Research On The Impact Of Internal Control Defects On Financial Statements Fraud

Financial statement fraud has undoubtedly become an extremely sensitive and not negligible problem.It is a serious hidden danger that hinders the healthy development of the world economy.Fraud in financial statements not only harms the economic interests of market participants,but also causes market participants to have doubts about the authenticity of financial information,which may cause the company to suffer serious economic losses.Although,at present,all relevant departments in China have realized the seriousness of the problem of financial statement fraud,and have attached great importance to it,and adopted corresponding measures to prevent the occurrence of fraud in financial statements and to cope with fraudulent acts that have occurred,but the fraudulent financial statements It is still happening,and the consequences are still very serious.According to the research and analysis of these report fraud cases,the financial statement fraud may be caused by many factors,but the most important thing to pay attention to is that the internal control of the enterprise fails and does not play its due role.However,the research on the correlation between internal control and financial statement fraud still stays in theoretical research and analysis of cases.Therefore,in order to establish a reasonable and effective internal control system,give full play to the role of internal control,better prevent the occurrence of financial statement fraud and reduce the risks it poses,and protect the legitimate rights and economic interests of investors and other financial statement users.It is very necessary to empirically analyze the direct connection between internal control defects and financial statement fraud to strengthen the internal control management and ensure the authenticity of the financial statements of enterprises.This paper will study the impact of internal control deficiencies on financial statement fraud from the internal control defects of financial reporting and the internal control deficiencies of non-financial reporting.For the internal control deficiencies at the financial reporting level,it mainly considers the major defects of financial reporting and financial reporting.defect.First of all,based on the full study and in-depth study of internal control defects and financial statement fraud related theories and literature，based on the internal control defects disclosed by listed companies,this paper proposes three assumptions,including:financial reporting major defects and financial statement fraud Positive correlation;significant financial reporting defects are positively related to financial statement fraud;non-financial reporting internal control deficiencies are not related to financial statement fraud.Secondly,all the A-share listed companies of the Shanghai Stock Exchange from 2015 to 2017 were collected,and companies that did not meet the relevant conditions were removed,and the remaining samples were empirically analyzed.After empirical testing,the conclusions of the verification are presented.Finally,based on the conclusions drawn,combined with the problems existing in the implementation process of China’s internal control system and the problems that will be encountered,relevant suggestions are put forward.