social approval, the low level of legal laws and inconsistent systems, the lag of auditing standards of internal controls and insufficient supervision. As a result, this paper puts forward some improvements for the proposed constraints in this respect, such as increasing social approval of internal control and audit of internal control from government departments, listed companies and CPA in pursuit of consensus in theory and in practice, improving the"The Guidelines of Audit of Internal Control"to establish a unified auditing standards, strengthening the governments'supervision to form the regulatory efforts and improve the regulatory of efficiency and effectiveness.