Research On Relationship Between Listed Companies’ Restatement Of Financial Reports And Internal Control

Financial report restatement attracted widespread attention, and aroused widespreadconcern in the management authorities. Restated financial statements represent the firstpublished report errors or omissions, the errors or omissions that exist in these reports havebeen published, and more importantly, managers of listed companies to manipulate earningsmay be carried out, which appeared restated financial statements. One of the objectives of theinternal control of financial reporting disclosure is authenticity, reliability, both of which wouldinevitably attention. Therefore, this thesis intends to study the correlation between the financialreporting restatement and internal control, and strengthen the impact of the elements of therelationship between abnormal restated financial statements through internal control, and thenexplore more effective internal control system and related methods to improve the financialquality of the report, reducing the occurrence of restatements of financial reports.First, the restatement of financial reporting and internal control are outlined. Restatementof the financial reports for the relevant elaboration and restatement of financial reportinganomalies were defined. Exception of the correlation between the financial reportingrestatement and internal control studies, there is a relationship between the theoretical analysisand internal controls to improve the quality of financial reporting favorable restatement forsuppressing abnormal financial reporting restatement occurrence. Meanwhile, there is arelationship between the time of abnormal restatement financial reports and internal control andalso the relationship can reflect the internal control deficiencies. Internal controls to improvethe content of specific controls in favor of suppressing abnormal restated financial statements.Second, this thesis propose a assume that the relationship between the internal control andthe abnormal restatement of the financial statements. Logistic regression and independentsamples T-test on these assumptions and analyzes was confirmed by a negative correlationbetween the presence of abnormal financial restatements and internal control, as well as,abnormal restatement of financial reporting and internal control negative correlation time while the three elements of internal control for financial reporting restatement produce abnormalinhibition. Internal control is also important to control the content of restated financialstatements for abnormal inhibition.Finally, this thesis presents recommendations for empirical results. Listed companies todeal with the internal control environment to optimize and improve the internal controlactivities, strengthen coordination of internal supervision and external supervision, therebyreducing the incidence of abnormal restated financial statements.