Research On Certified Differences Of Major Defects In Internal Control

From 2012 to 2016,China's A-share listed companies were issued 69 negative opinions on internal control.This paper selects these A-share listed companies as research objects,and studies the company's cognizance standard of the major defects in internal control from the evaluation reports.Analyze the determination of internal control major defects by management and certified public accountants,and find out the inconsistency between the internal control evaluation report and the audit report for the identification of major defects.Combining with ST Huaze's case,a detailed analysis of the differences was made.The difference between this research and the existing research is that the existing studies on the consistency of the internal control defects are mainly concentrated in the CPA group,and a few documents analyze the differences in the major defects between the management and the CPA from the theoretical perspective.In this paper,a statistical method was applied to describe the major defect identification standard of A-share listed companies with negative opinions on internal control,and summed up the issues identified by management and certified public accountants as major internal control defects from 2012 to 2016.Find out the major defects identified differences.Finally,a concrete analysis of the difference in the determination of specific cases was carried out.After a detailed analysis of ST Huaze,it was found that the level of management's recognition of defects in internal control is lower than that of certified public accountants.The reasons for differences in the determination of major defects in internal control by management are as follows:Firstly,there are defects in the internal control system in China;Secondly,different personal characteristics;Thirdly,different levels of interest.This article has the following practical implications:In the process of internal control evaluation and audit,management and CPA should communicate on the criteria for the identification and identification of internal control defects to avoid unnecessary standard deviations.In order to suppress differences in the identification of major defects in internal control due to differences in personal characteristics,both management and certified public accountants need to communicate and discuss in their respective groups before making a determination of internal control defects.At the same time,as the identification of major defects in internal control may require subjective assessment based on the mastery of the situation,management and CPA also need to communicate fully.The supervisory level needs to improve the internal control and punishment mechanism of internal control information disclosure,strengthen economic penalties and administrative penalties to increase the default cost of listed companies,and systematically curb the management of listed companies from concealing major defects in internal control,or the defect is identified as an important,general defect.