A Study On The Factors Affecting Financial Frand Of Listed Companies From The Perpective Of Internal Control Taking Najing Textiles Import And Export Co.,LTD As An Example

In recent years,financial reporting fraud incidents occur frequently in our country,and the accounting information distorts,bringing serious losses to the interests of the internal and external stakeholders,which affects the healthy development of the capital market in China.Effective internal control can reduce the risk of enterprise financial fraud.Although the modern enterprise system has gradually established in our country,the internal control system construction started late.The enterprise internal control defects appear constantly,and most of the corporate fraud come from the lack of such effective internal control,which calls for learning from foreign advanced experience in theory,in accordance with the characters of enterprise development in our country,to set up a corresponding internal control system.As a result,it is necessary to comb the enterprise internal control to analyse the aspects needing improving,as well as to put forward the corresponding optimized suggestions.The financial fraud for five consecutive years of Nanjing textiles import and export co.,LTD has caused wide attention of the society.As paying attention to its cause,the public is also thinking of its internal control operation.Using the methods of literature research and case study,this paper,first of all,elaborates the basic theory of internal control and financial fraud,thus laying theoretical foundation for studying the internal control problem of the Nanjing textiles import and export co.,LTD.Secondly,the paper analyzes the company's problems of its internal control,respectively from the five elements of control environment,risk assessment,control activities,information and communication,as well as internal supervision.In terms of the control environment,chairman owns too much power,balance mechanism is lacking,rights overlap responsibilities seriously,and board structure is unreasonable,etc.;in addition,risk assessment system is also lacking.On the part of control activities,system of authorization and approval is not complete,and comprehensive budget implementation has not reached the designated position.In the aspect of information and communication,perfect information disclosure system is in urgent need.As for internal supervision,audit committee performs practically no function,and the independence of internal audit authority needs to be improved.Finally,this paper puts forward,from five aspects,the optimized suggestions for the internal control,to prevent financial fraud.Optimized suggestions for company governance mechanism:by reducing the state-owned shares of voting,increase the small and medium-sized shareholders' voting rights,in the way of reforming voting system,to change the fact of state-owned shares holding dominance,so as to perfect the equity structure;Through the separation of chairman and general manager,increase the number of outside directors,and improve the constitution of age and gender of the board members,to optimize the structure of the board of directors;Put honesty and trustworthiness into the corporate culture;By restricting multiple roles of the independent directors,limiting hiring "convergent" directors,together with reforming the programs of independent director candidates and compensation,improve the system of independent directors;Through legal rules,obtain enough information for the board of supervisors,and by freeing the execution of power,protect the supervision right of the board of supervisors.As to the accounting control system,this paper has designed,from the aspects of purchasing,sales and receivables,securities,etc.,detailed process of authorization and approval,as well as the specific process of comprehensive budget.Optimized suggestions for the internal audit system:make clear,by legal rules,the expertise and independence,together with work requirements,of the audit committee;perfect the internal audit organization structure.For external audit,as conducting audit to internal control of enterprises,accounting firms are suggested to combine that with financial statements auditing;while enterprises are supposed to carry out self assessment of their internal control,in order to cooperate with the work of accounting firms.Introduction of ERP system will guarantee communication between enterprise information.This paper is intended to help Nanjing textiles import and export co.,LTD establish perfect internal control system,secure smooth running,enhance enterprise competitiveness,as well as optimize the structure of enterprise management.