Research Of Financial Statement Audit Integrate With Internal Control Audit

At the beginning of the 21st century, a series of financial frauds represented by Enron, WorldCom caused strong storms in the United States. These cases resulted in terrible losses to investors which affected their investment confidence seriously. They also exposed many drawbacks of enterprises’internal control both in theory and practice, including imperfect system, useless board of directors, and so on. Therefore, the US Congress passed the "Sarbanes-Oxley Act" in 2002, which required that listed companies should engage accounting firms to certify the effectiveness of internal control and issue an audit report. Then, internal control audit became an assurance service. In practice, it is found there are many similarities between internal control audit and audit of financial statements. Accordingly, integrated audit concept which will combine two audits together by an accounting firm comes out. Compared to the single audit approach, integrated audit has obvious advantages on improving audit efficiency and reducing audit costs. However, so far there are no integrated audit standards and regulations currently. Therefore, it is necessary to establish integrated audit processes and provide guidance for audit practice. Based on the research achievements at home and abroad, this thesis, firstly analyzes basic theories of integrated audit. Secondly it constructs integrated audit processes and applies them to the integrated audit of X Securities Company. Then, it comes to implications and recommendations by the application and analysis of the key processes. It hopes this research can enrich integrate auditing theory and can play a guiding role in the integrated audit practice.This thesis is divided into six chapters:Chapter 1 is an introduction. Firstly, it describes a brief introduction of the research background and significance, content and method. Secondly, it presents research contents and framework. Finally, it points out contributions and limitations of the study.Chapter 2 is a literature review. It summarizes and analyzes the literature from integrated audit system research, the relationship between internal control audit and audit of the financial statements, as well as integrated audit on application effect. It further elaborates theoretical significance of the thesis.Chapter 3 describes the basic theory of integration of the audit. It firstly defines the concepts of internal control audit, financial statements audit and integrated audit. Then it introduces three theories, including agency theory, transaction cost theory, and organization management theory, and their relationship with integrated audit.Chapter 4 is the construction of the integrated audit processes. Three key integrated points are put forward by analyzing two audits’ connection firstly. Then on the base of implementation thinking of integrated audit, it designs integrated audit processes. In addition, frauds consideration and assessment of internal control deficiencies are also taken into account.Chapter 5 presents case studies. In this chapter, key integrated audit processes are used in the integrated audit of X Securities Company. Then it draws some implications and put forward some recommendations for integrated audit.Chapter 6 is the conclusion.