Case Study On Adverse Opinions Of Internal Control Audit Report

The report of the Nineteenth National Congress of the Communist Party of China stated that innovation supports modern economic systems,and innovation in listed companies is inseparable from good internal control.As the Ministry of Finance and other five ministries and commissions issued a series of documents such as“Basic Standards for Enterprise Internal Control" and " Guidelines for Supporting Enterprise Internal Control",companies and investors gradually realized the importance of internal control.In order to deal with the financial fraud and fraud of listed companies,the regulatory authorities require enterprises to entrust accounting firms to issue internal control audit reports.Since Xinhua Pharmaceutical Co.,Ltd.was issued the first internal control adverse opinion report in 2011,the number of listed companies issued with internal control adverse opinions has shown an increasing trend each year,and listed companies have exposed more and more internal control deficiencies.Under this background,studying the adverse opinions of the internal control audit of China's listed companies and studying the material deficiency in its internal control can promote the development of the internal control system of China's listed companies.This article mainly uses the literature review method and case analysis method to analyze the internal control situation of Zhongzhu Healthcare Co.,Ltd.First,the literature review method is used to sort out the documents related to internal control audit as the theoretical basis for the research of the internal control situation of Zhongzhu Healthcare Co.,Ltd,The current domestic and foreign literatures mainly focus on the construction of internal control framework,the development process of internal control audit,the types of internal control audit opinions,the definition of internal control deficiencies,and the factors affecting internal control deficiencies.Theoretical basis of internal control;The case analysis method first analyzes the overall situation of the 52 listed companies that issued adverse opinions on internal control in 2018,and discusses the overall status,reasons,disclosure and self-assessment reports of the adverse opinions;The publicly disclosed information such as the internal control audit report,financial statement audit report and internal control self-assessment report of Zhongzhu Healthcare Co.,Ltd.starts from the five elements of internal control.Cause analysis of major internal control defectsThrough the analysis of the overall situation of the 52 listed companies that issued adverse opinions and the analysis of Zhongzhu Healthcare Co.,Ltd in specific cases,further research from the five elements of internal control led to the following reasons for the company's internal control defects:the controlling shareholder and related parties violated the rules Occupied funds,contracts for major investment projects have not been approved by the leaders,and external disclosure of information is not timely and incomplete.Based on the analyzed reasons,the following suggestions are proposed:improve the related party capital occupation management system,strengthen the related party transaction risk assessment,improve the business approval process,improve the quality and enthusiasm of the company's information disclosure and other specific internal control optimization measures.The internal control situation of Zhongzhu Healthcare Co.,LtdThrough the study of this case,it is helpful to understand the issue standard of internal control audit adverse opinions and the internal control defects of the enterprise,and provide a useful reference for strengthening the internal control system of the enterprise,improving the efficiency of enterprise management,and strengthening the management of enterprise funds.