Study On The Influence Of Internal Control Deficiencies On Audit Fees And Audit Opinions

With the deepening of the emphasis on internal control by China's listed companies and the gradual improvement of the internal control related systems,the status of internal control auditing is getting higher and higher.In 2012,the Ministry of Finance stipulated that China's central enterprises and state-owned enterprises should compulsory disclosure of internal control self-evaluation reports and mandatory disclosure of internal control audit reports.By 2014,all main board listed companies must disclose internal control self-assessment reports and audit reports.Nowadays,the number,the quality and standardization of internal control defect disclosure are significantly higher than in the past.The research on internal control deficiencies has a wider range of sample resources,which provides conditions for in-depth study of internal control deficiencies.This paper focuses on the impact of internal control deficiencies on audit fees and audit opinions.Based on the panel data of China's A-share listed companies from 2014 to 2017,this paper removes the influence of listed companies on the factors of active disclosure of internal control deficiencies,studies the relationship between internal control deficiencies and rectification and audit fees and audit opinions.According to the classification of general deficiencies,material deficiencies and important deficiencies,the relationship between different types of internal control deficiencies and audit fees and audit opinions is studied.This paper proposes basic assumptions based on relevant literature research,and uses empirical analysis to verify the establishment of the hypothesis.After descriptive statistics on sample data,understand the disclosure of internal control deficiencies and the rectification of deficiencies in 2014-2017,and initially compare the differences between the internal control deficiencies and internal control deficiencies in different categories on the audit fees and audit opinions.Correlation analysis of each variable,testing the possibility of multicollinearity between factors;selecting the model for regression,revealing the relationship between internal control deficiencies and rectification and audit fees and audit opinions.In order to ensure the reliability of the conclusion,the significant and robustness of the conclusion is tested.The study found that internal control deficiencies and rectifications are related to audit fees and audit opinions.The existence of internal control deficiencies will indeed lead to an increase in audit fees,increase the possibility of listed companies being issued non-standard audit opinions.In the current years,there was no immediate economic benefit,which not only did not reduce the audit fees,but increased the audit fees and increased the possibility of non-standard opinions;there were also differences between material deficiencies,important deficiencies and general deficiencies and audit fees and audit opinions.