A Case Study On Internal Control Defects Disclosure For KM Company

As a result of the enron incident,the United States was the first country to require the disclosure of internal control defects,and other countries followed the United States.In recent years,some problems,such as the embezzlement of funds by cashiers and accountants?the quality of products entering the market is unqualified?the approval process of the company's business is irregular,have come into people's eyes again and again.This constantly reminds us that the quality of internal control defect disclosure needs to be improved.Internal control defects of an enterprise refer to a series of designing defects and operational errors in the existing internal control system of the enterprise,which cannot warn or correct existing errors and weaknesses,and cannot provide necessary conditions for the company to achieve its current goals.The disclosure of internal control defects is of great significance to the enterprise itself,its stakeholders and capital market.The disclosure of internal control defects is affected by many factors,such as the regulator in the market,audit institution and supervision of public.There are other influence factors,including internal governance,motivation and management characteristics of the management.The company selected in this paper is KM Company.After analysis,the author finds that there are three main problems with its internal control defects disclosure: first,the identification standard of internal control defects is not comprehensive and confusing;second,the disclosure of internal control defects is not comprehensive and clear.Third,the disclosure of internal control defects is questionable.The author finds the reasons and gives some suggestions,hoping that the interest of investors can be protected.