| With the increasing complexity of the market economy, the financial fraud emergence frequently due to the internal control deficiencies. This gives China’s economic market and economic environment serious adverse consequences. In view of this, the Chinese government issued a series of laws and regulations to regulate the company’s internal control system. Moreover, the listed companies are required to reveal their own internal control self-assessment report and the internal control audit report, to be disclosed to the supervision of the public and the market. However, there are still many companys’ internal control system exist many defects, causing harm to the development of enterprises. Therefore, the study of the internal control deficiencies are necessary.This paper describes the domestic and foreign literature related to internal controls and found that China’s current internal control study were more on internal control deficiencies identified and the study of the economic consequences of internal control deficiencies is not deep enough. Then I reviewed the current situation of our conutries’ internal control environment, and propose the universality and dangers of internal control deficiencies. In this paper, after outlining the concepts of internal control,I combine the CR company which the 2013 internal control audit report is issued a negative opinion to carry out specific research. By analyzing the construction of CR’s internal control system to identify its shortcomings and to analyze the causes of its defects. Then, through solvency, operation and development capacity to specifically study the adverse economic consequences to the development of enterprises caused by internal control deficiencies. The conclusions show that the internal control deficiencies led directly to CR corporate’s stock price fell significantly and the company’s solvency, operation and development capacity reduced. This study will help other componies understand the factors affecting internal control deficiencies and the consequences.I think this paper is meaningful for other companies to improve the quality of internal control. |
