The Effectiveness Of Internal Control Of Financial Reporting Based On Financial Indicators

The Chinese government issued the "basic norms of internal control"in June 2008,and issued guidelines in 2010,the establishment of China's internal control evaluation of the effectiveness of internal control over financial reporting and auditing system.The relationship between the domestic and foreign research on the internal control of the financial report has focused on the internal control deficiencies and the effectiveness of the internal control deficiencies disclosure,the economic consequences are also discussed,but to quantify the effectiveness of internal control of financial report analysis.At the same time,the effectiveness of the existing internal control is often constrained by cost and time.This paper reviews the development process of internal control over financial reporting,from the assessment of the risk of material misstatement as a starting point,through the financial indicators and financial indicators of financial early warning,and assessment of the risk of material misstatement,select multiple dimension index and select the representative financial indicators,establish a reasonable and effective model.In view of the internal control of financial reporting in our country is still in the early stage of development,this paper selects the financial audit report opinion as the basis of effective financial internal control.If the financial report for the non-standard opinion means there is risk of material misstatement,while the risk of material misstatement of enterprises means that the company's internal control over financial reporting is likely to fail,and this standard is divided into two sample groups.This paper based on the 2013-2015 Chinese in Shanghai and Shenzhen listed companies as samples,according to the audit opinions,selection of opinion was issued standard company issued feibiaoyixian,1:4 ratio,and finally get a sample of 345.According to the literature research,the author selects the financial index as the independent variable of the model,and chooses the Logit model as the prediction model.First of all,the index data to test whether the normal distribution test,two sample groups of financial index difference variables are significant difference,so we can use the financial indicators of the volatility of the preliminary identification of financial reporting internal control is effective;and will comply with the conditions of considering the linear index after the screening index of conditional logistic regression;results at the end of this paper,using multivariate analysis,select the eligible index to establish the prediction model,because the conditional logic model lacks the application model,the simulation model of general logic conditional logic regression model and segmentation point determination.The conclusions are as follows:the financial report for non-standard opinion means there is risk of material misstatement,while the risk of material misstatement of enterprises means that the company's internal control over financial reporting is likely to fail,and this kind of company and other enterprises compared to the visible,there were significant differences between financial volatility and standard deviation value,therefore the use of such differences can effectively identify the effectiveness of internal control of financial report.The prediction model to predict the research sample has better goodness of fit,in 90%the guarantee degree,the value of P[0,0.5]in low risk area,the accuracy rate was 90.75%in the P value judgment;(0.5,0.7)in the moderate risk range;P value in the[0.7,1]range,the accuracy rate was 90%.In summary,the correlation between the effectiveness of internal control and financial reporting in this paper verify the volatility of financial indicators of the listed companies,for all stakeholders to provide effective and convenient method for the preliminary recognition of internal control over financial reporting,provide new methods and ideas in the evaluation method based on the existing financial reporting internal control.