Research On The Influence Of Internal Control Defects And Its Rectification On Audit Fees

The internal control system of Listed Companies in our country is gradually established and developed,and the requirement of internal control disclosure is continuously strengthened.Under the voluntary disclosure of internal control of listed companies,the gradual development of some listed companies require mandatory disclosure of internal control evaluation report.Auditing plays an important role in the supervision system,and the audit fee is the bond between the firm and the audited entity,which has a direct impact on the economic interests of the two parties.The traditional research on influence factors of audit fees without considering the defects of internal control which is a key factor in this paper,the existing on the influencing factors of audit fees on the basis of the internal control deficiencies and the elements,theoretical analysis and empirical research together,to explore the relationship between internal control and audit fees,not only the study of internal control the defect and its effect on the rectification of audit fees,and the study of the relationship between the intertemporal angle of internal control defects rectification and audit fees.In this paper,the research object is the Shanghai and Shenzhen A shares in 2012-2015 listed company data as the research object,the research design and empirical test on the relationship between listed companies internal defects,the defects of internal control,audit fees of the three rectification.First,analyze the relationship between the defects of internal control and audit fees,then the defects of internal control on audit fees on rectification effect.Descriptive statistics,correlation analysis and regression analysis were used in the design of the model.Through theoretical and empirical analysis,the conclusion is drawn:The existence of internal control defects will lead to increased audit fees.The defects of internal control effect on audit fees is continuous in time,if the year T year internal exist control deficiencies,the year T+1 does not exist the defects of internal control,control of defects in the T year will make the T+l year increase in audit fees;if the year T exist internal control deficiencies,the year T+1 and the year T+2 does not exist internal control deficiencies,the T internal control weaknesses have no significant impact on the T+2 year audit fees.So the study shows that the internal control defects will have an impact on the follow-up annual audit fees,but the impact will gradually weaken.This paper from the identified internal control deficiencies of combination of disclosure of internal control deficiencies disclosure,audit opinion,illegal listed companies,considering the defects in the internal control of listed companies,analysis of defects in the internal control and internal rectification and the relationship between audit fees.Inspire listed companies to pay attention to the establishment and improvement of internal control system to prevent the occurrence of internal control defects.Internal control defects should be timely rectification,rectification of defects in the internal control of listed companies,reasonable arrangement of resources,in order to minimize the audit premium.