Listed Companies Assets Impairment Of Internal Control Self-assessment

Ill order to meet the needs of China’s socialist market economic development, in2006new accounting standards was issued by the Ministry of Finance and came into effect on January1,2007. According to Accounting Standards for Enterprises’No.8on the behavior of asset impairment, there are many changes compared with the old criteria and the degree of change is deeper than the previous changes. However, the listed companies’motivation to manage earnings still exist, and they have many accounting options in the implementation of asset impairment criteria, so under the new asset impairment criteria, the accounting practices of listed companies are still at risk. Internal control helps reduce the extent of earnings management by concerning about corporate governance and business risk. In order to assure the development and implement of internal control, the relevant regulatory authorities have promulgated laws and regulations of the evaluation of internal control. Through the evaluation of internal control quality, the effective implementation of accounting standards can be ensured, the earnings equity and the quality of financial reports’information will be improved, so the interests of investors will be ensured. So under the new asset impairment criteria, the researches on the changes of enterprise asset impairment behavior and the extent of earnings management through asset impainnent and then explore the relationship between internal control self-evaluation and earnings quality have a profound practical significance.The article chooses manufacturing companies listed on the Shanghai Stock Exchange from2005to2010as research object. Firstly, by reading disclosure of annual reports about reasons for the provision or write-off of fixed assets impairment, we find that the disclosure of listed companies about the reasons for the provision or write-off of fixed assets impairment is increasingly blurred, and even non-disclosure after criteria changes; and then by building an empirical model we choose listed companies which did not disclose the reasons of provision or write-off impairment of fixed assets as research object for empirical analysis, and find that these companies’behavior has managed earnings by using asset impairment, and these company’s internal control’self-assessment reports did not significantly improve their earnings quality. From this, we can see because "significant impainnent losses" is not clearly defined in our country’s new asset impairment criteria, listed companies take advantage of it and reduce to disclosure the reasons of provision or write-off of fixed assets impairment, and auditors are unable to ascertain the correctness of companies impairment behavior, so company’s earnings management space is increased; In addition, our internal control evaluation report is still in the phase of voluntary disclosure by the end of2010and the contents and standards of internal control evaluation report lack uniform regulations, so the number of listed companies who disclose internal control evaluation report is small, even if they disclose, because their internal control evaluation systems are imperfect, the internal control evaluation reports do not significantly increase company’s earnings quality.According to the empirical conclusions, the article considers the extent of "significant impairment losses" in new asset impairment criteria should be clearly defined; and we strengthen the supervisory role of the internal control evaluation report not only by increasing the number of reports that disclose internal control evaluation, but also by strictly regulating the content and evaluation procedures. Finally, we can improve earnings quality and ensure the reliability of financial reporting.The article’s innovation lies in we detect problems from annual reports’disclosure about impairment provision or write-off of fixed assets impairment, rather than just observe the specific amount of the impairment; and through the earnings quality, we connect the evaluation of internal control reporting with the Accounting Standards. From the point of internal control, we promote the effective implementation of accounting standards.