Correlation Analysis Of Internal Control Audit,Integrated Audit And The Audit Quality Of Financial Report

In recent years,the frequent occurrence of management fraud makes listed company's financial information quality seriously questioned by the public.The regulators began to realize that we must establish a sound internal control system to ensure the quality of financial information.The United States,Japan and other countries have established related policies and regulations on mandatory internal control audit.In order to strengthen in line with international standards,in 2010 China promulgated the "internal control audit guidelines" pointed out that listed companies should make self-evaluation for the design and working effectiveness of internal controls,and entrust the accounting firm of relevant qualifications to audit and to express internal control audit opinions.In addition,the guideline point out that listed company can be audited by the different accounting firm or the same accounting firm,firstly proposed "integrated audit",but did not make any mandatory provisions.Since then,China has entered the stage of mandatory internal control audit from the stage of voluntary internal control audit.In 2011,our country make these companies listed at home and abroad at the same time as the first implementation object of mandatory internal control audit.Then,in 2012,China issued the provisions of mandatory internal control audit,to accelerate the pace of China's listed company to implement internal control audit.Based on the above background,this paper selects 2011—2013 listed companies as the research sample,uses normative research and empirical methods to study the relationship between the internal control audit and financial reporting audit quality.This paper also study whether mandatory internal control audit,the integrated audit bring more high quality financial reporting.On the one hand,by the empirical test,this paper shows that the integrated audit can improve the quality of financial reporting audit,enrich the research on this aspect in china.At the same time,through comparing the effect of voluntary internal control audit and mandatory internal control audit,this paper empirically tests the effect of mandatory implementation of internal control audit,which makes up the deficiency of existing research.On the other hand,It can be clear that implementation effect of our country's related internal control policy at the present stage,to decide for enterprises whether to continue to cooperate with the national policy requirements of internal control audit or integrated audit,proposing for China to implement internal control audit.First of all,this paper reviews the relevant literature of internal control audit,comments the existing literature,and expounds the necessity of this study.Then,this paper summarizes integrated audit related concept and the related theory of internal control,and then derives internal control audit,audit and financial audit report quality correlation integration through the theoretical analysis,and then puts forward three assumptions in this paper.In the other conditions remain unchanged,the internal control audit is conducive to improve the quality of the financial statements audit.In the other conditions remain unchanged,compared to voluntary internal control audit,mandatory internal control audit greatly improve the quality of the financial statements audit.In other conditions remain unchanged,the integration of audit can improve the audit quality of the financial report.Secondly,the paper selects 2011—2013 companies listed on the main board as the research sample,using the modified Jones model by industry sub-annual calculation of discretionary accruals,select the level of earnings management of listed companies as an alternative to audit quality variable to regression model.This paper makes empirical analysis of internal audit,mandatory internal control audit,integrated audit and financial audit quality.According to the empirical the results obtained in this paper,we have three conclusions.Internal control audit can improve the audit quality of the financial report.Compared to the voluntary internal control audit,mandatory internal control audit can improve the quality of financial reporting audit.Integrated audit can improve the quality of financial reporting audit.Finally,based on the research conclusions,this paper puts forward four policy recommendations.Firstly,our country should develop internal control auditing standards to promote the mandatory audits of internal control.In the legal aspects of the mandatory provisions,that can effectively guide the auditor to perform the audit procedures to complete the audit work,so as to improve the audit quality and reduce the audit risk.Secondly,it is necessary to strengthen the internal control audit supervision and punishment.Regulators should crack down on fraud behavior of listed companies in order to play a warning role in other listed companies.This can maintain the regulations of internal control information disclosure for the market to create a good transparent information environment.Thirdly,our country should vigorously promote integrated audit.Formulate policies and guidelines can guide auditors to better conduct business.Finally,accounting firm should improve the professional ability and accomplishment of the auditor.Pay more attention to the training and re-education on the audit staff in the two aspects of professional knowledge and audit independence.