The Effective Factors Of Listed Company’s Internal Control Over Financial Reports

In recent years, a number of regulations related to internal control have been released in our country. Not only guide the listed companies to improve their internal control construction, but also require certified public accountants to audit the listed company’s internal control over financial reports and publish the audit opinion.This article has reviewed the development process of internal control over financial reports, and then expounds the definition of the effectiveness of internal control over financial reports. According to the definition, this article argues that the effectiveness of internal control over financial reports should consult the auditing reports of internal control over financial reports issued by certified public accountants. Considering the party who publish the reports of internal control over financial reports and the enterprise main body, this article thought that the nature of the ownership, firm size, industry characteristics, corporate governance structure and external audit quality are the important effective factors of internal control over financial reports. Because of the state-owned enterprises in the national policy on advantages and have the natural market position, so it has advantage in the construction of internal control over financial reports; The size of enterprise determines the resources to devote the construction of internal control over financial reports; Good corporate governance structure can ensure that the internal control system within the enterprise is able to perform effectively; Certified public accountants audit the internal control, able to correctly judge whether the enterprise’ internal control over financial reports is effectively.This article chooses the companies in 2014 which audit opinions of internal control over financial report was issued by the opinions of non-standard and the standard opinion carries on the ratio of 1 in 4. The result is the 350 observations. Because non-state-owned enterprises disclosure the audit report of internal control over financial report are later than state-owned enterprises, so group the observations when making general logistic regression. Finally the research conclusions are:on the whole, state-owned enterprises are more efficient than state-owned enterprises in internal control over financial reports, and higher equity balance degree and executive compensation can improve the enterprise’s effectiveness of the internal control over financial reports; after the grouping test, The effective factors of internal control over financial reports are completely different between state-owned enterprises and non-state-owned enterprises. So puts forward related suggestions to both measures have different emphases.