The Research On Early-Warning Index System Of Management Override Of Internal Control

Management override of internal control is the biggest barrier to the effective operation ofinternal control, but also the most weakness of the current containment to management fraud. Inorder to effectively prevent management override of internal control, an important measure is toconstruct early-warning index system of management override of internal control. This paper takesChinese listing Corporation as the research object, uses theoretical analysis, statistical analysis,multiple regression analysis and case analysis, respectively gives a more comprehensive systemresearch on the meaning, characteristics, specific performances, formation mechanism, influencingfactors, early-warning index system of management override of internal control, and the applicationof early-warning index system of management override. And the conclusions are as follows:(1) Essentially management override of internal control is a means of management fraud, andis a new form of fraud.(2) The formation mechanism of management override of internal control is that managementoverride of internal control is the result of combined action of internal motivation and externalcondition of override.(3) According to formation mechanism of override, this paper analyzes the influencing factorsof override through internal motivation and external condition of management override of internalcontrol, builds early-warning index system of management override of internal control throughmultiple regression analysis, and compares the effect of the early-warning of three kinds of multipleregression analysis determining models. As a result, the accuracy rate of Logistic model andPROBIT model are the same, and their effects of the early-warning are both better than the LPMmodel. So, we choose Logistic model as the decision model of management override.(4) Through the case analysis in the typical listing Corporation, this article briefly describes theuses of early-warning index system of management override of internal control in corporategovernance and the evaluation of internal control. Specifically, the uses in corporate governancemainly include three aspects, to establish early-warning index calculation subject, to ensureearly-warning index calculation reliability, to build early-warning information system and to dealwith early-warning information. And the uses in the evaluation of internal control also mainlyinclude three aspects, to affirm the existence of management override of internal control, to assessthe possible influences from management override of internal control, to provide bases for makestrategies to contain management override of internal control.