Research On The Optimization Strategy Of Internal Control Audit Of Listed Companies Based On ERM Framework

Internal control audits came into being in the context of a series of financial fraud cases that shocked the world,and the disclosure of internal control audit reports has been continuously known to the public as a carrier of its information transmission,and its information has in many ways conveyed to investors more non-financial information in addition to financial report information.2020 SEC pointed out in the "Circular on Internal Control Audit Special Inspection" that from the reality From the perspective of the reality,listed companies and accounting firms attach significantly less importance to internal control and its audit,and there is still a large gap between the level of standardized operation of internal control and the quality of internal control audit practice and the expectations of investors and the needs of regulators.The frequent outbreak of financial fraud of listed companies has exposed the "formalism" of internal control established by listed companies,while CPAs failed to detect internal control audits and were eventually administratively punished by the SFC,reflecting the many problems in the audit process.Therefore,for accounting firms and CPAs to fully and effectively perform the supervision function of an independent third party,it is necessary to optimize the internal control audit strategy in order to improve audit quality and reduce audit failures.Starting from the internal control audit opinions of listed companies in the past ten years,the operation status of integrated audit and financial penalties of the SEC,this paper analyzes the current status of internal control audit implementation,the effect of integrated audit strategy implementation and the current status of internal control audit strategy,respectively,and summarizes the problems of internal control audit strategy of listed companies in China at this stage.Then,the risk management framework(hereinafter referred to as ERM framework)issued by COSO committee in 2017 is introduced to analyze the internal mechanism and strategy optimization principles between it and internal control audit,and then the optimization strategies at the level of accounting firm and CPA are proposed for the planning stage,implementation stage and reporting stage of internal control audit respectively based on ERM framework.Finally,a typical case of Fushun Special Steel is selected to apply the proposed internal control audit optimisation strategy based on the ERM framework.Through a specific case study,the problems of the accounting firm and CPA in performing internal control audit on Fushun Special Steel are pointed out and targeted recommendations are made to ultimately improve audit quality.A fully and effectively functioning internal control system of a listed company and a proper internal control audit opinion issued by a certified public accountant are the common expectations of the regulatory market and investors nowadays.Improving the quality of internal control audits is one of the important tools to prevent financial fraud in listed companies,and the correct and reasonable application of internal control audit strategies is a prerequisite to ensure audit quality.This paper hopes that the internal control audit optimisation strategy based on the ERM framework can provide new ideas for accounting firms and CPAs to implement audits,and also help listed companies to improve their systems in the process of being monitored and evaluated for the adequacy and effectiveness of internal controls.