Characteristics Study Of The Major Defects About Listed Fraud Company

Worldwide financial scandals exposed constantly,exposed the companies in the major defects existing in the construction of internal control,but also caused a great loss to investors and society.Guo Daoyang(2011)points out that out of control of the internal control is the root of accounting fraud.The highest form of out of control-the major defects of internal control,is common in fraud company.Therefore,it is a kind of inevitable trend from the perspective of internal control to govern fraud.what are the characteristics of the fraud companys' internal control defects,how to complete the internal control and reduce the occurrence of fraud? In order to clarify these questions,This paper from the Angle of the five elements of internal control,to study the characteristics of the fraud company.Because of management fraud companys' internal control has major defects(Chen wuchao,2012),This article obtains from the fraud company to study the characteristics of internal control defects.In this paper,we first review from the researches of classification,identification and determination,and influence factorss about the internal control defects,Secondly from incomplete contract theory,principal-agent theory,five elements of internal control three angles to analyze the relationship between fraud and internal control defects.on the basis of literature review,and theoretical analysis,the hypothesis are put forward.Then this paper chooses 208 management fraud companies from 2012 to 2013 and 208 non-fraud companies as the study sample.Combined with the existing literature and relevant documents and regulations,we use 23 indicators of the five aspects to do the empirical research,which is conducted in two steps.Firstly,the descriptive statistical test.By the frequency of fraud company internal control defects statistics implement and t test to do preliminary selection of indicators.Secondly,use Binary Logistic model to examine 15 study variables and find that fraud companies and non-fraud companies have significant difference in equity balance degree,senior executives litigation-related stability,risk warning and countermeasure,disclosure of internal control audit report,financial early warning,major restructuring,system integrity,business system,examining and approving system,information disclosure and investor relations management system,the independence of the audit committe.Lastly,According to the empirical analysis conclusion,this paper puts forward the corresponding countermeasures and Suggestions,and summarizes the research deficiencies.