A Study On The Impact Of Financial Report Internal Control Defects On Auditing Opinions On Financial Statements

With the continuous development of market economy, more and more enterprisesattach importance to the construction and implementation of internal control systems.A country its decline basically start from the inside, and before the final blow the roleof its decline are the real inside forces rather than external forces, which indicates howimportant internal controls are. The Internal control quality is good or bad seriouslyaffect the listed company’s business development, if a sound system of internal controlhas been improved and implemented effectively, it will also increase the dependenceextent of corporate financial information, and reduce the audit workload of externalaudit institutions, and make it easier for companies to be issued a standard unqualifiedaudit opinion.In this thesis, drawing on relevant research results at home and abroad,Combining risk conduction effecting and signaling theory and starting from thedifferent types of financial reporting internal control deficiencies, we study its impacton the financial statement audit opinion. This paper analyzes some of the basic theorystarted to make internal control deficiencies as three kinds, including the relevance ofthe financial reporting classification, classification according to the five elements ofinternal control and the extent of its impact on internal control classification.Further,this paper introduces the related concepts of the audit opinion, and analyzesthe relationship financial reporting internal control deficiencies with the financialstatement audit opinion. After using regression analysis empirically researches therelationship with internal control deficiencies and financial statements audit opinion.By2012the Shenzhen Stock Exchange and Shanghai Stock Exchange listed companyon the Main Board listed companies as samples, for studying I collect relevant data tosupport this paper data by RESSET database and by hand, designed to discoverwhether a correlation between the type of audit opinion and internal controldeficiencies. The results showed that: Severity of internal control deficiencies,internal environment deficiencies, risk evaluation deficiencies, control activitiesdeficiencies, information and communication deficiencies and audit opinions waspositively correlated.This study helps the public find some method of managing companies internalcontrols, and to improve the efficiency of companies internal control provides someempirical evidence, you can also make CPAs are well aware of the existence of the defect content through empirical evidence, so that in the targeted audit capability toimprove the efficiency of Certified Public Accountants and reduce audit risk.The research innovation lies in the selected independent variable: In the past,studying the relationship between internal control deficiencies and the audit opinion,most of the variables selected by the contents of the internal control deficienciesdifferent classification are an entry point, while this paper makes simultaneously theseverity of internal control deficiencies and its contents as an starting point, bychoosing indicators to measure the internal control deficiencies, and study its impacton the financial statement audit opinion. In addition, the ‘Enterprise Internal ControlGuidelines’ provisions, the Shanghai Stock Exchange and the Shenzhen StockExchange main board listed company shall go into effect on January1,2012, discloseinternal control self-assessment report and the audit report, enforcement regime makesthe research data more fully than before.