Research On The Influence Of Internal Control Defects And Its Modification To Audit Fees

In order to improve the internal control of listed companies in our country, In2008the ministry of finance and other four ministries and commissions released《The enterprise internal control basic norms》，which required the listed companyiesshould take assessment of the effectiveness of the internal control and disclose theannual self assessment report. In2010the ministry of finance jointly with thesecurities regulatory commission, the national audit office, the China bankingregulatory commission, insurance regulatory commission and other departmentsissued 《Enterprise internal control supporting guidelines》,which pointed out that theinternal control audit is the introduction mandatory requirements in theimplementation of the enterprise internal control standard system. Audit service asa paid service, acceptance audit service side need to pay for the accounting firm,thatis the audit fees. The amount of the audit fees is affected by many factors. This papertakes the defects of internal control as the impact factors on audit fees and studys theinfiuence of the defects of internal control and its correction to audit fees.Based on the results of review and evaluation of the domestic andforeign internal control defects and correction influence on audit fees,this paperdiscuss the infiuence of the defects of internal control and its correction to auditfees,takeing advantage of Risk management framework theory, Risk premium theory,Signaling theory etc.The empirical part Selects2012and2013in A-shares of thelisting Corporation of Shanghai and Shenzhen Stock Exchange as the sample data,carrys on descriptive statistics for the data, and Conducts the correlation analysis andregression analysis respectively.According to the results of theanalysis,policy recommendations this paper putting forward are as follows:First,Governance, management, employees should work together;Second,thebusiness environment and process should take regular assessment;Third, thecompanies should focus on overall and operational level enterprise businessrisk;Fourth,the companies ought to assess their internal control regularly;Fifth,internal control deficiencies should be corrected timely;Sixth,thespecific internal control deficiencies and defects of internalenvironment are keyfocus.The innovation of this paper is that defects of internal control are divided intointernal environment, control activities and control means defects to study theirimpacts on audit fees.