Internal Control Defects Related Problems Research Of Chinese Listed Company

Internal control is an old topic. But it is also a new one. Its contents enrich constantly with the changes of the time and the development of economy. From the last century, because of the enterprise at home and abroad ignored the importance of the internal control of enterprise management and development, there are many common events of serious economic consequences resulting from internal control defects. For example, the famous World-wide accounting fraud case and serious of financial scandals. Because this series of listed companies in business failure, fraud and restatement of financial reports, people had to focus attention on the improvement of the internal control system and the effectiveness of internal control defects in information disclosure. The listed company financial frauds or business failure are always related to the serious internal control problems of enterprise. Enterprise internal control exists some defects which influent the long-term and stable development of enterprise. After years of practice has proved that when the enterprise’s management appear problem, Enterprise must first looking for problems from the inside and taking actions to improve it. Nowadays, enterprise should take some effective actions to improve the internal control system due to lacking external market effective supervision.America in order to make sure that the detail of listed companies’internal control will under the supervision of the public, and it had achieved very good results, take the lead " Sarbanes-Oxley Act "(SOX act) in2002to realize the effective management of the listing Corporation. While in China, lots of regulations issued to set and improve current situation of the internal control, and there is a growing need if information disclosure for public, five ministries and commissions jointly published the "basic norms of internal control"(referred to as the "basic norms") in2008; issued "the enterprise internal control application guidelines","evaluation of internal control guidelines" and "internal control audit guidelines" in2010, which come into effect in January1,2011by domestic listed companies, and come into effect in January1,2012by the provisions company of the Shanghai listed on the main board and the Shenzhen stock board, these provisions promulgated the internal control system of enterprise management in China into a new stage of development construction.At present, the mainly research of internal control system of enterprise management in China is the information disclosure defects affecting factors and external market changes, and the defects of substantial enterprise internal control system and the correction of defects is still in the research stage. Therefore, the research point put on the internal control system of enterprises, to excavate the essence of defects of internal control in enterprises, attaches great importance to the effect of correction of defects of internal control, in order to attach the better construction of the enterprise system of internal control, implement and improve relevant departments of the system of regulation effect of enterprise internal control.In this paper the structure and contents is these. The first chapter is the Introduction, introduces the paper studies the background and significance, and the use of the main methods and ideas, and referred to the article the possibility of innovation and inadequacies. The second chapter is a literature review, mainly for domestic and foreign related theory summary of research on the collection and classification, defects of internal control and its related theory to the height of the summary and evaluation, provide a solid theoretical foundation for the research. The third chapter is on the relevant theories of internal control defects, from the related theory of internal control, the relevant theories of internal control deficiencies, and the defects of internal control framework expounds three parts carries on the theoretical basis. The fourth chapter is the present situation of our listed companies internal control deficiencies, through the analysis of the overall situation of internal control of listed company, analysis the distribution of the listed companies internal control defects and its characteristics, summarized the situation of internal control defects identified, for this article at the back of the case study. The fifth chapter is based on the on the case analysis of Shandong Xinhua pharmaceutical co. CTD. Chapter6is that to perfect the internal control of listed companies defect recognition framework. Combined with specific case analysis, and the whole situation of listed companies, puts forward some measures of perfecting our listed companies internal control defects identified.At present, internal control related research is simple relatively at home. It mainly focuses on internal control defects of the disclosure of the influencing factors and market reaction. For internal control material defects and its modified study is also in the infancy time. How to get rid of the internal control information on the surface analysis, how to research enterprise internal control defects deeply and other aspects is our future study direction. This paper aims to internal control defects related research. By using literature study and normative research method of combining the analysis of establishing and implementing the internal control principle and using the method of descriptive statistics in China were analyzed briefly the listed company’s internal control the distribution of defects. Combined with the first issue internal control negative opinion of the company recently. Shandong Xinhua pharmaceutical co. CTD., puts forward some opinions and Suggestions of enterprise internal control defects recognition and effective rectification further. Through the internal control defects and the disclosure of relevant information that the continuous improvement of the standard development we hope that we can provide investors with more efficient, more realistic internal control defects information, and it will also promote stable and healthy development of our economy.The innovation of this paper is that it combines the first to be issued by the internal control audit the negative opinions of the company Shandong Xinhua pharmaceutical co. CTD. as a case study analysis at present for existing domestic enterprises internal control defects related study is almost the theoretical standard. Theory with practice, it can study internal control defects of domestic listed company from one point to another side. It has much more guiding significance. When giving advices for internal control defects recognition framework, it proposes a regulator for identifying and disclosing internal control defects named internal audit association. The association is made up of each enterprise’s internal audit committee. According to participate in the organization of the internal audit committee in the enterprise of the industry can be divided into multiple branches. According to the characteristics of industry, it is to make specific specification about the relevant principles of internal control deficiencies. It can ensure identify and disclose internal control defects effectively and completely.The deficiencies of this article are those, the author’s academic level is limited. documents and materials I can contact and collect are limited. The study of this paper is also shallow. The study of internal control defects recognition is limited in home and abroad. So the writing thoughts can not be divergent. In the aspect of data collection, data and materials analysis of listed company’s internal control defects is not deep enough. The sample size is not enough either. What’s more, in this paper, some views that has not yet mature, it remains to be study and research to improve and perfect in the future.