The Research On The Influence Of Internal Control Audit On Reporting Lag

Nowadays,no one can plead ignorance of such current situation that countless listed firms have been lost in overlooking the true value of internal control audit.Although they have already tasted the bitter of pressure from the well-known Sarbanes-Oxley Act,which was issued by powerful national commissions to tackle a series of financial scandals and public distrust crisis,an audit of internal control is still inclined to be ignored when it is performed in conjunction with an audit of financial statements.Because enterprise owners just accept its limiting assistance for financial statements audit,and refuse to be disturbed by that result.What is worse,the similar phenomenon can also be seen in our country.As the functions and precious value of internal control audit can not be realized,this paper resorts to an empirical research for defining the positive side that internal control and its audit may bring to financial reporting timeliness.The vital subject “reporting lag”,one variable which usually represents the timeliness of annual financial reporting as well as the traditional financial reporting audit to construct and reveal some vital connections with the internal control audit,is always admired by a lot of scholars and massive investigations on influence factors.Thus,considering a strikingly analysis of famous classic theories,four hypotheses are proposed in this paper to build models and perform regression analysis.Besides,based on China's A-share listed firms data during the period from 2011 to 2015,the empirical research acquires three conclusions which are as following:First of all,these firms whose internal controls are effective in their self evaluations,the behavior of announcing the internal control audit results could give rise to a more timely disclosure of financial reporting for these firms.In addition to that,when the results of internal control audit are standard,the lower delay over financial reporting than those with non-standard results means a positive effectiveness impacted on this state.Finally,the listed companies with internal control deficiencies among the selected samples,there is no significant correlation between the types of defects and the time lag of the annual reports.Meanwhile,this paper also achieves two inspirations.One is about close and mutual effects between the two audit patterns,if they are regarded as a whole system,the effectivetransmission with its brilliant effect can be achieved in the audit process and that will bring more positive impact on the market;the other is about listed firms themselves,it is required to pay more attention to daily routine on internal control task,and develop an ever-increasing faith in it to bring the valuable benefits of this audit form.Moreover,this paper also has the following limitations: firstly,it is seemingly too simple to choose only one angle(reporting lag)to study internal control audit in this research;secondly,rethinking the practice of the integrated audit still remains in the stage of conception,without real supports;thirdly,the verification of three hypotheses are built on effective and perfect market environment,but this paper fails to consider the deviations in real market situation;finally,the empirical process inevitably encounters some technical problems,such as the limited number of samples.