Research On Audit Quality Evaluation System Of Internal Control Of Listed Companies In China

In order to guide and encourage enterprises to establish a sound internal control, the Ministry of Finance and other five ministries jointly issued "The Basic Norms of Internal Control" and "Enterprise Internal Control Supporting Guidelines", where "Guidelines for Audit of Enterprise Internal Control" clearly stated that the enterprises which implement internal control system should entrust the auditors to express an opinion on the effectiveness of the internal control in their own units. Since January 1, 2011, both domestic and foreign listed companies began implementing Enterprise Internal Control Audit Guidelines. In 2012, the scope extended to the main board listed companies of the Shanghai Stock Exchange and the Shenzhen Stock Exchange. So far, our internal control audit business transition to the mandatory implementation phase.At present, although the institutional environment of internal control audit has been formed in our country, listed companies which carry out internal control audit are gradually increasing, whereas practice norms can not effectively assess audit quality of personnel, especially the quality of the internal control audit work. The "Guidelines for Audit of Enterprise Internal Control" has been fully promulgated three years since 2012, from the point of execution status, 2012-2014, the overwhelming majority of audited entities have got a standard and unqualified auditor’s report, whereas the proportion of non-standard audit opinions on average less than 4%. However, the internal control of listed companies is really as effective as the audit results show? How does the internal control audit quality of accounting firms? Which factors affect the audit quality of internal control? How is the extent of influence? How to improve the internal control audit quality? The article studies these problems and aims to build a set of audit quality evaluation system of internal control.This paper reviews the domestic and foreign literature on the audit quality of internal control, and introduces the relevant concepts and theoretical basis of internal control audit quality, we also analyze the influence factors of the internal control audit quality in theory,and select the evaluation index of internal control audit quality from three aspects: the main body of the audit, the audit object and the audit market environment. Besides, based on the relevant data of the Shanghai and Shenzhen two city A-share listed companies and their related accounting firms in 2012-2014, we use factor analysis method to determine the impact of factors on the internal control audit quality. Finally, according to the evaluation results of the internal control audit quality, we discuss the present situation of internal control audit quality, and in order to improve the audit quality of internal control of listing corporation, we put forward suggestions from views of accounting firms, listed companies and audit market around the existing problems.The results show that the audit quality of internal control is reflected by the four elements of accounting firm, audit market, listed company and audit opinion. In the accounting firm, the influence factors include the number of registered accountants, the size of the firm, the reputation of the firm, the industry expertise;In the audit market, the factors include the punished situation and the internal control audit tenure;In terms of the audit object, internal control audit fees of listed companies play a key role in this aspect; The internal control audit opinion type as a comprehensive variable reflects the internal control audit quality alone. According to the audit quality evaluation system of internal control, we conclud that the industry expertise, the number of certified public accountants, the size of the firm, the internal control audit tenure, the reputation of the firm, the internal control audit fee and the internal control audit opinion type are positively related to the audit quality of internal control,the punished situation has a negative correlation with the audit quality of internal control, in adition,the size of the firm and the internal control audit opinion type have a more significant impact on the internal control audit quality.