Research On The Impact Of Internal Control Audit On Earnings Quality From The Perspective Of Inefficient Investment

As a special commodity,earnings information has both quantitative and qualitative characteristics.Investors have been paying attention to the quality of earnings.However,the eight typical audit failure cases have aroused public concern about the quality of accounting information.In such context,the Ministry of Finance and other five ministries jointly issued the Basic Guidelines for Enterprise Internal Control and Implementation Guidelines for Enterprise Internal Control in 2008 and 2010 so as to standardize the information disclosure process,and to reduce commercial fraud risk.Will the earnings quality of enterprises be improved when the quality of accounting information is worrying and the external supervision restrictions are strengthened? In view of the inefficient investment in Chinese enterprises,this thesis will study the impact of internal control audit on earnings quality.Firstly,from the internal and external dimensions,this thesis refines the behavior-driven model of executives,and establishes a theoretical model based on the fraud triangle model.Secondly,having established the earnings quality measured by the revised Jones model,the inefficient investment level measured by Richardson model and other control variables,the model is constructed on the basis of hypothesis.Then,using the data of Shanghai and Shenzhen A-share listed companies from 2015 to 2017 as samples,the empirical analysis is carried out by SPSS software.Through descriptive statistics,it is found that internal control audit has a positive impact on earnings quality when investment is insufficient,while internal control audit has a negative impact on earnings quality when investment is excessive.Then the regulatory effect of inefficient investment on internal control audit and earnings quality is verified by analytic hierarchy process.Finally,suggestions are put forward from two aspects: at the level of internal governance,it is suggested to improve the supervisory mechanism and incentive mechanism;at the level of external governance,it is considered that the positive role of institutional investors should be given full play and a perfect managermarket should be established.Through these measures,we can improve the governance mechanism of listed companies,reduce the motivation,opportunities and excuses for executives to carry out earnings manipulation and fraud under inefficient investment environment.Moreover,improving the quality of earnings and the allocation efficiency of social capital.